APPRAISAL GAP BEST PRACTICES
Given the highly competitive market we are experiencing right now, buyers are getting creative in their efforts to gain an advantage. Increasing in popularity is the use of an appraisal gap coverage provision. This provision says the buyer agrees to cover the gap if the appraisal comes back lower than the purchase price up to a certain dollar amount. Several issues may arise when this provision is in play. IAR attorneys drafted this document to make you aware and help guide you through the issues.
Appraisal Gap Best Practices