Real estate glossary
Appraisal contingency
Lets the buyer cancel or renegotiate if the home appraises for less than the agreed price.
If a buyer is getting a mortgage, the lender orders an appraisal to confirm the home is worth what the buyer is paying. The appraisal contingency protects the buyer if that value comes in low.
If the appraisal is short, the buyer can usually ask you to lower the price, pay the difference themselves, meet somewhere in between, or cancel within the contingency period. How long that period lasts is set in your contract, so check the number of days in your agreement.
What it means for you as a seller
A low appraisal is a common reason deals get renegotiated. An offer where the buyer waives or limits this contingency carries less risk for you.
Related terms
- ContingencyA condition in the contract that must be met — or removed — by a deadline, letting the buyer cancel if it is not satisfied.
- Loan contingencyLets the buyer cancel if they cannot get the mortgage described in the contract by the deadline.
- Contingency removalThe buyer's written confirmation that they are giving up a contingency, which usually puts their deposit more at risk if they later back out.
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .