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What is an Appraisal Contingency?

Appraisal Contingency Election (Paragraph 10 of Addendum of Clauses)
1. No Appraisal Contingency in Regional or MAR (must use Addendum)
2. Separate and distinct from Financing Contingency
Appraisal Contingency (Par. 10 of Addendum of Clauses)
1. Contract contingent on obtaining appraisal for value no less than Sales Price
  1. Contingency does NOT continue past deadline
  2. If Appraisal comes in at or above the Sales Price, Buyer may remove the Appraisal
2. If Appraisal below the Sales Price, Buyer must deliver:
  1. Copy of Appraisal; and
  2. Appraisal Notice And/Or Addendum (Form 1333 Par. 2) requesting reduced price (not less than appraised value) within time period (original or “3 day cure”)
3. Seller has three (3) days to accept reduced price or make another offer
  1. 1. Tennis Match” – within 3 days of notice delivery, other party may:
    1. Accept terms;
    2. Continue negotiations; or
    3. Declare contract void subject to 3 day requirement.
4. Failure to Respond to Appraisal Notice And/Or Addendum or a “Tennis Match” notice within 3days renders Contract null and void
Impact of new Financing Contingency (effective 1/1/12)
1. Financing Contingency no longer in Regional Contract. Must use:
  1. Conventional Financing Addendum (Form 1352) Paragraph D;
  2. FHA Financing Addendum (Form 1330) Paragraph B; or
  3. VA Financing Addendum (Form 1338) Paragraph B
2. Rejection for Financing due to appraisal is a valid grounds to void contract under Financing Contingency regardless of whether or not there is an Appraisal Contingency or the Appraisal Contingency has been removed