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What is an Appraisal Gap?

Check out our video below explaining what an appraisal gap is!

An appraisal gap is used to strengthen your offer when buying a house. Because the market is a little crazy right now they are being used more frequently. An appraisal gap is when you, as the buyer, say I guarantee to pay “blank” amount over what the appraisal comes in at. For example we go to put an offer in on a $360,000 house and we know there are many other offers. We would discuss with you how competitive you want to be. We know we have to offer over asking price and the appraisal may not catch up with how far over asking we offer so we say we’ll pay $10,000 above the appraised value. So say we offered $380,000 with a $10,000 appraisal gap and the appraisal comes in at $370,00 you would then pay the $10,000 gap. This shows the seller that you aren’t just throwing in an offer super high hoping the appraisal comes in lower.

It sounds crazy to pay above the appraised value but in this market it makes sense. The value of homes is rising fast and sometimes the appraisal can’t keep up. When an appraiser appraises a home they use similar homes that have sold in the past. By the time that the appraiser actually does the appraisal the market has already risen how ever much more. The appraisal gap is making up for that time when the values were rising.

If you have any questions you can comment down below or call or text us at 801-821-9400. You can email us at We’ll also leave a contact form down below!

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