What Is an Appraisal Gap and How Do NH Buyers Handle It?

🏡 What Is an Appraisal Gap and How Do NH Buyers Handle It?

In competitive markets like Plymouth, Campton, Thornton, Rumney, and the rest of Central NH, buyers often run into something called an appraisal gap — a mismatch between what a home appraises for and what a buyer offered.

Here’s how it works and how buyers successfully navigate it.

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What Is an Appraisal Gap?

An appraisal gap happens when:

The home appraises for LESS than the price you offered.

Example:

Offer price: $420,000

Appraised value: $400,000

Appraisal gap = $20,000

Lenders will only lend based on the appraised value, not the offer price.

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Why Appraisal Gaps Happen in NH

Appraisal gaps are more common when:

✔ Inventory is low

✔ Homes receive multiple offers

✔ Buyers bid over asking

✔ Improvements weren’t documented

✔ Rural or unique homes are hard to compare

This happens frequently in towns like Thornton, Campton, Rumney, and Warren, where comps can be limited.

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How Buyers Can Handle an Appraisal Gap

Here are the most common solutions:

✔ Renegotiate the price

Buyers can ask the seller to lower the price to match the appraisal.

✔ Split the difference

Both sides meet in the middle if the gap is small.

✔ Bring extra cash to closing

Buyers can cover part—or all—of the gap out of pocket.

✔ Use an appraisal gap clause

This tells the seller upfront you’re willing to cover a certain amount if the home under-appraises.

Example:

“I will cover up to $10,000 in appraisal gap.”

✔ Challenge the appraisal

If comps were missed or the report has errors, buyers can request a Reconsideration of Value.

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Does an Appraisal Gap Mean You Overpaid?

Not necessarily.

In areas like Plymouth, Lincoln, and around ski regions, demand often moves faster than appraisers can keep up with.

A low appraisal doesn’t always reflect true market value — just what the appraiser could justify with available comps.

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Q&A

Q: Can a seller refuse to renegotiate after a low appraisal?

A: Yes. If you don’t have an appraisal gap clause, the seller can hold firm — but many will renegotiate to avoid restarting the listing process.

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Keywords

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Contact Information / NAP

Jim Johnson Real Estate Agent

58 NH Route 25A

Wentworth, NH 03282

P: (857) 249-7392

W: www.JimJohnsonRealEstateAgent.com

Licensed New Hampshire REALTOR® with Three Hills Real Estate Services

Broker Email: info@ThreeHillsRES.com

Broker Website: www.ThreeHillsRES.com