Appraisal contingency
A contingency that lets the buyer walk or renegotiate if the home appraises for less than the purchase price. Buyers paying cash sometimes waive it. Financed buyers usually keep it.
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Free to set up. No credit card.Part 1 of 4
Why a seller cares
It is the buyer's door out if the home appraises under the price, and it is why a low appraisal is a negotiation rather than the end. An offer that waives it is telling you the buyer will cover a gap themselves.
Part 2 of 4
A simple example
Contract price $310,000. The appraisal comes in at $300,000. The buyer has an appraisal contingency, so the $10,000 gap has to be settled before closing.
| What the buyer does | What follows |
|---|---|
| Asks for a price cut to $300,000 | You accept, counter, or decline; declining lets them walk with their deposit |
| Brings the $10,000 themselves | The price stays and the loan is written against $300,000 |
| Waived the contingency in the offer | They owe the gap either way; walking away risks their deposit |
The contingency decides who carries the gap between the price and the appraised value.
Part 3 of 4
What people get wrong
That a low appraisal kills the deal. It reopens the price, and most sales with a gap still close after one of three fixes.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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