08/23/2021
It’s the start of a brand new week!! Today we are talking about appraisal gaps 🥲
I think we all know it’s a sellers market, though the tide is changing towards a buyers market it’ll take a while to get there. To compete in this market buyers are using an appraisal gap to out bid other offers and right now the highest appraisal gap wins, even if the offer is lower!!? But it means more money in the sellers hand so it’s a no brainer when you look at it on paper!
Basically you are offering to pay the difference if the appraisal comes back lower than your offer price! Here is an example:
List price: $400,000
Your offer: $410,000 plus a $10,000 appraisal gap
Appraised value: $400,000
Your loan amount will be $400K and you will pay the sellers $10K at closing! It is important to keep in mind that appraisal gap coverage is not the same as closing costs or down payment, it is an additional cost. Though this might be scary I feel like it has only helped my buyers! It might be harder to get that money up front but it means your loan amount will be less and lower monthly payments!! It might seem like a downfall for buyers but there are way to use it to your advantage 🙂
If you or someone you know are in the market I would love to help! I am available to met with you and go over everything as well as go over your options, talk buying power and just chat!! I look forward to hearing from you! 🥰
