Understanding the Appraisal Gap: A Smart Strategy in a Competitive Market
In a hot real estate market, how do you make your offer stand out? One effective tactic savvy buyers are using is the appraisal gap strategy.
An appraisal gap occurs when a buyer is willing to pay more than the appraised value of a property—up to a specific dollar amount. This strategy is particularly useful in a multiple-offer situation, helping your offer rise to the top when competing against others. For example, if a property is listed at $300,000 and you agree to pay up to $5,000 over the appraised value, you’re signaling to the seller that you’re serious about closing the deal, even if the appraisal comes in lower than expected.
This approach can be the difference between securing your dream home or losing out to another buyer. Sellers often favor offers with an appraisal gap because it reduces the risk of the deal falling through due to a low appraisal.
Have you used the appraisal gap strategy in your recent home purchase or sale? I’d love to hear how it worked out for you. If you’re planning to buy or sell soon, let’s discuss how this tactic can benefit you. Contact me today!
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