If the appraisal came in under your price, your buyer's lender just shrank the loan

When a lender's appraisal lands under the price written on your contract, the mortgage that lender approves is sized against its own view of the house rather than against the number you and your buyer agreed, so the loan shrinks and the difference has to come from somewhere. Whether that ends your sale comes down to one thing, which is whether the buyer's financing condition is still alive.

This is for Calgary and Alberta owners who had a deal last week and a phone call this week saying the buyer's lender came back short. Nothing about your house changed in those few days, which is the part that stings, and it is also the reason the way we work out a price never runs through a lender's appraiser.

The number that stopped your sale came from the lender's side of the table

An appraisal in a financed sale is not a referee called in to settle your price. It is ordered by the lender, and it is written for one purpose, which is to tell the lender what the house is worth as security if the loan goes bad. The Financial Consumer Agency of Canada puts the consequence in a single line on its page about getting preapproved for a mortgage, last modified 15 October 2025: "The approved mortgage amount will depend on the value of the property and the amount of your down payment."

The same page is blunt about what a preapproval is worth. A lender can still refuse a mortgage to somebody it has already preapproved, and among the alternatives the page lists are "approving you for a lower mortgage amount" and "requiring that you provide a larger down payment". It also says that before a lender approves the loan it checks the property against standards of its own, and that "These standards will vary from lender to lender."

We went looking for an official Canadian page that spells out the rule the industry recites to itself, that a lender advances against the lower of the price and the appraised value. We could not find one. Of the five official pages we were able to read, four from the Financial Consumer Agency of Canada and one from Canada Mortgage and Housing Corporation, not one uses the word appraisal anywhere, and the national underwriting guideline for federally regulated lenders would not open for us on the day we checked. So we are not going to put that rule in quotation marks. What is documented is narrower and still enough for you: the approved amount turns on the lender's view of the property, and the standards behind that view belong to the lender.

As for why a number lands low, RECA, Alberta's real estate regulator, calls an appraisal an assessment of what a property is worth on the market, and says in its consumer glossary that "A licensed real estate appraiser will review the age, condition, and features of the home." That glossary carries no date on the page. Condition is part of it, and if condition is what got marked down, selling a house that needs work is a different conversation from arguing about comparables.

Whether the deal is dead comes down to which date you are standing on

Before the condition comes off, the financing condition is the buyer's door out, and a short appraisal is precisely the kind of thing it was written for. Once that condition is removed or waived, the same short appraisal becomes the buyer's problem to solve. An Edmonton law firm, Berjak Law, writing on 14 September 2026 about a buyer who cannot close, puts the switch plainly: "Once the financing condition is removed, the seller will usually expect the buyer to complete the purchase." The same page lists what a lender may still require even after a preapproval, and on that list sits a "satisfactory appraisal".

So the first thing to establish is not how short the number is. It is which side of your own condition date you are standing on, and your contract, rather than any general rule, says when that date falls and what wording the condition carries.

If you are on the near side of that date and the buyer ends the contract, where the deposit goes depends on the same wording, and that is worth knowing in advance rather than in the middle of it. What the deposit does when a buyer walks after the inspection works through the mechanism on a different condition, and the deposit logic is the same one.

If you are on the far side of it, the risk has moved to closing day, where the money and the keys are tied to a single hour and being late has a price. What your contract fixes on closing day sets that out.

Here is the quiet part of all this. A low appraisal is common enough that an Edmonton firm lists it among the standard reasons Alberta deals collapse. LinQ Law's page on a real estate deal falling through, dated 17 May 2026, carries the bullet "The property appraises lower than the agreed purchase price", and then never comes back to it. Neither does anybody else we read. The sentence names the thing and moves on, which is roughly where the whole subject stops on the public internet.

AREA publishes sample wording for pinning down financing, and none for the appraisal

There is one Alberta document that treats a financing condition as something you can negotiate in detail, and it was not written for you. AREA, the Alberta Real Estate Association, publishes a guide of sample clauses covering the situations the pre-printed purchase contract leaves out. The current edition is dated May 2026, and it states on its own opening pages that "The Alberta Real Estate Association (AREA) has created this document to assist its members in drafting" the terms a deal needs. It also warns that "At no time are the provided clauses to be thought of as required wording."

