Appraisal Gap
The difference between a home's agreed purchase price and its lower appraised value.
In plain English
An appraisal gap occurs when the appraisal comes back below what you agreed to pay. Since lenders only finance based on the appraised value, you'd need to make up the difference in cash, renegotiate, or cancel the contract.
In competitive markets, some buyers include an "appraisal gap guarantee" in their offer, committing to cover a gap up to a certain amount — understanding this risk before offering it matters.
Where you'll run into it
Guides and tools on TheBuyingPath that cover appraisal gap in context.
Related terms
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