---
title: "Appraisal gap — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/appraisal-gap/
---

- [Home](/)
- /
- [Glossary](/glossary/)
- /
- Appraisal gap
Buying a home[All terms starting with A](/glossary/#letter-A)

# Appraisal gap

The shortfall when a property appraises below the contract price, which the buyer generally must cover in cash.

Lending is based on the lesser of price or appraised value, so a low appraisal does not reduce what you owe the seller. It reduces what the lender will finance. The difference has to come from somewhere.

The usual outcomes are renegotiating the price, covering the gap in cash, disputing the appraisal with better comparables, or exercising an appraisal contingency to exit.

## Related terms

- [AppraisalA licensed appraiser’s independent opinion of a property’s market value, ordered by the lender.](/glossary/appraisal/)
- [ContingencyA condition in the purchase contract that must be satisfied, or the buyer can withdraw without losing earnest money.](/glossary/contingency/)
- [Earnest moneyA deposit made with an offer to show the buyer is serious, held in trust and credited toward closing.](/glossary/earnest-money/)
- [Down paymentThe share of the purchase price you pay in cash, becoming your starting equity in the property.](/glossary/down-payment/)

## More in Buying a home

- [Appraisal](/glossary/appraisal/)
- [Closing Disclosure](/glossary/closing-disclosure/)
- [Contingency](/glossary/contingency/)
- [Due diligence](/glossary/due-diligence/)
- [Earnest money](/glossary/earnest-money/)
- [Escalation clause](/glossary/escalation-clause/)

## Have a question about your own situation?

Ondo handles brokerage, lending, property management and notary under one roof, so the answer does not change depending on who you ask.

[Talk to Ondo](/contact/)[Browse all terms](/glossary/)

Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. [Licensing and disclosures](/licensing/)