Multiple Offers: Appraisal Gap Coverage

[Paul Wolfson]

Hello BiggerPockets family.

In the article below it mentions strategic ways to get your offer accepted including "Appraisal Gap Coverage" strategy.

Say a home is listed for $100K, you go under contract on this home for $110K, but the appraisal only comes in at $105K. Your appraisal gap coverage now kicks in, you come up with $5,000 cash. 

Question: Is this $5,000 cash considered like a credit to the seller (money lost forever) or can I think of it as simply like a larger down payment (money I can recoup later)?

https://www.biggerpockets.com/blog/7-tips-offer-accepted-hot-market?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%206/21/20&utm_channel=28425