Platform · Glossary
Gap analysis.
Gap analysis compares the property’s asking price with the PriceDNA Estimate™, the goal-convergent price supported by the selected goal and the current assumptions.
The asking price is the market-facing number in front of the investor. The PriceDNA Estimate answers a different question: what price can the property’s modeled income, expenses, financing, and selected goal support? Gap analysis makes the difference between those two numbers visible.
How the gap is calculated
Gap amount = Asking price − PriceDNA Estimate
Gap percentage = (Asking price − PriceDNA Estimate) ÷ PriceDNA Estimate
A positive gap means the asking price is above the goal-convergent price. A negative gap means the asking price is below it. A zero gap means the asking price meets the selected goal under the current assumptions.
How PriceDNA interprets the relationship
| Modeled relationship | What the report explains |
|---|---|
| No tested price supports the goal | The selected goal is not reached within the tested price range under the current assumptions. |
| Asking price below the PriceDNA Estimate | The property meets the selected goal at the asking price under the current assumptions. The result may still depend materially on the financing and operating inputs used. |
| Asking price equals the PriceDNA Estimate | The asking price meets the selected goal under the current assumptions. |
| Asking price up to 5% above the PriceDNA Estimate | The report treats this as a small gap that may sometimes be addressed through routine negotiation or minor concessions, depending on the seller and deal terms. |
| Asking price more than 5% and up to 10% above | The gap is within negotiating range. A price reduction or seller concessions could bring the deal closer to the selected goal. If the seller cannot meet that range, supported changes to deal assumptions may change the gap. |
| Asking price more than 10% and up to 15% above | The report treats this as a material gap that may require a larger price reduction, seller concessions, or changes to the assumptions supporting the analysis. |
| Asking price more than 15% above | The report treats this as a significant gap. Routine negotiation alone may not be enough to close it. |
These bands describe the report’s interpretation policy. They do not predict what a seller will accept or decide whether the property is a good investment.
What may change the gap
A gap can change when the inputs that drive goal-convergent valuation change. Useful scenarios to pressure-test include:
- income or expense assumptions supported by actual deal data;
- alternative loan terms;
- a different down payment when financing remains a meaningful analytical lever;
- a different selected goal, provided it still preserves the investor’s minimum return and cash flow requirements; or
- a different purchase price or seller concessions.
Goal reduction is not the default way to force an asking price to work. When modeled cash flow is already thin, PriceDNA may omit or qualify that scenario rather than encourage the investor to remove the remaining cushion.
What gap analysis is not
Gap analysis is not an appraisal, a market-value opinion, a recommended offer, or a prediction of seller behavior. It is part of PriceDNA’s personalized real estate analysis: a transparent comparison between the market-facing asking price and the goal-convergent price supported by the investor’s goal and assumptions.