Finance category
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Appraisal Gap Offer Calculator
When the appraisal comes in below your offer, you make up the gap in cash. This calculator shows the gap, the lender's reduced loan, and total cash needed to close.
Appraisal gap
$20,000
offer − appraised
Coverage status
Short $8,000
Lender max loan
$372,000
at 20% LTV on appraised value
Total cash needed
$113,000
+$16,000 above base down
How an appraisal gap clause works
When the appraised value comes in below your offer, the lender funds against the lower number. An appraisal gap clause commits you to making up the difference in cash, up to a stated dollar limit, rather than walking away.
In a competitive market, sellers prefer offers with appraisal gap coverage because it removes a major risk of contract failure. The downside for buyers: you may end up paying above appraised value with extra cash out of pocket.
How to Use
- Enter your offer price and the appraised value (or your conservative estimate).
- Enter the down payment percentage you're using.
- Enter the dollar amount of appraisal gap coverage in your offer.
- Read the gap, total cash needed, and whether your coverage is sufficient.
Frequently Asked Questions
How does an appraisal gap clause work?
It commits you to bringing extra cash if the appraisal comes in low — up to a stated maximum. Stronger than waiving the appraisal contingency entirely (which means you'd cover any gap regardless of size).
Should I include an appraisal gap clause?
In hot markets where multiple-offer is normal, yes — it makes your offer competitive. Size the coverage to what you can actually bring in cash without breaking your reserves or backing into worse loan terms.
What if the appraisal gap exceeds my coverage?
You can renegotiate price, walk away (if your appraisal contingency is still active), or bring more cash than committed. Sellers may also reduce price if they'd rather close than re-list.
Does the lender require an appraisal gap clause?
No — that's between buyer and seller. The lender just won't fund above appraised value. The clause is the buyer's contractual commitment to bridge the gap with their own cash.
Related Calculators
Appraisal Gap Calculator
Standalone gap calculator with simpler inputs.
Down Payment Calculator
Size the down payment before adding gap coverage.
Earnest Money Calculator
Earnest money also signals offer strength.
Closing Cost Calculator
Add closing costs to total cash to close.
Cash Reserve Calculator
Make sure gap coverage doesn't wipe out reserves.
Home Affordability Calculator
Reset your max price if your offer keeps requiring gap cash.
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Next steps in Finance
Previous calculator
Appraisal Gap Calculator
Estimate extra cash to close when an appraisal comes in low, compare against your gap coverage cap, and see the new loan and payment.
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Estimate annual percentage rate from the loan amount, payment, term, and financed fees to compare offers more accurately.