What Happens When an Appraisal Comes In Low in Georgia? What the GAR Loan Exhibits Say and What Agents Can Do

Melissa Gilbert

Oct 9

8 min read

A low appraisal is one of those things that can feel like it came out of nowhere, even when the signs were there. The buyer is approved, inspections are behind you, everyone is thinking about closing, and then the lender sends over a value that is below the purchase price.

We've had a run of low appraisals in RHRE files lately. I don't have a count on that yet, so take it as an observation from our work, not a measured trend. But it has been enough that I wanted to put the process in one place: what the Georgia REALTORS® loan contingency exhibits actually say, what options the parties usually have, and the habit I think saves agents the most stress when a value comes in short.

The short answer

In a Georgia transaction using the GAR forms, a low appraisal does not automatically end the contract and it does not automatically lower the price. What it does is start a process with deadlines.

If the buyer's financing is attached to a GAR loan contingency exhibit and the appraisal comes in below the purchase price, the buyer generally has the right to ask the seller to reduce the price by sending an Amendment to Sales Price (GAR F713) along with the appraisal. The seller then has a short window to accept, reject or counter. If the parties don't reach agreement, the buyer has a short window after that to terminate. If the buyer lets that window pass and then decides not to buy at the contract price, the buyer's earnest money is at risk.

The details, and especially the deadlines, depend on which exhibit is attached.

Conventional loans: GAR F404, Conventional Loan Contingency Exhibit

Here’s the misunderstanding I see most often. A lot of agents think the appraisal deadline they negotiate in the offer is the deadline for resolving the whole appraisal issue. It isn’t. It’s the deadline for the first step.

Under the conventional exhibit, that negotiated date is how long the buyer has, counted from the Binding Agreement Date, to ask the seller to reduce the price. The buyer does that by sending an Amendment to Sales Price (F713) along with the appraisal. If the buyer doesn’t send it by that deadline, the buyer waives the right to ask. And the clock runs whether or not the appraisal has come back, so think about how long appraisals are actually taking when you fill in that blank.

Once the amendment is delivered, more deadlines kick in, and they build on one another. The seller has three days to accept, reject or counter. Then your buyer has turnaround times in the exhibit too, and they have to follow them to protect their earnest money. Miss one, and the buyer may be left choosing between closing at the contract price and putting their earnest money at risk.

I’m not going to walk through every step here, because the exhibit says it better than I can. When an appraisal comes in low, read the Appraisal Contingency section of the exhibit in your contract, write down each deadline as it’s triggered, and bring your broker in early.

FHA loans: GAR F407, FHA Loan Contingency Exhibit

FHA has a federal layer the conventional exhibit doesn’t. The FHA exhibit includes the FHA amendatory clause, which in plain terms says the buyer is not obligated to complete the purchase or lose earnest money if the property doesn’t appraise for at least the value stated in the exhibit, but can choose to go forward anyway.

The GAR exhibit also gives the seller a chance to respond with the same Amendment to Sales Price approach, with one big difference: the buyer’s first deadline isn’t a negotiated number of days from the Binding Agreement Date. It’s three days from the date of the FHA appraised value statement. After that, the same kind of back-to-back turnaround times follow, so the same advice applies. Read the exhibit, track each deadline as it’s triggered, and involve your broker.

VA loans: GAR F410, VA Loan Contingency Exhibit

VA loans carry their own federally required language, usually called the VA escape clause or amendatory clause. VA publishes the wording, and it says the buyer will not lose earnest money or be obligated to complete the purchase if the contract price exceeds the reasonable value VA establishes. Like the FHA clause, it also says the buyer can choose to go forward anyway.

VA files have one extra step worth knowing. Under VA's Tidewater process, when the appraiser expects the value to come in below the contract price, the appraiser is supposed to notify the lender before finalizing the value and allow a short window for additional sales data to be submitted. That window is short, so the agent who already has comps saved is the one who can actually use it. Ask the lender to let you know right away if a Tidewater notice comes in.

What the parties' options usually look like

Once a low value is in hand, these are the paths we typically see. Which one makes sense is a negotiation between the parties, guided by their agents and brokers, and sometimes their attorney.

