A: If your home appraised for less than the purchase price and the contract does not include an appraisal contingency, then the Buyer must move forward with the sale unless their lender will not approve the loan. In that instance, the Buyer will need to put down more money so that the loan amount is not higher than the home’s appraised value.

Very likely, however, the contract has an appraisal contingency, which means the Buyer can cancel the contract and receive the earnest money deposit back if the home does not appraise for at least the contract purchase price. If this is your situation, there are basically four options:

1. Renegotiate the purchase price to an amount that is somewhere between the appraised value and the purchase price
2. Lower the purchase price to match the appraised price
3. The Buyer can cancel the contract (which usually happens if the parties can’t agree on a new purchase price)
4. Contest the appraisal

If you and the buyer cannot agree on a new purchase price, the buyer can choose to cancel the contract. If this happens and you want to look for another buyer right away, you’re likely going to get the same appraised value. Because of this, you will need to weigh the extra costs of carrying the property (property taxes, insurance, principal and interest, utilities, maintenance, risk of damage to the property, appliances/mechanical systems that may need repair, etc) against the money you would lose if you lowered the purchase price to the appraised value.