Its financing section is headed "Financing Condition Terms", and a single sub-heading sits under it, "Details of Financing". AREA offers that wording for "a situation where more details of buyer financing are required", and the sample clause printed there replaces the standard financing condition with blanks for the parties to fill in: the mortgage amount, a ceiling on the interest rate, a minimum term, and a ceiling on the monthly payment of principal and interest.

Read that list again for what is missing. A seller can pin down how much the buyer intends to borrow. A seller cannot pin down what a stranger will later decide the house is worth.

AREA appears to know that perfectly well. The practice note under its own clause tells members not to supply those financing details themselves unless they hold a mortgage broker licence alongside their real estate licence, and to get the details from the buyer's mortgage broker or lender instead.

The index of that guide names roughly forty situations with ready wording, from back-up offers through to flood plain disclosure. Not one of them is an appraisal. In the portion of the document that came back to us verbatim, its first seventeen pages, the words appraisal and appraised do not appear at all. So the profession's own clause bank hands a seller a way to fix the loan amount in writing and hands nobody a way to fix the valuation. AREA is the industry's association rather than the regulator, so read what it publishes as professional practice guidance, and take anything that touches your own contract to your own lawyer.

What can still be done while the clock is running

The most direct move is to drop your price to the lender's number. It keeps the buyer you already have, it needs nobody's agreement except yours, and it costs you the whole of the gap. Sellers take it more often than they later admit, usually because the alternative is starting again.

Another is to ask the buyer to fund the shortfall in cash, which is the same thing as asking them for a larger down payment. Some buyers have it and plenty do not, because the money they had was the down payment, and this is where a sale dies quietly over a weekend. Splitting the difference is the version of that conversation which tends to actually close.

Then there is the number itself. A buyer can ask their lender to look again, usually with better comparable sales in hand, and a buyer can take the application to a different lender, which generally means a fresh appraisal by somebody else. That sentence from the Financial Consumer Agency, that lending standards vary from lender to lender, is the reason this sometimes works. Your condition deadline is the reason it often does not, because starting again with a new lender takes days you may not have left.

Which brings up the thing to put in writing, an extension of the condition date. That is a negotiation rather than a right, and if you grant one, grant it in writing with a new date on it, because a vague extension is how a condition period quietly becomes open-ended.

Relist, fix and relist, or sell to a buyer who is not borrowing

If this deal does not survive, you are back to the comparison every seller faces, with one new fact in your hands: a lender has now valued your house below the price you agreed.

Relisting as it stands costs you the days. What it also costs you is the record. A collapsed sale puts days back on the clock, and buyers read days on market as a story about the house. If your listing agreement is near its end as well, what to do after a Calgary listing expires covers the paperwork side of going back out.

Repairing first and then relisting is the move when it was condition that got marked down rather than comparables. Work can move a valuation, and it costs money up front and usually a couple of months, with no promise the spend comes back in the price.

Selling to a buyer who is not borrowing takes the lender out of the transaction, and with it the appraisal that just cost you a buyer. There is no lender valuation to come in short because there is no lender. How the process runs sets out the steps and nothing is signed until the last one, the fastest closing is seven to ten days with two to three weeks more usual, and what we pay shows the deductions rather than a headline figure. The price is below what a good listing would bring, which is the trade you are being offered.

That trade is the wrong one for you if the gap is small and your buyer can cover it, if nothing is forcing a date, or if your house would show well and you have the patience for another round of showings. It is also the wrong one if what you actually want is a second opinion on the appraised figure, because a buyer is not a neutral valuer and we are not going to pretend otherwise. See what we buy in Calgary if you would rather know the shape of it first.

If you want to talk it through, the useful things to have in front of you are the address, the date your conditions come off, what the lender came back with, and whether that condition has already been removed. Tell us about the house and we will say honestly whether a direct sale beats putting it back on the market, and anything here that touches your own contract is a question for your own lawyer.