What Does an Appraisal Gap Mean for Homebuyers?

Buying a home is a big milestone, but when the appraisal comes in lower than your offer, it can throw a wrench in your plans. That’s called an appraisal gap, and it could leave you scrambling to come up with extra cash.

In this guide, we’ll break down what appraisal gaps are, why they happen, and how you can deal with them without derailing your dream of homeownership.

• An appraisal gap occurs when a home's appraised value exceeds your offer.
• There are strategies to bridge the gap without losing the deal.
• Understanding appraisal gaps can save you money and stress.
• Preparation and expert advice make all the difference.

An appraisal gap happens when the home’s appraised value is less than what you offered to pay.

Example:

• You agree to buy a home for $300,000.
• The appraiser values it at $280,000.
• That creates a $20,000 gap.

Since lenders base your loan on the lower amount, you’d either need to cover the $20,000 difference yourself or renegotiate with the seller.

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• Competitive Markets: Buyers often offer above asking to beat multiple offers.
• Rapid Appreciation: Home prices sometimes rise faster than comparable sales ("comps") can catch up.
• Unique Properties: If your home is unlike anything nearby, finding "comps" is tricky.

• Loan Amount: The lender may lower the loan amount based on the appraised value.
• Down Payment: You might need to increase your down payment.
• Loan Type: Some loans have stricter requirements around appraisal issues.

Pro Tip: Work with lenders and agents who understand creative solutions to appraisal challenges.

• Negotiate: Ask the seller to lower the price to match the appraisal.
• Meet in the Middle: Split the gap with the seller.
• Bring Extra Cash: Cover the difference with personal funds.
• Challenge the Appraisal: Request a reconsideration if you believe it's flawed.
• Use Appraisal Gap Coverage: Some buyers add this clause upfront in hot markets.

Actionable Tip: Before submitting an offer, discuss likely appraisal outcomes with your lender.

reAlpha Mortgage pairs you with expert mortgage advisors who help you strategize offers, plan finances, and navigate appraisal gaps confidently Meanwhile, reAlpha empowers you with commission-free buying support, making the process more affordable and less stressful.

Buying a home is a big decision - and having the right information puts you ahead. But the real advantage comes from pairing smart research with a smarter way to buy.

When you use a reAlpha real estate company, you can be eligible to receive up to 1% of the home purchase price back as a credit at closing. Add reAlpha Mortgage, and that rebate can increase to up to 1.5% back, helping offset closing costs and keep more money in your pocket when it matters most.

The rebate is simple, transparent, and applied directly at closing - no complicated hoops, no delayed payouts. Just real savings tied to using a fully integrated homebuying experience.

See how much you could save:

• Check your eligibility

• Explore homes that fit your budget today.

• Your next move could come with thousands back at closing.

• Estimate your savings → Rebate Calculator

Ready to buy smarter and save big? Start your journey with reAlpha Mortgage.

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