Not necessarily, because the gap is a negotiation before it's a check. For lending purposes, your loan is sized off the lower of the appraised value or the sale price, which is why a low appraisal creates a gap. But market value is what a willing buyer and a willing seller agree to in an openly marketed transaction. If your price came out of real competition, say a multiple-offer situation, the price itself is strong evidence of fair value, wherever one appraisal landed. You have options beyond writing a check for the difference: - Renegotiate the price down toward the appraised value - Meet the seller somewhere in the middle - Walk away, depending on your contingencies When the market favors buyers, that leverage grows. A seller who has already mentally and logistically moved on (packing, next home lined up) is often motivated to compromise rather than watch the deal collapse over a relatively small figure. Whether you'd start out behind on equity depends entirely on what you negotiate. Talk with your agent about using the low appraisal to reopen price before you assume you have to absorb the whole gap yourself.