An appraisal gap occurs when the lender's appraised value comes in below the contract price. This happens frequently in competitive bidding situations where buyers bid above comparable sales. The lender will only finance based on the appraised value, so the buyer must cover the difference in cash or the deal renegotiates. Appraisal gaps are one of the most common reasons NYC deals collapse or get repriced post-contract.
From the seller playbook: Appraisal Gap Capacity Analysis
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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