Why WA Buyers Trigger Appraisal Gaps Without Realizing It (2025 Guide)

Appraisals in Washington feel like a mystery to most buyers — and honestly, I don’t blame them. It’s one of the least understood parts of the homebuying process, and yet it has some of the biggest financial consequences.

Here’s the part most buyers don’t realize:

Many appraisal gaps are caused by the buyer’s offer — not by the house or the lender.

Not on purpose.
Not because buyers are doing anything wrong.
But because they don’t understand how WA’s pricing, competition, and appraisal rules interact.

This guide breaks down the real reasons Washington buyers accidentally trigger appraisal gaps, so you can make smarter, stronger decisions and avoid big surprises during underwriting.

1. Buyers Don’t Realize They’re Competing Against “Non-Appraisal Buyers”

In Pierce County, Thurston County, and the JBLM corridor, many buyers don’t care if the home appraises because they can:

• cover the gap with cash

• waive the appraisal contingency

• bring extra down

• restructure their loan

So what happens?

Those offers drive the sale price above what the data supports — and above what a typical buyer’s appraisal will show.

When buyers think:

“We only went $20K over list.”

They don’t realize:

➡️ They went $20K over market-supported value, not just list price.
➡️ The buyers who pushed the price up were prepared to bridge the gap.

This blog explains why some buyers overpay without intending to:
Why Washington Buyers Overpay (And How to Avoid It – 2025 Guide)
 

2. Buyers Think the List Price = Market Value

This is the #1 cause of appraisal issues.

In Washington — especially Tacoma, Puyallup, Graham, Lacey, and Bonney Lake — list price is a marketing strategy, not an appraisal indicator.

Sellers often:

• list low to attract multiple offers

• list high to “test the market”

• list based on emotion

• list based on automated estimates

• list based on upgrades that don’t add real value

When buyers offer:

• $10K over list

• $25K over list

• $50K over list

…they assume they’re still within market value.

Often, they’re not.

This is one reason sellers get confused too:
Why Washington Sellers Still Think Their Home Is Worth More Than the Market Says (2025 Guide)
 

3. Buyers Don’t Understand How Appraisers Choose Comparable Sales

Appraisers must use:

• nearby sold homes

• similar size

• similar condition

• similar age

• similar features

• similar location

They cannot use:

• active listings

• pending sales

• wishful thinking

• emotional value

• multiple-offer pressure

• “what buyers are willing to pay today”

Which means:

A home can sell for $575K because of competition…
…but appraise at $545K because the data supports only $545K.

Many buyers think the appraiser will “match the offer.”
They won’t — unless comps allow it.

A full explanation of why appraisals fall short is in this internal link:
Why Low Appraisals Happen in Pierce County (And What You Can Do About Them)
 

4. Buyers Don’t Realize They Chose the Wrong Comp Set

Buyers often compare the home to:

• remodeled homes

• larger homes

• updated homes

• different school zones

• homes with bigger yards

• homes with views

• newer neighborhoods

• non-busy streets

Appraisers can’t use those comps.

So when a buyer says:

“But that home sold for $600K!”

An appraiser says:

“That home is not comparable.”

This mistake leads buyers to believe the home will appraise higher than it realistically can — triggering a gap.

5. Buyers Add Emotional Value the Appraiser Cannot

Buyers see:

• the perfect layout

• the big yard

• the close-to-JBLM commute

• the cul-de-sac

• the dream kitchen

• the fenced yard for pets

• the school district they want

Appraisers cannot use emotional value.
They can only use data.

When buyers add emotional value on top of an already competitive market, the appraisal gap grows quickly.

6. Buyers Don’t Understand How Condition Impacts Appraisal Value

A gorgeous listing photo can hide:

• aging HVAC

• old roof

• worn windows

• outdated electrical

• older siding

• crawlspace issues

• water intrusion signs

While buyers focus on:

• countertops

• paint

• the open layout

• design choices

Appraisers focus on:

• lifespan

• functionality

• safety

• long-term maintenance costs

This mismatch leads buyers to assume the home is worth more than the data shows.

To understand how condition impacts inspections too, here’s a useful internal link:
Common Inspection Problems in Pierce County
 

7. Buyers Don’t Consider How Interest Rates Impact Appraisal Values

Rates rise → demand shifts → appraisal formulas shift.

When interest rates jump:

• fewer buyers compete

• fewer homes go pending over list

• appraisers use more conservative comps

• past “over list” sales carry less weight

When buyers offer based on yesterday’s market, but the appraisal is based on today’s market, gaps appear.

8. Buyers Don’t Know Their Loan Type Impacts How Appraisal Gaps Are Handled

Different loans = different rules.

Conventional Loans

More flexible
May allow waivers
Buyers can cover gaps

VA Loans

Strict
Buyer cannot be forced to cover gap
Huge protection for military families

FHA Loans

More condition restrictions
Stricter guidelines
Harder to bridge gaps

USDA Loans

Toughest for appraisal issues
Very strict location and condition rules

When buyers don’t understand their loan’s requirements, they walk into offers that cannot support their loan type — creating appraisal problems later.

9. Buyers Think Sellers Will “Just Lower the Price” If Appraisal Comes In Low

In many Washington markets — especially around JBLM — sellers have:

• backup offers

• multiple buyers waiting

• cash buyers

• escalation offers in hand

So when the appraisal comes in low, sellers often say:

“No problem — I’ll sell to someone else.”

This is why deals collapse after going pending:
Why Washington Homes Fall Out of Contract (Real Reasons Deals Collapse)
Buyers often assume the seller will negotiate — but sellers don’t have to.

10. Buyers Don’t Understand How to Protect Themselves During the Offer Stage

Most appraisal gaps can be avoided with:

• realistic pricing

• strategic offers

• understanding comps

• knowing how far is “too far”

• lender guidance

• the right appraisal contingency language

• not overbidding out of emotion

The right strategy prevents disappointment, protects your loan, and helps you secure the home without unnecessary financial stress.

Final Thoughts: Appraisal Gaps Aren’t Random — They’re Predictable

Washington buyers don’t trigger appraisal gaps because they’re careless.
They trigger them because they’re uninformed.

Once you understand:

• how appraisals work

• how comps are chosen

• how offers drive pricing

• how loan types affect value

• how market tempo shapes appraisals

…you can confidently write offers without setting yourself up for surprises.

 If you want help understanding how to write an offer that avoids appraisal issues in Washington, I’d love to walk you through the strategy, the comps, and the protections that keep your purchase safe.

 Written by: Lani Fisher — Washington Realtor Helping Everyday Buyers & Sellers With Confidence