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

Dusty Rhodes • July 3, 2023

Are you a first-time homebuyer? Or are you a seasoned buyer looking to upgrade or downsize your living space? Regardless of your experience, navigating the housing market can be daunting, especially when it comes to understanding the complex jargon and legalities involved in purchasing a property. One important concept that all homebuyers should be familiar with though is the appraisal contingency. In this guide, we will explore what an appraisal contingency is and how it can impact your 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.


When a buyer applies for a mortgage to purchase a home, 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.


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 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 home being appraised reflects fair market value.


For example, a buyer might make a contingent offer on a property they want to purchase, but the offer is contingent upon the sale of their current home. If their home sells within a specified period, the contingent offer becomes a firm offer and the sale proceeds as planned.


How does an appraisal contingency 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 professional appraiser evaluate the property to determine its value. The appraiser considers factors such as the property’s size, location, condition, and recent comparable sales in the area.
  3. If the appraised value of the property is equal to or higher than the purchase price agreed upon by the buyer and seller, 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 has several options, such as:
  • 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 because it protects the buyer 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.


Difference between the 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, on the other hand, 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. Whereas, 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.


What happens when the house appraises for less than your offer?


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, including:

  • 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 at the agreed price, even though the appraisal value is less, the buyer 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. This can be frustrating for both parties, as it means that the transaction cannot proceed as planned.


It’s important to note that a low appraisal is not always a deal breaker. If the buyer and seller are willing to work together to find a mutually acceptable solution, they may still be able to proceed with the purchase.


Appraisal contingency example


Here’s an example of how an appraisal contingency might be used in a real estate transaction:


Bob is interested in buying a house in Las Vegas that is listed for $400,000. He makes an offer of $400,000, and the seller accepts his offer. However, before the sale can go through, the property must be appraised to ensure that the purchase price is fair and reasonable.


If the appraisal comes back and values the property at $380,000, Bob has the option to either:

  1. Walk away from the deal and receive his earnest money deposit back.
  2. Negotiate with the seller to lower the purchase price to match the appraised value.
  3. Agree to pay the original purchase price even though the property was appraised for less.


In this scenario, Bob has the protection of an appraisal contingency, which allows him to back out of the deal or renegotiate the price if the property doesn’t appraise for the agreed-upon amount.


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 will also require an appraisal to ensure that the property is worth the amount of the loan. In a competitive real estate market, a buyer may offer to pay more than the appraised value of the property in order to secure the purchase. In this case, an appraisal gap clause can be included in the contract to address the potential difference between the purchase price and the appraised value.


The clause may state that if the appraised value comes in lower than the purchase price, the buyer will be responsible for paying the difference out of pocket, up to a certain amount. Alternatively, the clause may allow the buyer to back out of the contract or renegotiate the purchase price if the appraised value is significantly lower than the agreed-upon price.


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.


When should I use or waive an appraisal contingency?


Here are some factors to consider when deciding whether to use or waive an appraisal contingency:


Use an appraisal contingency when:

  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 appraiser values the property 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 give you an out if the property doesn’t appraise for the purchase price.


Waive an appraisal contingency when:

  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, but if you are comfortable with that 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. However, be aware that if the property doesn’t appraise for the purchase price, you may be responsible for making up the difference in cash.
  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. However, be aware that if the property doesn’t appraise for the purchase price, you may again be responsible for making up the difference in cash.


What determines the appraisal value of a home?


The appraisal value of a home is determined by a licensed appraiser who evaluates various factors such as:

  1. Property characteristics: The appraiser considers the square footage of the property, the number of bedrooms and bathrooms, the age of the property, and any unique features such as 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 recently sold properties in the area that are similar in size, age, and features to determine a fair market value.
  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 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.


All of these factors are taken into consideration by the appraiser to determine the fair market value of the property. The appraisal value is 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.


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. Here are some common types of contingencies:

  1. Financing contingency: This contingency allows the buyer to back out of the transaction if they are unable to secure financing to purchase the property.
  2. Inspection contingency: This contingency allows the buyer to have a professional home inspection conducted to identify any issues with the property. If significant issues are found, the buyer can negotiate repairs or back out of the transaction.
  3. Title contingency: This contingency allows the buyer to back out of the transaction if there are issues with the property’s title, such as liens or disputes over ownership. 
  4. Home sale contingency: This contingency is used when the buyer needs to sell their current home before purchasing the new property. If the buyer is unable to sell their home, they can back out of the transaction.


Including these contingencies in the purchase contract can give the buyer more protection and flexibility during the transaction. However, it’s important to note that including too many contingencies can make the offer less attractive to the seller, so buyers should consider which contingencies are most important to them.


FAQs about appraisal contingencies


Is there an appraisal contingency deadline?

The appraisal contingency deadline is negotiated between the buyer and seller and is typically set at 7 to 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. It’s 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. Government-backed loans may have a longer validity period of up to 180 days (6 months). However, 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.


Can a seller back out if the appraisal is high?

