Sunday Spotlight.
The comps are always behind the offers.
Half of Capital Region homes sell above asking. Appraisers price from sales that already closed. Everybody knows both of those facts. Almost nobody writes the offer like they do.
The appraisal isn't a formality at the end of the deal. In this market it's the negotiation you skipped at the beginning.
Picture the week-three phone call. Offer accepted at $18,000 over ask, everybody thrilled, inspection cleared, and then the appraisal lands under contract price. Now there's a hole in the file, two clients who thought they were done, and about seventy-two hours to solve something that was solvable back in April.
Here's the part worth understanding. A lender doesn't finance the price. A lender finances the lesser of the contract price or the appraised value. When the appraisal comes in low, the loan shrinks and somebody has to cover the difference in cash. Not financed. Cash, at the table.
National numbers make this look like somebody else's problem. Roughly nine percent of appraisals came in below contract price earlier this year, which sounds survivable until you notice where that average comes from. It's computed across markets with normal inventory, and those aren't the conditions here.
Run our numbers through it. At roughly 1.1 months of supply, with over half of homes going above asking and contracts signed in about 23 days, there simply aren't many recent sales to pull from, and the ones that exist closed before the last three rounds of bidding. Thin comp data plus fast appreciation is the exact recipe for a gap. The tight market causing the bidding war is the same tight market starving the appraisal.
Having sat on your side of the table, the appraisal was the thing I understood least and feared most, because it always showed up as a surprise. It isn't a surprise. It's arithmetic, and it's forecastable well before anybody writes an offer.
supply
above asking
to contract
to list
contract price
what a lender funds
gets covered
median, a record
The national gap rate is low because most markets have inventory. Ours doesn't. Fewer recent sales means the appraiser is working from a shorter, older list than the one your buyers are competing against.
Three things to get straight before the offer.
None of these are exotic. They're just conversations that work far better in week zero than in week three.
Ask every buyer one more question before the offer.
Not "what's your budget." That one you already ask. Ask what they could put in on top of the down payment if the appraisal landed short, and get an actual number. Most buyers have never been asked and will need a day to answer, which is exactly why you want to ask now rather than at 9pm on a Tuesday in week three.
Then bring that number into the offer as a capped gap clause. On a house you expect to draw multiple offers, a specific, funded gap is often worth more to a listing agent than another few thousand on price, because it signals the deal will actually close. If you want the cash-to-close side run properly before you write it, send me the address and the offer number and I'll turn it around the same day.
"A buyer with a documented $15,000 gap beats a buyer with a vague $20,000 more, because one of them can prove it."
Know your gap number before you need it.
Writing over asking in a market this tight is often the right call. Doing it without knowing what happens if the appraisal disagrees is where it turns painful. The question isn't whether you're willing to pay more than the appraiser thinks it's worth. Sometimes you should. The question is whether you have the cash to do it, because your lender will fund from the lower number and the difference is yours to bring.
Get that figured out first, on a real house with real taxes and insurance in it, so the offer is a decision rather than a bet.
"You can negotiate almost everything in a deal. You can't negotiate with an appraisal you didn't plan for."
The highest offer and the best offer aren't the same thing.
When the offers come in over ask, the one to look hardest at isn't always the biggest number. It's the one that says what happens if the appraisal comes in low. An offer $10,000 higher with no gap language can quietly become a renegotiation in three weeks, and by then you've lost your other buyers and your listing has days on it.
Ask your agent to compare the gap terms side by side, not just the prices. And if your own next purchase is part of this, send me your list price before you go live and I'll map out what the buy side looks like, including what a bridge or a NAF Cash offer changes.
"Price is what the offer says. Certainty is what the gap clause says."
Every week this newsletter argues that the file matters more than the headline. These are the people who lived it, in their own words, from Google, Zillow, Facebook and Experience.com.
Got an offer going out before Friday?
Send me the address and the number you're thinking. I'll tell you what the gap exposure looks like and what your buyer would actually need to cover it. If there's a file hitting walls, tight on cash to close, self-employed income that doesn't look good on paper, or a deal that's fallen apart before, call me. That's exactly where I do my best work.
Sr. Loan Consultant, New American Funding · NMLS #481563 · Albany · NMLS #6606 · Equal Housing Lender.
Local market figures reflect third-party aggregated Albany data for July 2026 and NYSAR data for June 2026. Appraisal figures reflect national lender and NAR reporting for 2026 and are not Albany-specific. Past market performance is not a guarantee of future results. Nothing here is a commitment to lend or an offer of credit.