Whether you’re buying or selling a home in Indiana, you probably know a little bit about home appraisals. But what’s a home appraisal contingency? This guide explains.
What is a Home Appraisal Contingency?
Contingencies are conditions that a real estate agent builds into a real estate purchase contract to protect their clients. These contingencies must be met or the deal won’t go through.
In many contracts, real estate agents include a contingency about home appraisals. home appraisal contingencies say that if the home appraises too low, the buyer has the right to walk away from the deal.
What Happens When an Appraisal Comes Back Low?
When a home appraisal comes back low, it means that the appraiser doesn’t believe it’s worth the amount of money that the buyer is asking to borrow. Lenders don’t like to give more money then they have to for a home because statistically, borrowers are more likely to walk away and default on their payments when the home is worth less than they paid for it. That costs the lender a significant amount of money, and they’re stuck with a house they need to turn around and sell. as a result, the lender will most likely tell the buyer that they can borrow the home’s appraised value and not a penny more.
If an appraisal comes back low, buyers have a few options. They can ask the seller to come down on the price, come up with the remainder of the money that they can’t finance on their own, or walk away from the deal.
What Happens to a Buyer’s Earnest Money if a Home Appraises Too Low?
If a real estate purchase contract includes a home appraisal contingency, the buyer typically gets to walk away from the deal with their earnest money intact. The seller doesn’t get to keep the earnest money in that case.
- 5 Bedrooms
- 6 Bathrooms
- 5,748 Sq Ft
- 8.870 Acres
1700 N Newton St. Jasper, Indiana
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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
- 4 Bedrooms
- 4 Bathrooms
- 5,029 Sq Ft
- 2.295 Acres
515 N Weisheit Drive W Jasper, Indiana
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Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.
- 4 Bedrooms
- 5 Bathrooms
- 3,849 Sq Ft
- 0.557 Acres
4288 W Anya Court Jasper, Indiana
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Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.
- 6 Bedrooms
- 4 Bathrooms
- 3,780 Sq Ft
- 0.570 Acres
4807 Killarney Court Jasper, Indiana
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Listing courtesy of Jake Mauntel from American Dream Mauntel Realty.
- 4 Bedrooms
- 2 Bathrooms
- 3,490 Sq Ft
- 0.353 Acres
307 Newton Street Jasper, Indiana
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Listing courtesy of Tama Stemle from RE/MAX Local.
- 3 Bedrooms
- 5 Bathrooms
- 2,867 Sq Ft
- 0.800 Acres
4180 Timberpoint Court Jasper, Indiana
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Listing courtesy of Melody Faulk from RE/MAX Local.
- 3 Bedrooms
- 2 Bathrooms
- 1,365 Sq Ft
- 0.490 Acres
1443 Dexter Court Jasper, Indiana
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Listing courtesy of Adam Boyd from BOYD REALTY & DEVELOPMENT LLC.
- 3 Bedrooms
- 3 Bathrooms
- 2,564 Sq Ft
- 0.440 Acres
3422 Lakeside Dr Drive Jasper, Indiana
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Listing courtesy of Diana Feuerbach from Key Associates of Rockport IN.
- 4 Bedrooms
- 3 Bathrooms
- 2,577 Sq Ft
- 0.900 Acres
1486 3rd Avenue Jasper, Indiana
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Listing courtesy of Steve Lukemeyer from F.C. TUCKER EMGE.
- 4 Bedrooms
- 2 Bathrooms
- 2,100 Sq Ft
- 0.110 Acres
214 W 9th Street Jasper, Indiana
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Listing courtesy of Ruger Kerstiens from F.C. TUCKER EMGE.
- 2 Bedrooms
- 2 Bathrooms
- 1,266 Sq Ft
903-3 Reyling Drive Jasper, Indiana
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Listing courtesy of Kara Hinshaw from Key Associates Signature Realty.
- 4 Bedrooms
- 2 Bathrooms
- 2,280 Sq Ft
- 0.130 Acres
610 E Fourteenth Street Jasper, Indiana
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Listing courtesy of Ryan Craig from RE/MAX Local.
- 2 Bedrooms
- 3 Bathrooms
- 2,568 Sq Ft
- 0.190 Acres
1031 DORBETT Street Jasper, Indiana
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Listing courtesy of Connie Thewes from HOFFMAN & MULLEN REALTY INC.
- 3 Bedrooms
- 2 Bathrooms
- 2,440 Sq Ft
- 0.920 Acres
1766 W State Road 56 Highway Jasper, Indiana
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Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.
- 2 Bedrooms
- 1 Bathrooms
- 1,146 Sq Ft
- 1.130 Acres
6142 N Old Rd. 45 Jasper, Indiana
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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
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221 W Stellar Way Huntingburg, Indiana
4 Beds 3 Baths 2,152 SqFt 0.170 Acres
Listing courtesy of Trae Dauby from Dauby Real Estate.
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Listing courtesy of Adam Boyd from BOYD REALTY & DEVELOPMENT LLC.
4807 Killarney Court Jasper, Indiana
6 Beds 4 Baths 3,780 SqFt 0.570 Acres
Listing courtesy of Jake Mauntel from American Dream Mauntel Realty.