What Happens When a VA Appraisal Comes in Low in San Antonio?

The appraisal sets the ceiling

The VA appraisal produces a Notice of Value, and the reasonable value on that notice is the number the VA's guarantee is based on. The lender can finance up to that value, so when the appraisal comes in below the contract price, the gap between the two is not covered by the loan. That gap is the appraisal gap every low-value situation creates.

The VA appraisal protects the buyer as much as the lender. The program is built so veterans do not knowingly pay more than a property is worth, and the process that follows a low value is designed to keep the purchase honest rather than simply kill it.

Tidewater: the heads-up before the value is final

If the appraiser believes the value will come in below the sales price, VA rules require the appraiser to notify the lender first. The lender then gives the buyer a short window, typically about two business days, to submit additional comparable sales and any other evidence supporting the contract price before the appraisal is finalized.

The practical takeaway: a Tidewater notice is not the final answer. It is a last chance to make the case, and the quality of the comparable sales submitted in that window can change the outcome. The evidence needs to be pulled together the moment a Tidewater notice arrives, which is where an experienced agent earns the fee.

Reconsideration of value after the Notice of Value

Once the Notice of Value is issued, the veteran or either party to the contract can request a reconsideration of value in writing through the lender to the VA. The request needs substance: new comparable sales, documented errors in the original report, or evidence that was missing from the file. A request without new information rarely changes anything.

The VA typically reviews an ROV within about five business days, and up to about 20 if a new inspection is needed. Timing matters: requests generally need to be made promptly, commonly within about 14 calendar days of the Notice of Value, so a delay can close the door.

Negotiation, gap payment, and the escape clause

The most common resolution is a renegotiated price. The seller can reduce the contract price to the appraised value, the buyer can bring the gap in cash at closing, or the two sides can meet somewhere in between. All three keep the deal alive.

If neither side moves, the VA escape clause protects the buyer. This clause, required in every VA purchase contract, lets the buyer cancel and recover the earnest money deposit without penalty if the appraised value does not support the contract price. A low appraisal never forces a veteran into a bad deal.

How this plays out in the San Antonio market

In the August 2026 SABOR data, San Antonio homes averaged 82 days on market and sold for about 92.8 percent of their original list price on average. In a market where buyers are negotiating from a stronger position, appraised value and contract price are more likely to align, but low values still happen, especially when a contract price was set aggressively.

For VA buyers in San Antonio, including PCS households moving to JBSA Lackland, Fort Sam Houston, Randolph, and Camp Bullis, the process is the same everywhere: the Notice of Value sets the ceiling, Tidewater and the ROV are the two correction paths, and negotiation or the escape clause closes the loop. Tami works low appraisals with buyers by building the comparable sales case, coordinating the ROV with the lender, and negotiating from the appraised number rather than the contract price.

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