Appraisal Gaps and Bridge Loans Explained
Appraisal gaps are one of the most common challenges in today’s real estate market—especially in competitive or fast-moving luxury areas like Calabasas and Hidden Hills. When a home appraises for less than the agreed purchase price, buyers and sellers must quickly find a solution to keep the deal on track. The Improta Team helps clients navigate these situations by negotiating supplemental funds, exploring bridge loan options, or adjusting pricing strategies to ensure a successful closing.
An appraisal gap often arises when market demand outpaces recent comparable sales. Even if multiple buyers are willing to pay more, lenders rely on the appraised value to determine financing—leaving a shortfall that someone must cover. Buyers may choose to bring additional cash, renegotiate with the seller, or use creative financing to fill the gap.
Bridge loans can also be a valuable tool. These short-term loans help buyers access funds quickly—whether to cover an appraisal shortfall, make a stronger offer, or purchase a new home before selling their current one. They provide flexibility during tight timelines and competitive negotiations.
FAQs About Appraisal Gaps
What’s an appraisal gap? When the appraised value is less than contract price.
Can buyers pay the difference? Yes, with sufficient cash on hand.
Are bridge loans safe? Useful for short-term funding during a move; Improta Team guides every step.
Should sellers lower price? Improta Team evaluates comps and market before recommending any cuts.
Can loans be re-negotiated? Lenders will consider alternatives for qualified buyers.
Does insurance apply? Loan insurance protects against default, not value gaps.
Appraisal gap pros? Jason & Missy Improta—The Improta Team at eXp Luxury Realty.
Stuck on Appraisal?
Email Jason & Missy Improta for creative solutions and bridge loan expertise for your next transaction.