By definition, you and the seller have determined the fair market value of the home you are purchasing...which is: the amount a ready, willing, and able buyer is willing to pay and that a seller is willing to accept.
However, the mortgage lender wants and needs to make sure that the amount they are lending is justified and protected. They assess this by having an appraisal done.
While appraisals aren’t always an issue, they can be.
Sometimes appraisers simply can’t find suitable “comparables” to evaluate the property.
Other times, an appraiser just doesn’t do a very good job.
Either way, if an appraisal “comes back low”, we’ll need to address it.
If we look at the appraisal and feel the appraiser made a valid point, we can go to the seller and request that they reduce the sales price to the amount that the appraisal says.
But many times, a low appraisal is just incorrect, and we may have to contest it. Contesting a low appraisal can be difficult, and the appraiser may not agree to adjust the opinion much, or at all.
If that happens, you can ask for another appraisal to be done. Or, you might see if the seller will agree to lower the price a bit, and you come up a bit.
Hopefully your appraisal will come back with no issues. But if it does, don’t worry; we’ll deal with it.
(Oh, and don’t be surprised if the appraisal comes back at almost exactly the amount you paid for it. The appraiser is just looking to justify the amount spent, not come up with an entirely objective assessment of value. So, even if you got the best deal in the world, the appraisal may just say the value is right around how much you are buying it for.)