What Is an Appraisal Gap? Durham Buyer Guide

You found the right home at the right price, but the appraisal came in low. Now what? If you are buying in Durham, you are not alone. Fast offers and shifting comps can create gaps between contract prices and appraised values. In this guide, you will learn what an appraisal gap is, why it happens here, and your best options to keep your purchase on track. Let’s dive in.

What an appraisal gap means

An appraisal gap happens when the lender’s appraisal is lower than your agreed purchase price. Your loan is based on the appraised value, not the price in your contract, which creates a shortfall you must solve.

If the appraisal is low, you typically must do one of three things: bring extra cash, renegotiate the price, or change your financing or contract terms. The exact path depends on your loan program and your contract language, including any appraisal contingency.

Spanish-friendly terms to know:

• Appraisal gap — brecha de tasación: when the appraisal is lower than the agreed price.
• Appraisal — tasación: the professional valuation for the loan.
• Appraisal contingency — cláusula de tasación: contract language that lets you renegotiate or cancel if the appraisal is low.

Why appraisal gaps happen in Durham

Fast-moving offers and rising prices

When multiple offers and escalation clauses push prices up quickly, comparable sales may lag behind. Appraisals rely on recent, closed sales, so rapid appreciation can make appraised value trail the contract price.

Limited or tricky comparables

Durham has older neighborhoods, infill homes, and renovations that do not always have perfect comps nearby. New construction or unique layouts can be hard to match, which can lead to conservative adjustments and lower values.

Timing and data visibility

Some supportive sales may not be recorded or visible in time for the appraiser’s report. Private sales also may not appear in the data an appraiser can use. In a fast season, that timing gap can matter.

Appraiser capacity and lender rules

Busy periods can stretch appraiser availability, and lenders often require conservative methods to protect loan performance. Appraisers may lean on tighter geographic areas or older comps if better data is not yet available.

Loan program differences

FHA, VA, and USDA loans have program-specific appraisal standards and property requirements. These can result in adjustments that differ from a conventional appraisal for the same home.

How the appraisal process works in Durham

The typical steps

1. After you apply for the loan and go under contract, your lender orders an appraisal.
2. The appraiser inspects the property, notes condition and layout, and confirms upgrades.
3. The appraiser researches recent comparable sales in the immediate area and adjusts for differences.
4. A written report is delivered with an opinion of market value.
5. The lender compares that value to your contract price and reviews loan-to-value limits.

Timeline and updates

Most appraisals in Durham take 1 to 3 weeks after ordering. If your agent finds new, relevant comps that recently closed, your lender may request a reconsideration of value, called an ROV.

What appraisers look for

Appraisers focus on recent, nearby sales of similar size, age, and condition. They also consider property condition, quality of finishes, layout, lot size, and neighborhood context, including proximity to employment centers like Research Triangle Park and transportation options.

Cash buyer note

Cash deals can avoid a lender-ordered appraisal. Some cash buyers still choose an independent appraisal or broker price opinion for peace of mind.

What to do if your appraisal is low

Renegotiate the price

Ask the seller to lower the price to the appraised value or meet in the middle. This is common when days on market are higher or when sellers want a smooth closing.

Bring cash to closing

You can pay the difference between the appraised value and contract price with additional cash. Confirm with your lender that your down payment and loan-to-value still meet program guidelines before you commit.

Split the gap

You and the seller agree to share the difference. For example, the seller offers a credit and you increase your cash contribution. This keeps the contract intact when neither side can cover the full gap alone.

Request a reconsideration of value

If you believe the appraisal missed relevant comps or made errors, your agent and lender can submit an organized ROV package. Include closed sales from nearby micro-markets, photos, and documentation for renovations. Strong local comps are often the key.

Explore a second appraisal

A second appraisal is sometimes possible but requires lender approval and may add cost and time. Ask your lender early whether a second opinion is allowed for your loan type.

Change financing terms

Switching loan programs or lenders can change appraisal requirements or loan-to-value limits, but it may reset timelines. Coordinate closely with your lender and agent so you do not miss contract deadlines.

Use appraisal contingency or gap coverage

If your contract includes an appraisal contingency, you may be able to renegotiate or cancel without penalty. Some buyers use an appraisal gap addendum that predefines how much extra cash they will contribute above the appraised value. Make sure your lender is aligned with any gap language.

Seller-side actions

Sellers can help preserve value by providing a clear improvements list, permits, receipts, and a realistic pricing strategy based on very local comps. In rare cases, parties discuss an escrow holdback, which requires lender approval and careful terms.

Durham-specific tactics

• If your home is near RTP or in a mixed market area, pull comps from truly similar micro-markets and include evidence of local demand.
• Ask your lender to use appraisers with experience in the specific Durham neighborhood when possible.
• Leverage Triangle MLS and Durham County public records through your agent to support value with timely, relevant data.

How to avoid appraisal surprises

Buyer checklist

• Review a comp package with your agent before making an offer and discuss appraisal risk by neighborhood.
• Consider an appraisal contingency or define a clear limit for any appraisal gap coverage.
• Ask your lender early about ROV and second appraisal policies if value comes in low.
• Keep cash reserves for a potential gap in fast-moving areas.
• If buying a renovated home, gather documentation for upgrades to give the appraiser a complete picture.

Seller checklist

• Consider a pre-listing inspection and a broker price opinion, especially where comps are thin.
• Prepare a detailed improvements list with receipts and permit information.
• Price for your specific micro-market. Overshooting the comps increases appraisal risk even if buyers bid high.

Communication for both sides

Keep your agent, lender, and appraiser aligned within proper guidelines. Provide comps and documentation quickly. Use local MLS and county records as primary evidence of value.

Spanish-language accessibility

If Spanish is more comfortable for you or your family, ask for bilingual support and translated key documents, including any appraisal contingency language. Share the short glossary below with your household so everyone understands the plan.

Simple Spanish glossary

• Appraisal gap — brecha de tasación: cuando la tasación del banco es menor que el precio acordado.
• Appraisal — tasación: valoración profesional del inmueble para el préstamo.
• Appraisal contingency — cláusula de tasación: condición del contrato que permite renegociar o cancelar si la tasación es baja.

Ready to talk through your options and protect your purchase in Durham? Our bilingual team can help you weigh the tradeoffs, coordinate with your lender, and negotiate the best path forward. Connect with The Cedeno Group Real Estate to get a local plan tailored to your goals.

FAQs

What is the difference between an appraisal and a home inspection?

• An inspection evaluates a home’s condition and needed repairs, while an appraisal estimates market value for the lender using comparable sales and adjustments.

Can an appraiser be wrong, and what can I do in Durham?

• Yes, and you can request a reconsideration of value by submitting better comps and documentation through your lender; in some cases a second appraisal may be allowed.

Who usually pays for the appraisal and a second appraisal?

• Buyers typically pay for the lender-ordered appraisal, and if a second appraisal is approved, buyers usually cover that cost as well unless negotiated otherwise.

What are the risks if I waive the appraisal contingency?

• You accept the risk of paying the cash difference if the appraisal is low, or you risk losing earnest money if you cannot close under the contract terms.

How common are appraisal gaps in Durham right now?

• Frequency varies by neighborhood and season; review current Triangle MLS and Durham County sales data with your agent to understand today’s local risk.

Are there special considerations for FHA or VA appraisals?

• FHA and VA appraisals include specific property standards and may value differently than conventional appraisals, which can affect repairs, timelines, and final value.