What is appraisal gap coverage and why do you need to know about it during this hot market in the Portland area.
In a rapid-fire seller’s market, you need more than great finances and a quick-on-the-draw offer to land the home of your dreams. You need guts, grit, and every advantage to edge out the competition—even if your offer is thousands above asking.
Enter appraisal gap coverage.
Appraisal gap coverage affords a middle ground between including an appraisal contingency in your offer (drag!) and waiving it completely (agh!).
It sounds like an insurance policy, but it’s not. It’s strategic language in your purchase contract that states you’re willing to pay the difference between the appraised value and the contract price, up to a certain amount.
If a seller is studying two equal offers and one has appraisal gap coverage but the other offer doesn’t, they’ll most likely go with the one with the gap coverage. This ensures the seller that if the home appraises low, the deal will hold together as long as the gap coverage and the appraised value equal the offered price.
Have hopes of buying this year but feel a tad hesitant? Let’s have a conversation—I’d love the chance to guide you through the buying process and make sure your offer is the one on top!