When an appraisal comes in below the agreed purchase price, the deal doesn't have to fall apart. Here are five strategies to bridge the appraisal gap and close the transaction.
Gap Strategies
- Negotiate price reduction to appraised value
- Split the difference with seller
- Appraisal gap guarantee clause (buyer covers difference in cash)
- Request reconsideration of value with comparable sales
- Switch lenders for a second appraisal
In today's market with more inventory, sellers are often willing to reduce price to the appraised value rather than relist. Buyers have more negotiating power than during the bidding war era.
