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.
938 E Jasper Dubois Road Jasper, Indiana
5 Beds 4 Baths 5,700 SqFt 6.100 Acres
Listing courtesy of Kevin Bayer from RE/MAX Local.
3289 St Charles Street Jasper, Indiana
4 Beds 4 Baths 3,906 SqFt 0.595 Acres
Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.
1928 S A St. Jasper, Indiana
3 Beds 4 Baths 3,376 SqFt 6.258 Acres
Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
5070 W Alder Creek Drive Jasper, Indiana
4 Beds 3 Baths 4,208 SqFt 1.500 Acres
Listing courtesy of Stephanie Hasenour from RE/MAX Local.
4536 W 150 N Jasper, Indiana
4 Beds 4 Baths 2,986 SqFt 1.482 Acres
Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.
1525 Grandview Drive Jasper, Indiana
3 Beds 3 Baths 4,132 SqFt 0.354 Acres
Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.
1245 W 6th Street Jasper, Indiana
4 Beds 3 Baths 3,610 SqFt 1.300 Acres
Listing courtesy of Steve Wigand from ERA FIRST ADVANTAGE REALTY, INC.
872 S Countryside Drive Jasper, Indiana
3 Beds 2 Baths 3,498 SqFt 2 Acres
Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.
3255 E State Road 164 Jasper, Indiana
4 Beds 3 Baths 2,944 SqFt 1.024 Acres
Listing courtesy of Zach Holt from Whitetail Properties Real Estate.
1911 S A St. Jasper, Indiana
3 Beds 2 Baths 1,468 SqFt 0.314 Acres
Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
1761 Sugar Pine Drive Jasper, Indiana
3 Beds 2 Baths 1,829 SqFt 0.346 Acres
Listing courtesy of Ryan Craig from RE/MAX Local.
582 E 36th Street Jasper, Indiana
3 Beds 2 Baths 2,374 SqFt 1.740 Acres
Listing courtesy of KaraHinshaw from Key Associates Signature Realty.
813 Dorbett Street Jasper, Indiana
2 Beds 2 Baths 1,997 SqFt 0.148 Acres
Listing courtesy of Fallon Knies from RE/MAX Local.
1371 W 5th Street Jasper, Indiana
3 Beds 2 Baths 2,403 SqFt 0.287 Acres
Listing courtesy of Tama Stemle from RE/MAX Local.
181 Ashbury Court Jasper, Indiana
3 Beds 3 Baths 2,212 SqFt 0.286 Acres
Listing courtesy of Steve Lukemeyer from F.C. TUCKER EMGE.
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Newest Homes for Sale in Dubois County
View the newest homes listed in Dubois County in the last 10 days:
1805 Field View Court Ferdinand, Indiana
3 Beds 2 Baths 1,475 SqFt 0.312 Acres
Listing courtesy of KaraHinshaw from Key Associates Signature Realty.
858 E Schnellville Road Jasper, Indiana
3 Beds 2 Baths 2,052 SqFt 0.860 Acres
Listing courtesy of Dara O'Neil from F.C. TUCKER EMGE.
1430 Jackson Street Jasper, Indiana
3 Beds 3 Baths 2,268 SqFt 0.172 Acres
Listing courtesy of Marissa Goodness from Carpenter Realty LLC.