Appraisals falling short in commercial real estate is a challenge we see often — but it’s important to understand that a low appraisal doesn’t always mean it’s a bad appraisal. The key is working with a reputable appraiser who knows the market inside and out. It’s equally important for all parties involved to truly understand the market themselves. If you believe an appraisal is lower than expected, you need to be able to support your position with real data — recent comps, income potential, market trends — not just personal opinion. When there’s a gap, it’s an opportunity to have a data-driven conversation and, if needed, renegotiate terms.

This depends. If it is short of expectations without supporting evidence, it’s possible expectations need to be adjusted. However, if the value is short of expectations and market evidence/trends, an investigation should take place. The report should be reviewed for errors or omissions. An open (friendly) conversation should be had with the appraiser to discuss the discrepancy. If the client has access to current market information, it should be shared with the appraiser for their consideration. If the appraiser does not feel comfortable doing a revision, a second opinion from another appraiser is an option. If all else fails, a renegotiation of the purchase price or adjustment of the down payment may be needed.

To bridge the gap in commercial real estate evaluations, undertake a thorough market investigation to verify values reflect current trends. Facilitate open communication with stakeholders to resolve issues and align expectations. Use modern evaluation processes and technology to provide accurate and consistent appraisals. Implement frequent appraiser training to ensure high standards and current information. Create an effective feedback mechanism to discover and correct differences. To gain the trust and confidence of customers and stakeholders, ensure that evaluation results and reasons are clearly communicated.

When an appraisal falls short, there are a few ways to bridge the gap. You can challenge the appraisal with better comps, renegotiate the price, adjust financing, or explore creative solutions like seller credits. Sometimes, a second opinion or appraisal review can help. Every deal is different, so it’s important to weigh your options carefully. Always consult with a real estate professional to find the best approach for your situation.

If an appraisal falls short, it can be a challenge. It's important to understand the current market on a hyperlocal level. Be prepared to present data, comps, and trend reports to support the intended value. Communicate with the lender and determine if there are creative financing solutions that could come into play. Be willing to communicate with the appraiser to understand the shortcomings and see if there are any holes in their research/report that you can provide data for.