reference
glossary.
25 terms
definition
An appraisal contingency is a clause in a purchase agreement that protects buyers if the property's appraised value comes in below the agreed-upon purchase price. This contingency allows buyers to renegotiate the price, request seller concessions, or withdraw from the sale without penalty. It's a critical safeguard that ensures buyers don't overpay for a property based on professional valuation.
examples
- —The buyer included an appraisal contingency to protect themselves if the home appraised for less than the $450,000 purchase price.
- —When the appraisal came in $15,000 below the contract price, the appraisal contingency allowed the buyer to request a price reduction.
- —Many cash buyers waive the appraisal contingency to make their offers more competitive in hot markets.