An appraisal gap clause is a contract provision that legally commits the buyer to pay the difference - up to a specified cap - between the appraised value and the contract price using their own cash. It protects the seller's agreed price when the lender's appraiser values the property below the negotiated number. Always verify that the buyer actually has the liquid reserves to honor this commitment.
From the seller playbook: Preparing for Appraisal Risk Before Listing
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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