Real Estate Math

An Oklahoma buyer makes a purchase offer of $365,000. The appraiser values the home at $358,000. The lender will finance 80% LTV. How much cash must the buyer bring to closing (down payment + appraisal gap), ignoring closing costs?

A$73,000
B$78,600✓ Correct
C$79,400
D$71,600

Explanation

LTV is based on the LOWER of purchase price or appraised value = $358,000. Loan = $358,000 × 80% = $286,400. Buyer pays purchase price minus loan: $365,000 − $286,400 = $78,600. Actually: down payment = $365,000 − $286,400 = $78,600. Answer B.

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