Welcome Home received a question about appraisal-gap clauses — what are they, and how do they impact a buyer. Coldwell Banker Realtor Jacqueline Hoyt explains:

“An appraisal-gap clause formalizes an expense for the buyer. For example, it might read, “Buyer will put $5,000 toward the appraisal gap.” This means that the buyer intends to cover up to that amount if the house doesn’t appraise for the amount the lender is financing for the buyer. This can happen if you can’t afford to put a large down payment on the loan, or if you over-offer for the house—two reasons to have a knowledgeable Realtor who can guide you and set you up for success.”

Have a question for a local Realtor? Ask it here: welcomehome@theday.com

Jacqueline Hoyt

Coldwell Banker Realty

Mobile: (860) 235-2665

jacqueline.hoyt@cbrealty.com