What is An Appraisal Contingency and How Can it Impact Your Homebuying Journey?

Dusty Rhodes • July 7, 2025


Whether you’re looking to buy your first home or are a seasoned buyer looking to upgrade or downsize, navigating the housing market can definitely be daunting. Regardless of your experience level, the complex jargon and legalities involved when purchasing a home can be difficult to understand. One such concept all homebuyers should be familiar with is an appraisal contingency. In this guide, we’ll be exploring exactly what an appraisal contingency is and how it can impact the homebuying journey.


What is an appraisal contingency?


An appraisal contingency is a clause in a real estate contract that allows the homebuyer to back out of the transaction or renegotiate the terms of the sale if the property appraisal comes in lower than the agreed-upon purchase price.


Understanding home appraisals


Once the buyer has found a home they wish to purchase, they agree upon a purchase price with the seller, and if they opt for a mortgage loan, they then apply for a mortgage. At this stage, the lender requires an appraisal of the property to determine its fair market value. If the appraisal comes in lower than the agreed-upon purchase price, the buyer may not be able to obtain financing for the full amount and may have to pay the difference out of pocket or renegotiate the terms of the sale—this difference is known as an appraisal gap.


With an appraisal contingency in place, the buyer can protect themselves from being obligated to pay more than the fair market value of the property. If the appraisal comes in lower than the purchase price, the buyer has the option to back out of the sale without penalty or renegotiate the terms of the sale to reflect the appraised value.


What are appraisers looking for?


The appraisal value of a property is determined by a licensed appraiser who evaluates the property’s market value based on several constituents. Certified appraiser John Mulligan of Maui Aina Appraisal Company notes the following six factors: 

  1. Property characteristics: The appraiser considers the configuration, improvements, and amenities of a property such as the square footage, the number of bedrooms and bathrooms, the age of the property, and any unique features like a pool or fireplace. 
  2. Location: The appraiser looks at the location of the property, including the neighborhood, nearby amenities, and school district.
  3. Comparable properties: The appraiser compares the property to three other recently sold (within the last 90 days) properties that are similar in size, age, and features.
  4. Condition of the property: The appraiser evaluates the condition of the property, including any needed repairs or updates.
  5. Market trends: The appraiser considers market trends and economic conditions at place that may affect the value of the property.
  6. Zoning and use restrictions: The appraiser takes into account any zoning or use restrictions that may affect the value of the property.


These six main factors are taken into consideration by the appraiser to determine the fair market value of the property. This appraisal value is extremely important in determining the maximum amount a lender is willing to finance and helps the buyer and seller negotiate a fair price for the property.


Understanding an appraisal contingency – how does it work?


An appraisal contingency states that the sale of the property is contingent upon the property being appraised for a certain value. Here’s how it works:

  1. The buyer and seller agree on a purchase price for the property.
  2. The buyer has a licensed appraiser evaluate the property to determine its value based on factors like property characteristics, location, and comparable properties.
  3. If the appraised value of the property is equal to or higher than the agreed-upon purchase price, then the contingency is satisfied, and the sale can proceed as planned.
  4. If the appraised value of the property is lower than the agreed-upon purchase price, then the buyer can:
  • Negotiate with the seller to lower the purchase price to match the appraised value.
  • Request that the seller make repairs or upgrades to the property to increase its value.
  • Walk away from the sale altogether, as the contingency allows them to do so without penalty.


An appraisal contingency is important for the buyer because it protects them from overpaying for a property that is not worth the purchase price. It also provides a way for the buyer to renegotiate or back out of the sale if the property is appraised at a lower value than expected.


What is a contingent offer?


A contingent offer is a type of offer made by a buyer to purchase a property that is contingent upon certain conditions being met. These conditions typically relate to the sale of the buyer’s current property, securing financing, passing a home inspection, or the property appraisal reflecting fair market value.


What is an appraisal gap clause?


An appraisal gap clause is a provision in a real estate contract that addresses the difference between the appraised value of the property and the purchase price agreed upon by the buyer and seller.


When a buyer obtains financing to purchase a property, the lender requires an appraisal to confirm the property’s value matches the loan amount. In a competitive market, a buyer may offer more than the appraised value to secure the purchase. In this case, an appraisal gap clause can be added to the contract to address any difference between the purchase price and the appraised value.


An appraisal gap clause is designed to protect both the buyer and the seller by providing a clear understanding of how to proceed if the appraised value differs from the purchase price.


What is the difference between an appraisal contingency and a finance contingency? 


