Overview
A low appraisal is one of the most challenging situations in the mortgage process. When the appraised value is less than the sales price, lenders base the loan-to-value (LTV) ratio on the lower appraised value, not the contract price. This means your borrower needs a larger down payment to maintain the same LTV percentage. Deal Details includes a built-in feature to handle this scenario, automatically recalculating the down payment and displaying both the sales price and appraised value so everyone understands how the numbers work.
Before You Start
Requirement | Details |
Active deal | You need an existing deal with a sales price already entered |
Appraised value | Have the actual appraised value from the appraisal report ready |
LTV percentage | Know the target LTV your borrower is working with (e.g., 90%) |
Step-by-Step: Enter a Low Appraisal Value
1. Open the Control Center
Navigate to your deal
Click Control Center
Select Edit Key Metrics
2. Enable the Appraised Value Setting
Setting | Purpose |
Use Appraised Value for LTV | Activates the low appraisal calculation mode |
⚠️ Important: Only enable this setting when you have a confirmed low appraisal. For standard deals where the appraisal meets or exceeds the sales price, leave this setting off.
3. Enter the Appraised Value
In the appraised value field, enter the exact amount from the appraisal report
The sales price remains unchanged (the seller's contract price stays the same)
4. Save and Apply Changes
Click Save
Select Add to Scenario
Wait for the system to recalculate
Understanding the Results
After saving, Deal Details recalculates and displays the adjusted figures:
Field | What It Shows |
Sales Price | Remains at the original contract price |
Appraised Value | Shows the lower appraised amount |
Down Payment | Recalculated based on appraised value to maintain target LTV |
LTV | Stays at your target percentage (calculated from appraised value) |
PMI | Remains consistent with the LTV tier |
How the Math Works
When the appraisal comes in low, your borrower must cover the gap between the appraised value and the sales price, plus their normal down payment percentage.
Example:
Sales Price: $725,000
Appraised Value: $710,000
Target LTV: 90%
Without adjustment: Down payment would be $72,500 (10% of $725,000)
With adjustment: Down payment becomes $86,000
10% of appraised value ($71,000) + Gap amount ($15,000) = $86,000
This ensures the loan amount stays at 90% of the appraised value, keeping the borrower within program guidelines.
Finishing Up
1. Review the Property Card
Confirm the sales price still displays correctly
Verify the appraised value label appears with the correct amount
2. Share with Your Client
The updated scenario clearly shows both values
Your client can see exactly why the down payment increased
Use this as a conversation tool to explain the appraisal gap
Quick Reference
Control Center → Edit Key Metrics → Enable "Use Appraised Value for LTV" → Enter Appraised Value → Save → Add to Scenario
Tips for Success
Have the conversation early—Use the adjusted scenario to show your client exactly how much additional cash they need to bring to closing before they hear it elsewhere.
Compare scenarios—Create a duplicate scenario without the appraisal adjustment so your client can see the before/after impact side by side.
Document the gap—The clear labeling of both sales price and appraised value helps all parties understand the situation at a glance.
Check PMI tiers—If the gap pushes your client into a different LTV bracket, make sure to discuss how this affects their monthly payment.
Explore alternatives—Use this as an opportunity to discuss options like renegotiating the sales price, requesting an appraisal reconsideration, or adjusting the loan program.