My buyer's lender appraised a $4.7M Scottsdale property at $4.1M and the deal still closed

Appraisal gaps at the luxury end are common enough that a lot of sellers and their agents do build them into the pricing assumption, yes. Whether "routinely" is the right word depends on the submarket, but in thin comp pools above $4M, it happens often enough that sellers learn to hold.

A quick definition for anyone newer to this: an appraisal gap is the difference between what an independent appraiser says a property is worth and what the buyer agreed to pay. When a buyer is financing, the lender will only lend against the appraised value, so a $4.1M appraisal on a $4.7M contract means the lender is only funding based on $4.1M. The buyer has to cover that $600k out of pocket on top of their down payment, or the deal dies.

Your point about the lender's risk profile is the one I think agents sometimes gloss over. The loan-to-value ratio that the lender underwrote, the percentage of the loan against the appraised value, is calculated against $4.1M. If the buyer used financing at all, the lender is actually in a better position than the closing docs make obvious, because the property sold for more. But if the market corrects and the appraisal turns out to be the more accurate number, the buyer absorbed that $600k in exposure personally. That is a real risk, and I would not call the buyer right or wrong, just unconcerned by it in that moment.

Your read on thin comp pools and stale comps is worth confirming with a local luxury specialist who works that Scottsdale submarket regularly. They would have a clearer sense of whether sellers are explicitly pricing with gap coverage in mind.

What price range are you seeing most of your note activity in, and does the appraisal gap dynamic change how you think about the paper you hold?