In real estate transactions, the contract price is the agreed price between buyer and seller. Sometimes the appraisal price of the property might be higher than the contracted price. The buyer may find a better deal if the appraisal price is higher than the contract price. But what happens when the appraisal price is more than the contract? We’ll be discussing the implications of this scenario in this blog post.

What is an appraisal?

First, let us define what an appraisal actually is. An appraisal is a professional evaluation of the property’s worth. An appraiser is usually licensed to conduct this appraisal. They consider a variety factors including the location of the property and its condition.

In order to make sure that the property is valued at the loan amount, a lender will usually request an appraisal. This helps the lender avoid lending more money than what the property is actually worth.

What happens if an appraisal price is greater than the contract?

An appraisal price on a property that is higher than its contract price can have several consequences for the transaction.

For the Buyer

Higher appraisal prices can be good for buyers. This could mean they are getting a better deal on the property as they might be able to buy it for less than it is actually worth. An appraisal that is higher than the loan amount may help the buyer get financing.

For the seller

Sellers may find a double-edged sword in a higher appraisal. It may be that the seller is able to sell their property for more than originally expected. The property may have been appraised for more money than the contract price. This could give the buyer more leverage to negotiate a lower purchase price.

There are many options for both the seller and buyer

Buyer and seller have several options if the appraisal price exceeds the contract price.

Option 1: Negotiate the Purchase price

There are two options: one, the seller and buyer can renegotiate their purchase price using the higher appraisal price. This could mean that the seller reduces the purchase price to match or the buyer agrees to pay more in order to secure property.

Option 2: Stick with the original contract price

Option 2: Buyer and seller may agree to the original price, even if the appraise price is higher. This is an option for buyers who are happy with the original price and sellers who are not willing to negotiate.

Option 3: Walk Away From the Transaction

If they are unable or unwilling to reach an agreement, the sellers and buyers may decide to terminate the transaction. Although this can be a difficult decision to make, it might be the best choice if both sides are unable reach an acceptable agreement.


The appraisal price may be higher than the contract, which can have many consequences for the transaction. The buyer may find that they are getting a great deal on the property, and may be able to get financing easier if the appraisal price is higher than the contract price. Higher appraisal prices can be a double-edged deal for sellers. They may be able to sell their property faster than expected, but it may also allow the buyer more leverage in negotiating lower purchase prices. It all depends on the details of the transaction and whether both parties are willing to negotiate.