An appraisal contingency and a finance contingency are two common types of contingencies included in a real estate purchase agreement. Here are the key differences between them:

  • Definition: An appraisal contingency is a clause in a real estate purchase agreement that makes the sale of the property contingent upon the property’s appraised value meeting or exceeding a certain amount. A finance contingency is a clause in a real estate purchase agreement that makes the sale of the property contingent upon the buyer obtaining financing to purchase the property.
  • Purpose: The purpose of an appraisal contingency is to protect the buyer from overpaying for the property. The purpose of a finance contingency is to protect the buyer from being contractually obligated to purchase the property if they are unable to secure financing. 
  • Timing: An appraisal contingency is typically included in the initial purchase agreement and is usually resolved during the inspection period. A finance contingency is also typically included in the initial purchase agreement and is resolved once the buyer has secured financing (which may take several weeks).


Can an appraisal contingency be waived?


In short, yes, but it is risky. If you choose to waive an appraisal contingency, you are then agreeing to purchase the property at the agreed-upon purchase price, regardless of the appraisal value. 


When should you use or waive an appraisal contingency?


When deciding whether to use an appraisal contingency, here are some factors to consider:

  1. You are obtaining financing: If you are obtaining financing to purchase the property, the lender will typically require an appraisal to determine the value of the property. 
  2. The property is unique: If the property is unique and there aren’t many comparable properties to use for the appraisal, it may be wise to include an appraisal contingency to protect yourself in case the appraised value of the property is lower than the purchase price.
  3. You are concerned about overpaying: If you are concerned that you may be overpaying for the property, including an appraisal contingency can help you back out of the purchase if the appraisal value is lower than the purchase price.


If you’re deciding to waive an appraisal contingency, consider the following:

  1. You are a cash buyer: If you are a cash buyer and don’t need financing to purchase the property, you may consider waiving the appraisal contingency. In this case, you would be assuming the risk that the property won’t appraise for the purchase price. If you are comfortable with this risk, waiving the contingency can make your offer more attractive to the seller.
  2. The property is in high demand: If the property is in a highly competitive market and there are multiple offers, waiving the appraisal contingency can make your offer more competitive. 
  3. You are confident in the value: If you have done your own research and are confident that the property is worth the purchase price, you may consider waiving the appraisal contingency. 


If you do decide to waive an appraisal contingency for whatever reason, be aware that if the property does not appraise for the purchase price, you may be responsible for making up the price difference in cash.


What happens if the appraisal is lower than the sale price


If the house appraises for less than the offer, it means that the appraised value of the property is less than the agreed purchase price. This situation can have several consequences, such as:

  • Renegotiation of the purchase price: If the house appraises for less than the offer, the buyer can negotiate with the seller to reduce the purchase price to match the appraised value. If the seller agrees to reduce the price, the buyer can proceed with the purchase.
  • Additional down payment: If the buyer still wants to purchase the property, they may need to make a larger down payment to compensate for the shortfall in the appraised value. This is because the lender will only provide a mortgage loan up to the appraised value of the property.
  • Cancelation of the deal: If the seller is not willing to renegotiate the purchase price, and the buyer is unable or unwilling to make a larger down payment, the deal may be canceled. 


It’s important to note that a lower appraised value is not always a deal breaker. If the buyer and seller are willing to work together to find a mutually acceptable solution, the purchase can proceed. However, if an appraisal contingency is not in place and this occurs, your loan may be denied unless you decrease your down payment. If you choose to not do so, you will have to walk away from the sale and thus forfeit your money.


What happens if the appraisal is higher than the sale price


If the appraised value is higher than the agreed-upon purchase price, the purchase can proceed as planned with the agreed-upon price since the seller is legally bound to this price regardless of the appraisal value. However, there may be some exceptions depending on the terms of the contract and state laws. If this occurs, this is in favor of the buyer as upon move-in, they receive more equity. This is true with or without an appraisal contingency, but without one the property purchased can proceed without the buyer needing to make up the difference.


Why and why not appraisal contingency


There are several reasons buyers may include an appraisal contingency such as:

  • Financial protection: If the appraised value is lower than the agreed-upon price, the buyer won’t be obligated to purchase the overpriced property.
  • Negotiating power: Having an appraisal contingency allows the buyer to renegotiate the terms of the purchase if the appraised value is lower than the agreed-upon price.
  • Ability to walk away: If the appraised value is lower than the agreed-upon purchase price, the buyer can terminate the deal and get their money back.


Despite the benefits, there are a couple of reasons why a buyer might not want to include an appraisal contingency such as:

  • Less competitive offer: In a competitive market, a seller may favor another offer, one without an appraisal contingency, since there would be fewer barriers to closing.
  • Renegotiation changes: If the appraised value is lower than the agreed-upon purchase price and renegotiation is taking place, it’s possible for the seller to change their offer.


