What is an Appraisal Gap on a Home Purchase?
An appraisal gap is the difference that occurs when a buyer's offer is higher than the actual appraised value of the property (which is usually the amount the bank will loan for the home) that they are contracting to purchase. It is an issue that is currently being experienced in the hot and highly competitive Colorado real estate market and experienced by buyers where there are many more prospective purchasers than inventory that is available for sale, and where bidding wars and other aggressive purchase offer tactics are being used.