What Is an Appraisal Contingency?
Home Sale Contingency Brenda Wynn Las Vegas NV Real Estate Berkshire Hathaway HomeServices When a buyer and seller agree to a real estate contract, it typically includes one or more contingencies. Those are terms that have to be met for the contract to be binding and for the transaction to proceed. One common provision is an appraisal contingency. What Is an Appraisal and Why Is It Important? An appraisal is an independent assessment of a property’s value. Sometimes, several buyers get locked in a bidding war, and the final price that a buyer and seller agree upon is higher than the list price. Making a high bid can help a determined buyer beat out the competition, but it can backfire. If the buyer needs to take out a mortgage, the lender will require an appraisal. The company doesn’t want to give a homebuyer a loan for more than a house is worth. If a home appraises for less than the agreed-upon sale price, a mortgage lender can refuse to approve a buyer’s loan application. The ...