It’s rare for a seller to back out of a transaction because the appraisal value is high. Generally, once the purchase agreement is signed, the seller is legally bound to sell the property to the buyer at the agreed-upon price, regardless of the appraisal value. However, there may be some exceptions depending on the terms of the contract and state laws. Buyers and sellers should review the purchase agreement carefully and consult with a real estate agent or attorney if they have concerns.


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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Before You Fall in Love with a House, Do This First.

By Dusty Rhodes • April 20, 2026
Be honest. Have you started looking at homes online yet? If you have, it’s already time to get pre-approved . Because here’s what not enough people know. If buying a home is on your radar – even if it’s more of a someday plan than a right now plan – you don’t want to wait until later on in the process to tackle this step. No matter what you’ve heard, pre-approval isn’t about commitment . It’s about clarity . And here are the two big ways pre-approval sets you up for success. You Know Your Numbers Up Front During the pre-approval process, a lender will walk through your finances and tell you what you can borrow based on your income, debts, credit score , and more. And once you have that number, your search becomes a lot more focused. With a mortgage pre-approval, you know what you can borrow, so it’s easier to figure out your ideal price point, and what you can actually afford. And that clarity is key. Because if you just start browsing online and just guess at your price point, you run the risk of falling for a house that’s outside of your price range – or missing out on ones that aren’t. You want this number to be clearly defined before your search. Here’s why. You Can Move Quickly When You Find the One This is how a lot of home searches go today. You scroll through listings just to see what’s out there, and then it happens. You fall in love with something you’ve seen online. If you’re already pre-approved? You’re probably in great shape. But if you’re not… Instead of being able to jump on that house and quickly make an offer, you have to scramble to get a lender, gather the financial documents, and then submit the necessary pre-approval paperwork first. And while you’re waiting to hear back from your lender, someone else who’s more prepared could beat you to the house. As Bankrate explains: “The best time to get a mortgage preapproval is before you start looking for a home. If you find a home you love but don’t have a preapproval in hand, you likely won’t have time to get preapproved before you need to make an offer...” And that’s avoidable, with the right prep. Because while you can’t control when the right home shows up, you can be ready for it. Think of it like showing up to the starting line with your shoes tied and your warm-up done – while everyone else is still looking for parking. It’s not about rushing your timeline. It’s about removing the delay between finding the right home and being able to move on it. One Thing You Need To Know About Pre-Approvals Speaking of timing, pre-approvals do have an expiration date. So, be sure to ask your lender how long it’s good for. The Mortgage Reports explains: “ Mortgage preapproval letters are typically valid for anywhere from 30 to 90 days. However, a preapproval can be updated and extended if the lender re-checks your information.” Doing the right prep and knowing this information can make the whole process a lot smoother. You don’t have to be ready to buy to be ready to buy. Getting pre-approved doesn’t mean you’re committing to buy right now. It just means you’ve taken a step to understand your numbers. And when a home catches your attention, you’re prepped and good to go. Bottom Line Ask yourself this: if your perfect home popped up tomorrow, would you be ready to make a move? If the answer is no and you want to buy, it may be time to get pre-approved. You don’t feel behind before your search even officially kicks off.

