Once a home seller has accepted an offer to purchase their property, the end of the home selling journey may feel close.
However, the mortgage lender of the homebuyer may appraise the property for a lower amount than the purchase price. If this happens, it’s vital to examine the terms of the appraisal contingency in the purchase contract.
Contingencies are put in place to protect both buyers and sellers in real estate exchanges. An appraisal contingency is very common to find on the buyer’s side of the purchase agreement. It protects homebuyers if their lender's appraisal comes back lower than the amount needed to purchase the home.
Dropping an appraisal contingency clause can be very beneficial to home sellers, as it increases the chances of the purchase decision going through.
This option can be tricky for homebuyers as it leaves them unprotected if the appraisal comes back lower than expected, but may make their offer more appealing in a competitive seller’s market.
If the appraised value of a home is less than the listing price, the seller has the option to back out of the deal if they feel they would end up losing money.
The seller doesn’t have to lower the price, however, if the homebuyer has an appraisal gap guarantee, they have agreed to cover the balance with their own funding if the appraisal comes back low.
Working with your real estate agent, home buyers and seller’s can create and examine the appraisal contingency to make sure it’s best fitting their home selling and buying standards.
Jessica is a dedicated real estate agent who puts her clients' needs first. She strives to exceed their expectations and provides them with true dedication, integrity, and professionalism. She understands that buying or selling a property is a big decision and a significant investment. Jessica has extensive knowledge of the real estate market in New Hampshire and Massachusetts, and she is committed to serving her clients' needs. Whether you are looking for your first home, a vacation home on the lake, or an investment property, Jessica can provide you with all the necessary information about locations, property types, and value. She thoroughly enjoys her work and is passionate about helping her clients buy or sell properties in New Hampshire and Massachusetts. If you're looking for a reliable and knowledgeable real estate agent, Jessica is the right choice for you.