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.
Your Room opens on this part of the sale, with the offer and everything before it already ticked.
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See how it worksWhere this comes up in a sale, and what follows
- Clear title (comes before)
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
In your Room, this word explains itself where it appears.
Your Room defines appraisal contingency in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.