What is a Home Appraisal Contingency?
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.
410 Riverside Drive Jasper, Indiana
7 Beds 6 Baths 5,132 SqFt 1.13 Acres
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.
39 Hannah Lane Jasper, Indiana
4 Beds 4 Baths 4,834 SqFt 1.65 Acres
Listing courtesy of Nathan Hanselman from SELL4FREE-WELSH REALTY CORPORATION.
3289 St. Charles Street Jasper, Indiana
4 Beds 4 Baths 3,906 SqFt 0.595 Acres
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.
1376 N Hayland Drive Jasper, Indiana
3 Beds 3 Baths 2,500 SqFt 0.85 Acres
Listing courtesy of LarryCarpenter III from Carpenter Realty LLC.
1749 W 1st Street Jasper, Indiana
4 Beds 3 Baths 2,011 SqFt 0.35 Acres
Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.
464 Kluemper Road Jasper, Indiana
3 Beds 2 Baths 1,851 SqFt
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.
1153 W 13th Street Jasper, Indiana
3 Beds 3 Baths 4,541 SqFt 0.36 Acres
Listing courtesy of Amy Uebelhor from SELL4FREE-WELSH REALTY CORPORATION.
394 Saint Charles Street Jasper, Indiana
3 Beds 4 Baths 2,806 SqFt 0.3 Acres
Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.
4114 Lee Drive Jasper, Indiana
4 Beds 3 Baths 2,588 SqFt 0.26 Acres
Listing courtesy of SteveLukemeyer from F.C. TUCKER EMGE.
4229 New Birch Drive Jasper, Indiana
3 Beds 2 Baths 1,429 SqFt 0.24 Acres
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.
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View the newest homes listed in Dubois County in the last 10 days:
1153 W 13th Street Jasper, Indiana
3 Beds 3 Baths 4,541 SqFt 0.36 Acres
Listing courtesy of Amy Uebelhor from SELL4FREE-WELSH REALTY CORPORATION.
7975 E State Road 56 Dubois, Indiana
3 Beds 2 Baths 1,926 SqFt 1.3 Acres
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.
4229 New Birch Drive Jasper, Indiana
3 Beds 2 Baths 1,429 SqFt 0.24 Acres
Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.