An appraisal gap is the difference between what a buyer agreed to pay and what the lender’s appraiser says the home is worth, and someone has to close that gap in cash before the loan can fund at the agreed price. It does not happen automatically. Who covers it, or whether the deal survives at all, comes down to what the purchase agreement says before the appraisal ever gets ordered.
Why the gap shows up
Lenders only loan against the appraised value, not the contract price. If a buyer offered above list price to win a multiple offer situation, or the market moved between when comparable sales closed and when the appraisal was ordered, the appraisal can land under the number both sides agreed to.
The lender will not fund the difference. That part is fixed and does not change by negotiation.
What the contract says matters more than habit
Nevada purchase agreements can include an appraisal contingency, and how it is written decides what happens next. Some buyers waive the contingency entirely, which usually means they are committing to bring the gap in cash if one shows up.
Others write in a specific dollar amount they will cover above the appraised value, capping their exposure. Without that language, a low appraisal can put the whole contract back on the table.
The three ways it usually gets resolved
- The buyer pays the difference in cash, keeping the price the same
- The seller drops the price to match the appraisal
- Both sides split the gap somewhere in the middle
Which one happens depends on how much the seller wants the deal to close and how much room the buyer actually has in cash reserves.
What sellers can do before it happens
Pricing realistically from the start is the best protection, since a home priced near recent comparable sales is less likely to appraise short. A seller can also ask for proof of funds or an appraisal gap guarantee as part of an offer, before accepting one that looks strong on paper but is weak on backup.
Sharing recent comparable sales with the appraiser through the listing agent is normal and can help, though it never guarantees a specific number.
What happens if nobody covers the gap
If the contract has an active appraisal contingency and neither side agrees to bridge the gap, the buyer can typically cancel and get their earnest money back. That is the outcome a seller wants to avoid after weeks under contract, which is why the gap conversation is worth having before an offer is accepted, not after the appraisal comes back low.
Simple summary
An appraisal gap is the space between the agreed price and what the appraisal supports, and the contract decides who pays it. Sellers protect themselves by pricing realistically and paying attention to how an offer is written, not just what the number says.
If you’re thinking about listing and want help reading an offer before you accept one, you can start here: Let’s Talk About Selling Your Home