In real estate transactions, an appraisal contingency allows the buyer to back out of the deal if the property appraisal comes in lower than the agreed-upon purchase price. If the appraisal contingency deadline is nearing and the appraisal has not been completed, buyers may need to request an extension to ensure they have enough time to review the results and make an informed decision. So what form do you request an appraisal contingency extension?
What form do you request an appraisal contingency extension?
In order to request an appraisal contingency extension, buyers typically need to fill out an appraisal contingency extension addendum or an amendment to the purchase agreement. This addendum outlines the new deadline for the appraisal contingency and must be signed by both the buyer and the seller to be valid.
What is an appraisal contingency?
An appraisal contingency is a clause in a real estate contract that allows the buyer to back out of the deal if the property appraisal comes in lower than the agreed-upon purchase price.
Why would you need an appraisal contingency extension?
An appraisal contingency extension may be needed if the appraisal has not been completed by the original deadline, giving the buyer more time to review the results and decide whether to move forward with the purchase.
How do you request an appraisal contingency extension?
To request an appraisal contingency extension, buyers typically need to fill out an appraisal contingency extension addendum or an amendment to the purchase agreement and have it signed by both parties.
Who is responsible for paying for the appraisal?
In most cases, the buyer is responsible for paying for the appraisal as it is part of the due diligence process to ensure the property’s value.
What happens if the appraisal comes in lower than the purchase price?
If the appraisal comes in lower than the purchase price, the buyer has the option to renegotiate with the seller, request an appraisal contingency extension, or walk away from the deal without penalty.
Can the seller refuse to grant an appraisal contingency extension?
While sellers are not obligated to grant an appraisal contingency extension, refusing to do so may lead to the buyer walking away from the deal, especially if the appraisal comes in lower than the purchase price.
Is the appraisal contingency extension addendum legally binding?
Once signed by both parties, the appraisal contingency extension addendum becomes legally binding and extends the deadline for the buyer to review the appraisal results.
What is the typical length of an appraisal contingency extension?
The length of an appraisal contingency extension can vary depending on the terms negotiated between the buyer and the seller, but it is typically anywhere from a few days to a week.
Can the appraisal contingency deadline be extended more than once?
While it is possible to request multiple appraisal contingency extensions, it ultimately depends on the willingness of the seller to grant them and the specific terms outlined in the purchase agreement.
What happens if the buyer fails to request an appraisal contingency extension before the deadline?
If the buyer fails to request an appraisal contingency extension before the deadline and the appraisal results come in lower than the purchase price, they may be unable to renegotiate or back out of the deal without penalty.
Are there any fees associated with requesting an appraisal contingency extension?
There may be fees associated with requesting an appraisal contingency extension, such as administrative fees or additional costs for extending the closing date, depending on the terms outlined in the purchase agreement.