“A strong offer isn’t just about price—it’s how you protect from appraisal surprises.” – Jen Knox
Selling a home in Seattle or Snohomish County is exciting—but when your property appraises for less than the agreed price, deals can suddenly unravel. That’s where Form 22AD—the appraisal gap form—steps in, helping brokers and listings stand strong. In this post, we’ll help to bring you a better understanding of how Seattle sellers can use Form 22AD to secure sales, outshine the competition, and close with confidence.
📌 What to Expect:
- 15 Minute Forms by Jen Knox Video
- What Form 22AD is and why it matters in Seattle real estate
- Step-by-step on using Form 22AD with or without financing
- Benefits and seller protection strategies
- Risks, disclosures, and fair housing compliance
- Bonus tips for selling a home in Seattle’s dynamic market
How to Use Form 22AD for Appraisal Gaps to Protect Sellers in Washington Real Estate
What is Form 22AD and When Should Sellers Care?
Form 22AD—Additional Down Payment for appraisal gaps—is a one-page addendum used to bridge the difference between the home’s purchase price and its appraised value if the appraisal comes in lower.
- Protects sellers by showing buyer commitment to cover gaps
- Ideal in multiple-offer situations where bids exceed expected appraisals
- Builds seller confidence, reducing deal fall-throughs
Sellers should expect to see this form pop up whenever buyers offer above asking, especially in tight markets like Seattle or King County.
Two Ways to Use Form 22AD
🏦 Option 1: With a Financing Contingency (linked to Form 22A)
- Checks Box 1—ties the appraisal gap to the loan
- Buyer pledges max extra cash to cover any appraisal shortfall
- Buyer must have documented funds; seller gets notification within 3 days
- After notification, if appraisal exceeds the pledged gap, negotiation resumes under Form 22A’s terms
🔒 Option 2: With Standalone Appraisal Addendum (no financing contingency)
- Checks Box 2—used when there’s no loan fallback
- Buyer discloses available contingent funds (paragraph 2A)
- States max down payment they’ll apply (paragraph 2B)
- Timeline and rules mirror Option 1
Both options force transparency—buyers must prove they have the cash and notify sellers promptly, ensuring fair play.
Why Seattle Sellers Win with Form 22AD
- Stronger offers in competitive markets
Buyers using Form 22AD demonstrate real financial backing—not just optimism. - Reduce appraisal-based renegotiations
Sellers avoid forced price drops after underwhelming appraisals. - Faster closings, fewer delays
Clear gap coverage and timelines allow momentum to continue.
This strategy also safeguards sellers from falling into appraisal pitfalls, offering peace of mind during negotiations.
Potential Pitfalls & Disclosure Responsibilities
Form 22AD comes with obligations:
- Buyer must have sufficient funds. With King County closing costs and fluctuating interest, the pledged amount must realistically cover the financial gap.
- Notification timelines matter. Sellers must receive appraisal-gap notices within the 3-day window or according to whatever adjusted timeline is chosen.
- Compliance with fair housing and NAR changes. Content must not steer or suggest bias—focus purely on facts and forms.
- No unauthorized advice. This is not tax or legal counsel—recommend professional guidance where needed.
Form 22AD in Action: Step-by-Step for Seattle Listings
- Your buyer signs Form 22A or 22AA.
- Decide if they’ll cover the appraisal gap—then add Form 22AD.
- Indicate Option 1 (if financing) or Option 2 (if cash or backup).
- Specify maximum additional down payment and confirm funds.
- Agree on the notification period (default 3 days).
- If appraisal falls short:
- Buyer notifies seller within timeframe
- Funds are released; any over-gap renegotiated under financing rules
- Sale continues confidently—deal protected.
FAQs About Form 22AD
Q: Does Form 22AD guarantee sale if appraisal is low?
A: It doesn’t guarantee closing, but it ensures buyers take responsibility for the gap up to their pledged amount—reducing seller risk.
Q: Can sellers introduce Form 22AD?
A: Yes. Sellers can request it in multiple-offer scenarios to test buyer commitment and financial transparency.
Q: Is Form 22AD the same as an escalation clause?
A: Not exactly. Escalation clauses increase offers automatically—Form 22AD deals with the appraisal gap after final offer amounts are set.
🧠 Key Takeaways
- Form 22AD: your tool to secure sales above appraised value
- Two options—financed or cash—but both ensure transparency and timely communication
- Benefits include stronger offers, smoother sales, and fewer renegotiations
- Obligations include proving funds, honoring timelines, and respecting compliance rules
Final Thoughts on Form 22AD
Form 22AD is a powerful ally for Seattle sellers looking to safeguard their sale in a competitive real estate landscape. Whether you’re working with buyers in King County or Snohomish County, this form helps solidify offers by requiring buyers to prove their financial ability to cover appraisal shortfalls. You gain leverage, clarity, and assurance that your deal won’t crumble when an appraisal comes in low.
This tool might just be what sets your listing apart in multiple-offer situations—sending a clear signal that you and your buyer are ready to close, come what may. If you’re preparing to list in Seattle, have questions about Form 22AD, or simply want a trusted broker to guide you through this fast-paced market, reach out to The Madrona Group and let us help you sell with confidence.
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