How does the appraisal gap clause work in a Grand Rapids offer?

An appraisal gap clause is a written commitment by the buyer to bring additional cash to closing if the appraised value comes in below the offer price, up to a stated dollar cap. Caps in Grand Rapids 2024 to 2026 typically range from $5,000 to $25,000 depending on offer strength and price point. The clause has become a standard tool for winning multiple-offer situations in West Michigan without removing the appraisal contingency entirely. Without an appraisal gap clause, a standard appraisal contingency lets the buyer renegotiate or walk if the appraisal is low. With a gap clause, the buyer commits to closing anyway up to the stated cap. The two tools are complementary: many Grand Rapids buyers keep the appraisal contingency in place and add a $10,000 or $15,000 gap to make the offer more competitive while preserving the right to walk if the appraisal comes in dramatically low.