The seller reduces the price to the appraised value through the Amendment to Sales Price.
The buyer covers the gap in cash, if the buyer has it and the lender's requirements allow it. The lender will base the loan on the lower of the price or the appraised value, so the buyer's out-of-pocket number goes up.
They meet somewhere in between, with a partial reduction and the buyer covering the rest.
A reconsideration of value is requested through the lender when there is real support for a different number. Since 2024, FHA, Fannie Mae and Freddie Mac have required lenders to have a process for borrowers to request one.
The buyer terminates within the window the exhibit allows.
The buyer proceeds at the contract price.

If the offer included any appraisal gap language in the special stipulations, that changes the conversation, and how that language is written matters a lot. That's a question for your broker or a real estate attorney.

The habit that helps the most: save your comps

This is the part I’d tell every agent, whether you’re listing or representing buyers.

When you list a property, save the comps you used to recommend the price in a folder for that listing in Google Drive (or wherever you keep listing files). Do it again every time you give the seller an update or recommend a price reduction. You’re building a record of how the market looked at each point, and why the price is what it is.

When you write an offer for a buyer, save the comps you used to decide on the offer price. Same idea. If the price was a stretch, you’ll want to know what you were looking at and why it made sense at the time.

Before the appraisal, put those comps to work. A lot of agents meet the appraiser at the property and hand them a short, curated list: the comps that best support the price and, maybe more importantly, the comps that shouldn’t apply and why. A low-value cash sale with no interior photos that you know had been damaged by renters is a good example. That’s not a fair comparison for a turnkey home, and the appraiser may not know the backstory unless someone tells them. I know one agent who takes the lockbox off before the appraisal so the appraiser has to meet them in person. Other agents email their comps package to the appraiser ahead of time.

This is allowed. Agents can give the appraiser comps and information about the property. What crosses the line is pressuring the appraiser to hit a number. And the appraiser doesn’t have to use your comps, but they can’t consider what they never see.

When the appraisal comes in low, pull those same comps out. Then ask three questions:

Did anything close since you saved them? A new closing that hurts the value might be exactly what the appraiser used. A new closing that helps might be what you need for a reconsideration of value.
Do the appraiser’s comps line up with yours? Look for different subdivisions or sections, a different condition, missed upgrades, a wrong bedroom or bathroom count, or square footage that doesn’t match what you have.
Is there any reason your comps don’t apply anymore? Be honest here. Maybe the best comp had seller concessions that inflated the price, was a full renovation, had a lot or location advantage your property doesn’t, or closed in a market that has since cooled. If your comps don’t hold up, a reconsideration request isn’t going to either, and it’s better to know that before you spend the parties’ time on it.

If the value still comes in low and you have solid support, the request to reconsider goes through the buyer’s lender, not straight to the appraiser.

Appraisal reports are changing

Fannie Mae and Freddie Mac's redesigned Uniform Residential Appraisal Report, built on the new Uniform Appraisal Dataset (UAD 3.6), is required for conventional appraisals submitted on or after November 2, 2026. In late September 2026, both agencies announced a temporary exception: lenders who can't meet that date can request permission to keep using the old format through May 19, 2027. So depending on the lender, agents may see the new report starting in November or not until spring 2027. The old forms agents are used to seeing, like the 1004, are on their way out either way. The new report is built to expand or contract based on the property, and square footage and property features are reported in more detail, including finished basement area reported separately.

How appraisers value a property isn't changing. It still comes down to comparable sales and market analysis. But the report will look different, and the way area is broken out may not line up neatly with what's in the MLS or tax records. That's one more reason to have your own comps and your own notes on how you arrived at the price.

FHA, VA and USDA have their own timelines, which hadn't been fully announced as of this writing. Ask your lender partners what they're seeing.

How a transaction coordinator fits in

A TC can’t negotiate the price, tell anyone whether to terminate, or police every turnaround time in a negotiation like this. Those deadlines depend on when each document is delivered and what the parties decide, so they belong to the agents and their brokers. What a TC can do is make sure the appraisal deadline is on the calendar from day one, get the appraisal to the right people when it comes in, and prepare the paperwork once the agents have decided what they want to do.

At RHRE, we track appraisal deadlines in every file we manage, along with due diligence, financing and closing dates. If you’re a productive Georgia agent and want an extra right hand on your contracts, schedule a call with RHRE.