Related FAQs about appraisal contingencies

  • What are other types of real estate contingencies?
    There are several other types of real estate contingencies that buyers may include in their purchase contracts to protect themselves such as a financing contingency, inspection contingency, title contingency, and home sale contingency
  • Is there an appraisal contingency deadline?
    The appraisal contingency deadline is negotiated between the buyer and seller and is typically set at 7-10 days after the appraisal is conducted. If the buyer misses the deadline, they may lose their right to terminate the contract based on the appraisal results. Thus, it is important to understand and meet all the deadlines in the contract with the help of a real estate agent or attorney.
  • How long is an appraisal good for?
    Appraisals are typically considered valid for 120 days (4 months) from the date of the report, but the validity period can vary depending on the type of loan and the lender’s requirements. For example, government-backed loans may have a longer validity period of up to 180 days (6 months). This is because market conditions and other factors can affect the value of the property over time, so the appraisal is only a snapshot of the property’s value at a specific point in time.
  • Who pays for an appraisal?
    In a typical home purchase transaction, the buyer is responsible for paying for the appraisal as part of their closing costs. However, in some cases, the seller may agree to pay for the appraisal. 
  • How long does an appraisal take?
    The timeframe for an appraisal can vary depending on factors such as the size and complexity of the property, the appraiser’s workload, and local market conditions. Generally, the appraisal process can take anywhere from a few days to a few weeks.
  • How much does an appraisal cost?
    The cost of an appraisal varies depending on the location, size, and complexity of the property, but it typically ranges from a few hundred dollars to several hundred dollars.

Source: Redfin


Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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What Stays With the House When You Move?

By Dusty Rhodes • March 30, 2026
When you’re selling your home , it is natural to assume that anything you can safely remove is yours to keep—like the light fixtures you painstakingly cleaned and repaired, or the appliances you bought last year. But the truth is, the buyer may want some of those items, too, and sometimes it's better to part ways with these items for the sake of the sale. Rather than keep everything, you should decide what you'd like to keep and what you'll leave behind as a way to entice buyers into making an offer, particularly in today's market where buyers are holding more of the cards than ever. What stays with the house? Generally, certain items stay with the house when you sell and move. Some features may seem obvious, but the truth is, you're probably expected to leave more behind than you think. Some of these items can include: Built-ins: Built-in bookshelves, benches, and pull-out furniture generally stay inside the home. Landscaping: Trees, shrubs, and any flowers planted in the ground should stay in the yard. Wall mounts: If you have TV wall mounts or picture mounts that might damage the wall if you remove them, it is a good idea to leave them in place when you move. Custom-fit items: If you have custom-made curtains , plantation shutters, or blinds, leave them on the windows and doors. Hardware : If you upgraded the knobs and drawer pulls in the bathrooms and kitchen, you should either leave those behind or install replacements before you move. Alarm systems : Wireless alarm systems are designed to be removed. Otherwise, leave the alarm monitoring station attached and either relocate or cancel the monitoring service. Smoke detectors : Smoke detectors and sprinkler systems should stay in the house, especially if you plan to move before selling the house. What can you take? While you’re expected to leave some items behind, in general your belongings are yours to keep. Here are some examples: Patio furniture, lawn equipment, and play sets : If you have a wooden swing set in the backyard and a bistro table on the front porch, take those items with you. Appliances : Some lenders require that a home have an oven installed before approving a loan, but for all other appliances, it's up to you to decide what you will take and what you will offer as part of the home. Some light fixtures : Generally, homeowners leave light fixtures behind, but if you’re attached to a certain fixture, you can make arrangements with the buyer to take it. Built-in kitchen tools : If you can safely remove a mounted spice rack or the pasta arm, you can take it with you. Rugs, basic curtains, wreaths : Small decor items like rugs or curtain rods that can be safely removed can be taken. What should you consider leaving? Some of your personal items can be used to help sell your house—or increase the asking price. Before you take everything just to take it, consider offering some hot items like the following: Appliances : Homeowners, especially new homeowners, don’t always have their own appliances. Many buyers would be more likely to place an offer on a home if it came fully stocked with appliances. Custom swing and play sets : If you have a swing set or playhouse your children have outgrown and you notice a potential buyer has children, offer to include the item with the deal. Kitchen built-ins : Built-in spice racks, pantry organization, and windowsill shelves can really help sell a kitchen. Consider offering the items to an interested buyer. Light fixtures, curtains, rugs, and other upgrades : If you’ve upgraded the light fixtures or have custom rugs in the entryway, a buyer may be willing to increase his or her offer to keep those items in the home.  If you’re not sure what would entice a buyer, ask your real estate agent to provide suggestions. Don't have an agent yet? Here's how to find a real estate agent in your area.

