Arizona buyer question
What happens if the appraisal comes in lower than the purchase price in Arizona?
A low appraisal starts a short clock on the standard Arizona contract. Here are your options and the deadline that matters.
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The short answer
Quick answer: If an appraisal required by your lender comes in below the price, the standard Arizona REALTORS® resale contract gives you five days after notice of the appraised value to cancel and get your earnest money back. Otherwise the appraisal contingency is waived. Before that deadline, get the appraisal copy, ask about a reconsideration of value, or renegotiate.
Source: Arizona REALTORS®, Residential Resale Purchase Contract (February 2026 sample); Consumer Financial Protection Bureau, My appraisal is less than the sale price. Last updated .
What the Arizona contract says
The Arizona REALTORS® Residential Resale Real Estate Purchase Contract makes the buyer's obligation to close contingent on an appraisal acceptable to the lender for at least the purchase price. If the home fails to appraise for the price in any appraisal the lender requires, the buyer has five days after notice of the appraised value to cancel and receive a return of the earnest money. If the buyer doesn't cancel in that window, the appraisal contingency is waived, unless federal law provides otherwise.
| Step | What happens |
|---|---|
| Appraisal ordered | The lender orders it during loan processing. The contract says who pays the initial fee, and that fee is non-refundable. |
| Notice of the appraised value | The five-day clock starts when you get notice of the value. |
| Within five days | Cancel in writing and recover earnest money, or reach a new agreement with the seller. |
| After five days with no cancellation | The appraisal contingency is waived. If you later can't close because of the appraisal, your earnest money can be at risk. |
Summary of the February 2026 sample contract. Counteroffers and addenda can change these terms; your signed contract controls. Talk with your agent, and with an attorney if needed, before a deadline passes.
Why a low value matters
The Consumer Financial Protection Bureau says it is very risky to buy a home for more than its appraised value, and calls the appraisal strong evidence that the price was above market value. A lender also bases its lending decision on the value it accepts. If you move ahead at the original price, the gap between the price and the appraised value has to be covered somehow, usually by a price change, a seller credit, or more of your own cash. Ask your lender exactly how a lower value would change your loan and cash to close.
Create your free account to see all homes for sale that fit the monthly payment you're comfortable with, each with its actual property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own estimated closing costs and APR disclosure.
Opens a third-party home search site. Payments shown there are estimates to help you search, not a loan offer or rate quote. Your actual payment depends on price, down payment, credit, taxes, insurance, HOA, and loan program.
What are my options?
- Get and read the appraisal. The CFPB says your lender must send you a copy, and that lenders aren't allowed to interfere with the appraiser's judgment. Check the property facts, such as square footage, bedrooms, pool and lot, and the comparable sales used.
- Ask about a reconsideration of value. Under interagency guidance final as of July 26, 2024, lenders can have processes that let a consumer submit information the appraisal may not have considered, such as comparable sales not previously identified, or point out deficiencies. Ask your lender how to request one, and how long it takes compared with your five-day window.
- Renegotiate with the seller. The CFPB says a lower appraisal can often be used to negotiate a price reduction. Your agent can ask the seller to lower the price, split the difference, or adjust credits.
- Cancel within the contingency window. If the numbers no longer work, the contract lets you cancel within five days after notice and recover earnest money.
- Proceed anyway. Some buyers cover the gap themselves. Make sure the new monthly payment and cash to close still fit your budget before the deadline passes.
What about waiving the appraisal contingency up front?
Some offers waive or limit contingencies to compete. Arizona's Buyer Advisory warns that waiving the loan, inspection or appraisal contingency can put a buyer at risk of losing earnest money or owing damages if they decide not to buy, and suggests weighing the risks with independent legal counsel first.
Keep the payment in view
A low appraisal can change your loan amount, cash to close, and sometimes mortgage insurance. Knowing the monthly payment you're comfortable with makes it easier to decide quickly.
A free account shows every home for sale that fits the monthly payment you're comfortable with, each with its real property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own closing cost estimate and APR disclosure.
Related: appraisal vs. home inspection · earnest money · mortgage insurance · closing timeline · more questions.
General information, not legal advice or a loan offer. Your purchase contract and your lender's requirements control.
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Create your free account to see all homes for sale that fit the monthly payment you're comfortable with, each with its actual property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own estimated closing costs and APR disclosure.
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Sources
- Arizona REALTORS®, Residential Resale Real Estate Purchase Contract (February 2026 sample) (Pre-Qualification Form, Loan Status Update, loan and appraisal contingencies; clause text checked October 15, 2026)
- Consumer Financial Protection Bureau, My appraisal is less than the sale price. What does that mean for me? (last reviewed Sep 11, 2024; retrieved October 15, 2026)
- Consumer Financial Protection Bureau, What are appraisals and why do I need to look at them? (last reviewed Sep 4, 2020; retrieved October 15, 2026)
- Federal Register, Interagency Guidance on Reconsiderations of Value of Residential Real Estate Valuations (89 FR 60549) (final as of July 26, 2024; retrieved October 15, 2026)
- Arizona Department of Real Estate and Arizona REALTORS®, Buyer Advisory (updated January 2025)
Frequently asked questions
What happens if the appraisal comes in lower than the purchase price in Arizona?
On the standard Arizona REALTORS® resale contract, you have five days after notice of the appraised value to cancel and get your earnest money back. If you don't cancel, the appraisal contingency is waived.
Can I challenge a low appraisal?
You can ask your lender about a reconsideration of value and give specific information, such as comparable sales the appraiser didn't use or factual errors. Federal agencies issued guidance on these processes in 2024.
Does the seller have to lower the price after a low appraisal?
No. The seller can agree to lower the price, meet partway, or decline. The CFPB says the appraisal is strong evidence for negotiating a reduction.
Who pays for the appraisal in Arizona?
The resale contract has boxes for buyer, seller or other to pay the initial appraisal fee, which is non-refundable. An updated appraisal the lender requires is at the buyer's expense.
Do I lose my earnest money if the appraisal is low?
Not if you cancel within the five-day window under the appraisal contingency. After that, the contingency is waived, and failing to close can put earnest money at risk.