How should I evaluate an appraisal-gap commitment?

Test the commitment with actual arithmetic

Use a hypothetical lower valuation and ask the lender to show the resulting permitted loan amount under the proposed product. Then calculate your cash contribution, transaction charges, and reserves after closing. Repeat at the maximum gap you are considering. The amount named in an offer and the change in your cash requirement may not be identical because the loan's structure and down-payment calculation matter.

Have your attorney explain what the clause requires, what happens if the gap exceeds its cap, and whether other financing protections remain. Do not assume a sentence marketed as a limited gap accomplishes the limit you intend. Also identify when you would learn the appraisal result and how much time you would have to act. If the only way to fund a shortfall is an undocumented gift, sale of an asset, or withdrawal requiring lender review, resolve that before promising performance. Competition can motivate a decision, but it does not remove the need for a defined and funded boundary.

• Model a lower valuation with the lender.
• Read the clause's cap and remedies.
• Preserve a funded reserve after the scenario.

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