Top Mistakes Homeowners Are Making in 2026 (And How To Avoid Them)

By Dusty Rhodes • March 23, 2026
Let’s be clear: selling your house is absolutely possible right now. According to the National Association of Realtors (NAR), roughly 11k homes sell every day in this country. And the sellers who are making their moves happen all have one thing in common: they’ve adjusted their strategy to match today’s market. They’re realizing inventory has grown. Homebuyers are more selective. And buyer expectations are higher. The sellers who struggle are usually approaching today’s market with yesterday’s expectations. Here are the three biggest mistakes they’re making – and how to avoid them. 1. Pricing Based on What Their Neighbor Got a Few Years Back Setting your price is the most important decision you make when you sell – and the one that’s most often mishandled. Realtor.com data shows almost 1 out of 5 sellers in 2025 had to drop their price. Here’s what those sellers went wrong. Buyers have more choice and more negotiating power now that inventory has grown. And house hunters will actively avoid your house is if feels like it’s priced too high. That’s why overpricing usually leads to: Fewer showings Less competitive (or lowball) offers Longer time on market And all three of those side effects are things you don’t want to deal with. What To Do Instead: The good news is the cure is simple. Just price for today’s buyer, not yesterday’s headlines. Lean on your agent’s knowledge of recent comparable sales, current competition, and local buyer behavior to land in the value “sweet spot” that drives traffic and urgency from day one. 2. Trying To Skip Repairs That Buyers Now Expect A few years ago, you could sell as-is and still get well above asking. Today? Not so much. Right now, NAR says two-thirds of sellers are making at least some repairs. And the reason why is simple. In a market with more inventory, buyers compare homes side by side. Homes that don’t show well (or feel dated) are going to lose attention quickly, even if the issues are minor. What To Do Instead: Ask your agent which high-impact, low-stress updates they’d recommend for your house. The goal isn’t perfection. It’s helping buyers see themselves moving in without a mental to-do list. Small investments in staging, repairs, and curb appeal can make a huge difference in how quickly offers come in – and how strong those offers are. 3. Playing Hardball When Buyers Try To Negotiate Today’s buyers have housing affordability at the top of their minds. And since money is already tight, they’ll be pickier and will probably ask for some compromises from you. Whether that’s making repairs, giving them a credit at closing, or taking just a few thousand dollars off your asking price, negotiating is normal again. So, if something pops up in the inspection, you’re going to need to be open to talking about it. If you’re not, you may very well see your buyer walk away. And some sellers are figuring this out the hard way. Redfin data shows one of the big reasons home sales fell thru in 2025 was inspection or repair issues. Odds are those homeowners weren’t willing to flex a bit to get the deal done. What to Do Instead: Meet with your agent to make sure you understand what buyers in your area care the most about. Align your price with value, present the home clearly and confidently, and stay open to reasonable negotiations that keep deals moving forward.

10 Aging-in-Place Features Pros Swear By

By Dusty Rhodes • March 16, 2026
They’re often called aging-in-place features, but things like curbless showers, nonslip flooring and wide walkways and doorways can benefit everyone, no matter their age or ability. “Regardless of aging in place, there is a place for these in day-to-day life, whether it be a teenager on crutches, a family member having had surgery, active kids,” designer Dana Bass says. “It’s not just about aging in place. We’ve got to account for unplanned life emergencies.” Designer Tammy Battistessa of Ellaire Kitchen & Bath Design agrees. “Whenever possible, I include aging-in-place and universal design features in every project, as I believe many of these features benefit clients of all ages and abilities, in addition to allowing a client to safely remain in their home for a longer period of time,” she says. Creating a home that can adapt also makes it more sustainable. “Aging in place is a key element to making legacy homes that can evolve over time,” architect Tim Barber says. With all that in mind, we asked more than 50 home design and construction professionals to share the aging-in-place features they always recommend. Here are the 10 that came up again and again. 1. Wide Walkways and Doorways Planning ahead is one of the most important steps when incorporating aging-in-place features. Many of these elements require thoughtful design and construction, so it’s wise to start early — and to consider hiring professionals who understand the nuances. “Thinking through how you will really use the space makes all the difference,” designer Haiku Durden of HDS Design says. “Having a designer involved really makes a difference.” A professional can help you create a plan that works for your current needs and anticipates future ones. “We currently default to aging-in-place features when our clients are near retirement or retirement age,” says designer Jenny Guggenheim of Guggenheim Architecture and Design Studio . “Preplanning by adding blocking behind the wall finish, spacious floor planning to allow for wheelchair or walker use.” In fact, spacious layouts are among the most commonly recommended aging-in-place strategies. Wide walkways and doorways — and generous clearances around furniture and fixtures — make it easier for anyone to move through the home comfortably. Installing a continuous flooring material throughout also reduces tripping hazards caused by changes in height or texture between rooms.