Definition
This is a contract rider that spells out exactly how you and the seller will handle an appraisal shortfall—whether you're paying the gap, the seller is reducing the price, or you're walking away. It removes confusion when the appraisal comes in low.
Where you’ll meet it
What happens after I accept?
See it in Selling my home · Step 6About this term
Addendum clarifies appraisal contingency. Specifies gap handling: renegotiation, cancellation, buyer payment. Appraisal fee responsibility. Dispute resolution process. Professional clarity prevents disputes. State-specific requirements apply. Contingency removal conditions. Critical for appraisal matters. Both parties sign. Protects both interests.
Pro Tip
Make sure your appraisal addendum is clear about who pays any appraisal gap—this prevents disputes when appraisal surprises happen.
Example
Appraisal addendum specified buyer pays appraisal gap up to $10,000.