Morgan Milzow & Ford, Realtors®
Emily Ford, Morgan Milzow & Ford, Realtors®Phone: (248) 722-4239
Email: [email protected]

What is an appriasal contengiency?

by Emily Ford 05/24/2023

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. 


Are appraisal contingencies common?

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. 


Why would a seller not want an appraisal contingency?

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.  


Can a seller back out after a low appraisal?

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.


About the Author
Author

Emily Ford

 

My experience dates back to 2002 when I obtained my degree in Economics from Kalamazoo College and then immediately went to work as a sales manager for a 72 unit, new home development in Clarkston. I am in my 22nd year of full time residential real estate sales and real estate is my number one passion!

· I earned the "Top Producer" award at Morgan Milzow & Ford Realtors from 2007-2023

· My career accomplishments to date include over 1,000 homes sold and in excess of $300M in closed transactions

· I've been voted an Hour Magazine All-Star 2013-2023, an honor only given to the top 5% of Metro Detroit Real Estate Agents

· I'm a lifelong Clarkston resident & service all of Oakland County, parts of Genesee, Livingston and Macomb Counties, and my area knowledge, professionalism and real estate expertise is unparalleled

· As a top-producing & seasoned Realtor I have a strong support staff that handles all facets of your transaction and thus creates a concierge-like real estate process that is as seamless and hands on as it can be, delivering the service you deserve! “Stress free, worry free” is our mission & mantra

· We offer an unmatched marketing plan with preferred positioning on all major Internet outlets and social media, the best in professional photography, staging, handyman services, top-notch negotiating skills, excellent communication & much more!

· In 2022 I was awarded the Clarkston Chamber of Commerce Independence Women of the Year award for excellence in business and for my community contributions. In 2019 I received the Clarkston Community Businessperson of the Year Award. I’m also proud to have served my community as the Clarkston Area Chamber of Commerce President in 2018 & 2019. I'm a past recipient of the NOCBOR (North Oakland County Board of Realtors) Distinguished Service Award, nominated by my peers

· I consistently contribute to other, local charitable causes that are close to my heart including Tree of Dreams, benefitting Neighbor for Neighbor, SCAMP and Clarkston Schools

· My resume also includes being an investment property owner, landlord, land developer and home flipper. With my experience and expertise plus my valuable connections I can also offer temporary housing to clients ensuring the most harmonious moving transition possible!