Appraisal Gap Coverage

[NJ Valuator]

My opinion of value was $15,000 less than the sale price; but the buyer provided appraisal gap coverage of up to $20,000 in the contract. Despite this the client is still asking for a ROV. What is the purpose of appraisal gap coverage then?!?!

In my rebuttal would it be out of line to state that appraisal gap coverage is typically included into a contract when the parties involved surmise that the contract price exceeds market value as is the case with the subject property.

 

[Dale Floyd]

Putting that statement in your report won’t accomplish anything. I’d just stick with the analysis.

 

[CGinMN]

The appraisal gap is to give the seller reassurance that the buyer will perform regardless of what the appraiser says. It may or may not be a result of the parties thinking the contract price is unreasonable. In a multiple offer situation as the seller I would prefer a lower offer with an appraisal gap to a higher offer with contingencies or little down.

The last thing you want to do is give the client or the parties the impression that the terms of the contact impacted you opinion of value, which it shouldn’t. I would stick to the facts.

 

[Alsie35]

My opinion of value was $15,000 less than the sale price; but the buyer provided appraisal gap coverage of up to $20,000 in the contract. Despite this the client is still asking for a ROV. What is the purpose of appraisal gap coverage then?!?!

In my rebuttal would it be out of line to state that appraisal gap coverage is typically included into a contract when the parties involved surmise that the contract price exceeds market value as is the case with the subject property.

My advice: Don't "Go There".

Just do the ROV within a day and don't do anything that could be interpreted as snarky.

Your job is to appraise the property.

Yes, the "gap coverage" is still there, *BUT* they still have the right to see if they can make it smaller via ROV that yields results.

I know its a PITA. But just hold your nose and do it. And smile through your clenched teeth.

 

[sputnam]

My advice: Don't "Go There".

Agree. Stick to your own work.

 

[Tom D]

Never get angry at stupid. The lender has more power than you do. Lost my sarcasim a long time ago. Just do it fastly, and get it out of the way and forgotten. Your normal rov replay will be enough revenge to the over paying buyer.