Appraisal gap coverage is a big tactic that we’re seeing in this market.
Today I want to discuss a hot topic. When negotiating with buyers in Denver, we’ve been seeing many offers with appraisal gap coverage.
What is appraisal gap coverage? When you’re writing an offer on a $500,000 house, and multiple offers have come in above $550,000, how will we compensate for that $50,000 difference? The buyers who are willing to go that high have to make a decision whether or not to bring the extra $50,000 to closing if the house doesn’t appraise for $550,000.
If the house only appraises for $500,000 and the first offer can only afford to bring $10,000 extra, that doesn’t sit well with a seller. If another offer says they will cover whatever the appraisal gap is, that’s usually the offer that gets accepted.
If you have any other questions about this or want to know other tactics and tips that we use to compete with those types of offers, give us a call. We’re happy to help.
