appraisal gap

Definition

The painful difference between what a buyer offered and what the property actually appraised for, requiring either price renegotiation or the buyer coughing up extra cash. It's the financial buzzkill of hot markets where emotions outbid mathematics.

Example Usage

We're facing a 30k appraisal gap—either the seller comes down or you need to bring more cash to closing.

Origin

Became common terminology during competitive markets of the 2010s-2020s when offers frequently exceeded appraised values

Fun Fact

Some buyers now include 'appraisal gap coverage' in offers, promising to pay up to a certain amount above appraised value, essentially waiving their lender's opinion on what constitutes sanity.

Source: Competitive market transaction terminology

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contingent

In real estate and business, a condition that must be satisfied before a deal becomes final—essentially an escape hatch built into your contract. Common contingencies include financing approval, home inspections, or the buyer winning the lottery. It's the legal equivalent of saying 'I'm in, but only if...' and everyone agreeing to wait and see.

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rate lock

An agreement that freezes your mortgage interest rate for a specified period while you complete the purchase. It's financial stability in an unstable world, for 30-60 days at least.

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