Mile High Home Group – Welcome to Denver

What Is an Appraisal Gap?

An appraisal gap occurs when a home appraises below the contract price—say, a $600,000 Denver offer where it values at $580,000—leaving buyers to cover the $20,000 difference or renegotiate, common in hot markets chasing 4-6% appreciation.

How Gaps Happen in Denver

After 15+ years in Denver real estate and thousands of transactions, I’ve bridged gaps in bids exceeding comps amid low inventory. Buyers escalate 2-5% over list in Highlands Ranch school zones like Mountain Vista, but appraisers stick to recent sales—$700K ranches appraise $10K-$30K short if updates lag. Littleton bungalows hit snags from dated roofs; core Denver condos less so with uniform data. Lenders halt funding at appraised value, forcing cash from buyers (5-10% of deals) or seller cuts. In the Colorado housing market, spring peaks amplify 20% gap risk.

HOA comps in Highlands Ranch real estate complicate further.

Handling and Negotiating Gaps

Option period inspections flag values early, but post-appraisal (7-10 days), choices split: buyers pay difference (builds equity), request reductions (sellers concede 1-2%), or walk (earnest returns minus fees). Compared to Littleton real estate’s steady comps, Highlands Ranch trailside premiums stretch appraisers. Market cycles widen gaps in booms, narrow balanced phases—waive contingencies at peril.

Cash reserves or 20% down cushion best.

Practical Advice for Buyers and Sellers

Gap Size	Buyer Options	Seller Leverage
$5K-$15K	Negotiate credit	Hold firm
$20K+	Cash or walk	Price adjust

Buyers, cap escalates at 3%, get pre-appraisal comps—offer gap coverage up to $10K with contingencies.

Sellers, price conservatively to comps—highlight updates, accept 1% credits for qualified closes.

My hands-on, concierge-level service anticipates gaps block-by-block, weighs school/HOA fits through market cycles, builds pricing from local sales, and negotiates relentlessly for bridged deals. Clients are long-term relationships and friends, not transactions—integrity, honesty, transparency, and relentless work ethic close the divide.

If appraisal gaps concern your Denver real estate move—Littleton, Highlands Ranch strategies—reach out anytime. I’m here for a no-pressure conversation and honest guidance tailored to the Colorado housing market.