How to Form New Habits To Keep Your Home Clutter-Free

By Dusty Rhodes • April 13, 2026
Tired of an untidy house? Try a new approach by adopting habits that automatically keep your home orderly Keeping our homes orderly and free of clutter is a struggle for many of us, especially if we’re not naturally organized . If you fall into this category, there’s definitely hope — you just may need to change your habits. Before you roll your eyes and shrug off that idea as impossible, let me tell you what has helped me keep a tidier home. I tried a concept called the “habit loop,” which is described in The Power of Habit: Why We Do What We Do in Life and Business, the best-selling book by Charles Duhigg. The habit loop consists of three steps: cue, routine and reward. The cue is a reminder that initiates the new behavior. The routine is the behavior itself. The reward is the benefit you get from implementing the new behavior. Duhigg says that during the first two weeks of developing a new habit, it’s important to give yourself a treat that you really enjoy right after you complete the new behavior. This will teach your brain to enjoy the new routine. While I’m a professional organizer and really do enjoy decluttering and organizing, I also have an extremely busy life and like to do a lot of other things besides organizing my house. Using the habit loop really helped me get into daily, automatic tidying habits. Perhaps this approach could offer a fresh, effective way for you too to conquer clutter in your home. Here’s how I use it. Tackle Your Own Spaces First If you want to form new no-clutter habits, it’s usually easiest to begin by dealing with your own possessions in spaces you don’t share with all family members. Personally, I live with some wonderful but messy people, so if you’re in the same situation, I recommend you start with your bedroom and bathroom. Duhigg says there’s no precise time frame for how long it takes to form a new habit, but other researchers report it takes 21 to 66 days or even longer. Personally, I needed 21 to 45 days of the habit loop to form a new habit, depending on what the routine was. After that, the behavior became automatic. 1. Make your bed. No matter how messy the bedroom is, a made bed makes it neater. To create a cue for making the bed, pick something you do without fail every day, such as turning off your alarm. It’s best to do the new behavior as soon as possible after the reminder. (I sometimes get distracted if I don’t make my bed right after my cue, and then the bed might remain unmade all day.) After you make the bed — or, for that matter, after you do any new task you’re trying to make habitual — be sure to reward yourself. Your reward can be as simple as a silent “Good job!” you tell yourself or as ritualistic as brewing your morning cup of coffee and then enjoying sipping it. Just remember to give yourself a compliment or perk for working toward your tidy-house goal. 2. Clear your bathroom counters. Brushing my teeth has become the cue I use to trigger my habit of clearing my bathroom counters both morning and night. Each morning after I brush, I put away my makeup, hair products, blow dryer and toothpaste. Then I wipe off the water that has collected on the countertops. I repeat the routine at night, putting away my lotion and other nighttime beauty products. Then I congratulate myself on a job well done. Though I didn’t get it right the first few days, within 21 days I knew I’d managed to develop this habit when I automatically began clearing the counters after brushing. For me, coming home to a clean bathroom is the greatest reward! 3. Put away your attire after wearing it. On most days I wear two different outfits, one for work and one for exercise. If I’m not paying attention to where I put my things, a mess can quickly build up. So I decided that removing my clothes would be the cue to place dirty clothes in the hamper and those I’ll wear again neatly in the closet. If you share a closet with a partner who doesn’t want to participate in this routine, you have a couple of options: You can put your partner’s clothes away or leave them out, knowing that at least half the mess is put away. Since nagging or brooding rarely changes other people’s habits, it might be better to give yourself a reward for cleaning up your own mess and move on. Tackle Common Rooms Next As you move into the common areas of your home, prepare for potential barriers to establishing tidy habits since you may be dealing with other family members’ messes. While this can be frustrating, if family members aren’t cooperative I recommend simply focusing on clearing your own mess. Hopefully, your new habits will eventually rub off on your family. If not, well, your home will still be less cluttered than it was before your new habits. 4. Unbury coffee and end tables. Your cue for clearing the tables in your living room could be turning off the television or putting down the book you were reading. Remove cups, glasses and bowls from the room’s flat surfaces and place them in the dishwasher. Put magazines back in their rack or recycle those you’ve finished reading. Place remote controls in a basket next to the television. Put away books and papers and anything else left cluttering the room. Then congratulate yourself. Your living room will look great in the morning when you start your day. 5. Clear the kitchen counters. Mail, school papers, ear buds, cellphones, vitamins, dog treats, receipts, tissue boxes, keys and more can litter kitchen countertops, making food prep difficult. Plus, this type of miscellaneous debris makes the kitchen look messy and disorganized even if cooking surfaces are cleared. My personal cue for clearing my countertops each night is closing my dishwasher door after I load it. I then scan all the miscellany on the counters and quickly sort and put everything in its place. This may take me an extra 10 minutes, but by doing it each evening I find it is easier to keep the counters clear during the day. I then reward myself with a small piece of chocolate since this habit is much harder to implement than others! My other reward is coming downstairs in the morning to a clean kitchen. 6. Tidy your front hall. I walk through my front hallway on the way to bed and use the walk as my cue to tidy up the space. We have a hall closet where I can store shoes and coats, and each family member has a basket in the closet for personal items. If you don’t have a front hall closet, you might consider storing catchall baskets under a decorative table. I tell myself, “Great job!” before I head off to bed. It’s wonderful having a clutter-free front hall, especially when unexpected visitors stop by. Develop New Habits on What You Bring Into Your Home 7. Manage your mail. Mail is a major source of clutter in many homes. To cut down on the volume, you might want to receive bills and magazines electronically. There are also tools available for unsubscribing from catalogs and unsolicited credit card offers; visit DMAchoice.org or Catalogchoice.org for more information. Even with these steps, mail still has a way of piling up and causing a mess. One relatively easy habit to develop is sorting your mail before you enter the house. I collect my mail from the mailbox and walk directly to my recycling bin, where I immediately place advertising circulars. I then open unfamiliar envelopes (which usually are ads) and toss them in the bin. Since I receive most of my statements electronically, I’m left with very little to bring inside. Remaining items go into an inbox for incoming mail. I then give myself a pat on the back for preventing clutter from entering my house. 8. Be intentional with your purchases. Another habit to consider implementing is being mindful of your purchases. I’ve developed the habit of thinking seriously about the clutter factor of every purchase before buying. As I reach for my credit card, I am reminded to stop and consider whether I already own something that will suffice. I also think about where I’m going to store the item or what I’ll get rid of to make room for the new purchase. For example, when I’m considering a new pair of pants, I ask myself what I have in my closet that might be similar. If I already have too many similar items and don’t want to part with any I already own, I skip the new purchase. I use a similar approach when considering household and kitchen items. My purchases are always intentional because I’m working hard to live in a clutter-free home. I deserve a big pat on the back for working on this habit. I’m not only reducing clutter but I’m also leaving more money in my bank account at the end of the month to spend on things I truly want or need. 

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.