When you accept an offer on your home, it can feel like the hard part is over. But there’s still an important step between contract and closing — the buyer’s appraisal. Understanding how this works can help you avoid surprises and feel more in control during the final stretch.

Once you’re under contract, the buyer’s lender orders an independent appraisal. The appraiser evaluates your home, compares it to recent comparable sales, and determines its market value. The lender uses that number to confirm how much they’re willing to finance.

From a seller’s perspective, what matters most is whether the appraisal comes in at, above, or below the contract price. If it comes in at value, everything moves forward as expected. Financing is approved and you stay on track for closing.

If it comes in higher than the contract price, that’s reassuring. It confirms that the market supports your agreed-upon price. However, the contract price does not increase — the buyer still pays what was agreed upon.

If it comes in lower than the contract price, that’s where negotiation comes into play. The lender will only finance based on the appraised value, not the contract price. That difference must be resolved. You may lower the price, the buyer may bring additional funds, you may meet in the middle, or the contract could terminate depending on the terms.

One important reality sellers should understand: if the buyer did not originally include appraisal gap coverage in their offer, it’s rare that they suddenly have extra cash available to cover a low appraisal. Most buyers are already allocating their funds toward down payment and closing costs. That’s why reviewing the strength of an offer — not just the price — is so important before accepting it.

There is also an added layer with FHA financing. An FHA appraisal stays with the property for six months. If it comes in low, that value follows the home for other FHA buyers during that timeframe, which can impact your options if the deal falls through.