An appraisal gap clause commits the buyer to covering the difference between the appraised value and the contract price with additional cash - up to a specified maximum. If your contract includes a $50,000 gap clause and the appraisal comes in $40,000 low, the buyer must bridge the gap without renegotiating price. Require this clause in any competitive offer situation where overbidding is likely.
From the seller playbook: Managing Appraisal Risk Post-Contract
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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