What is an appraisal contingency?

An appraisal contingency makes the sale conditional on an appraisal meeting a specified value. It gives buyers and lenders contractual options—renegotiate, accept seller credit, or terminate—if the appraisal falls short of the agreed threshold.

What if the appraisal is below price?

Common remedies include buyer termination, renegotiation, or seller credit. The form should state notice periods and cure windows; follow those timelines precisely to preserve contractual rights.

Can the contingency be waived?

Yes, a buyer may waive the contingency in writing, but waivers increase the buyer’s financial risk. Documented written waiver is required to avoid disputes and ensure enforceability.

Are electronic signatures valid?

Electronic signatures are legally binding under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention criteria are met.

Is notarization required?

Not usually for the contingency itself; notarization requirements apply to deeds and some acknowledgements. Check state-specific rules for deed acknowledgements and witness needs.

How do I amend the contingency?

Amendments should be in writing, signed by all parties, and include new dates or thresholds. Use an addendum referencing the original contract to avoid ambiguity.

Electronic Signature
Templates
Real estate
Real Estate Appraisal Contingency Form

Real Estate Appraisal Contingency Form

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

REAL ESTATE APPRAISAL CONTINGENCY FORM

This Appraisal Contingency Form supplements and is incorporated into the Purchase Agreement dated between Buyer and Seller identified below, concerning the Property identified in Section 2. Capitalized terms used and not defined herein shall have the meanings assigned in the Purchase Agreement.

1. Parties

Buyer Buyer Contact (address, phone, email) Seller Seller Contact (address, phone, email)

2. Property

Property Address Assessor's Parcel Number (APN) / Tax ID Legal Description

3. Financial Terms

Purchase Price: $ . Earnest Money Deposit: $

Appraised Value Threshold: Buyer’s obligation under the Purchase Agreement is contingent upon an appraisal establishing a Market Value of at least $ . If the appraised value is less than the Purchase Price, Buyer may exercise remedies in Section 4.

Maximum cash Buyer will pay to cover appraisal shortfall (optional)

4. Appraisal Contingency and Buyer's Options

If the Appraised Value as set forth in a written appraisal obtained pursuant to Section 5 is less than the Purchase Price, Buyer may elect one of the following by checking the applicable box and delivering written notice to Seller within the time specified in Section 6 (Buyer must check at least one):

Terminate the Purchase Agreement and receive a full refund of Earnest Money in accordance with the Purchase Agreement.

Deliver a written request to Seller to renegotiate the Purchase Price. If the parties do not execute a written amendment within days after delivery of Buyer’s request, Buyer may terminate the Purchase Agreement and receive a refund of Earnest Money.

Proceed to Close and pay the difference between the Purchase Price and the Appraised Value in cash at Closing, up to $ . If Buyer selects this option, Buyer represents it has funds necessary to cover the stated amount in addition to other Closing obligations.

5. Appraisal Process

Appraisal ordered by: Buyer Lender Seller

Appraiser Name and License (if known)

Appraisal fee to be paid by: Buyer Seller Lender

Appraisal must be completed by a state-licensed appraiser and delivered in writing. The appraisal must state an opinion of Market Value and include supporting data. The appraisal shall be deemed acceptable for purposes of this contingency if it is prepared by an appraiser certified or licensed in the state where the Property is located and meets lender requirements if financing is involved.

6. Timeframes and Notices

Appraisal must be ordered within days after the Effective Date of the Purchase Agreement and the appraisal report must be delivered to Buyer and Seller within days of order.

Buyer must provide Seller with written notice of Buyer’s election under Section 4 within days after receipt of the appraisal report. Failure to timely notify Seller shall be deemed a waiver of the appraisal contingency by Buyer.

7. Representations and Warranties

Buyer and Seller each represent and warrant that they have full authority to enter into this Appraisal Contingency Form, and that the information provided to the appraiser will be accurate to the best of their knowledge. The parties acknowledge that the appraisal is an opinion of value and that it will be relied upon to determine Buyer’s obligations under the Purchase Agreement.

8. Remedies, Default and Effect on Other Contingencies

If Buyer validly terminates under this Appraisal Contingency Form, the Earnest Money shall be disbursed as provided in the Purchase Agreement and neither party shall have further obligation except for liabilities arising from willful breach. If Buyer elects to proceed under Section 4 and subsequently fails to close, Buyer shall be in default under the Purchase Agreement and Seller may exercise its remedies thereunder.

9. Miscellaneous Provisions

Governing Law: This Appraisal Contingency Form shall be governed by and construed in accordance with the laws of the State of , without regard to conflicts of law principles.

Entire Agreement: This Appraisal Contingency Form, together with the Purchase Agreement and any written amendments, constitutes the entire agreement between Buyer and Seller with respect to the appraisal contingency and supersedes any prior oral or written agreements on that subject.

Amendment: Any modification or waiver of the provisions of this Appraisal Contingency Form must be in a writing signed by both Buyer and Seller.

10. Notices

All notices required or permitted under this Appraisal Contingency Form shall be in writing and delivered as provided in the Purchase Agreement or by hand, certified mail, or other method providing a written receipt or delivery confirmation to the addresses set forth in Section 1.

Acknowledgement

By signing below, Buyer and Seller acknowledge that they have read and understand the terms of this Appraisal Contingency Form and that they accept the rights and obligations contained herein.

Buyer:

By:

Date:

Seller:

By:

Date:

What the Real Estate Appraisal Contingency Form Is

A Real Estate Appraisal Contingency Form is a contractual clause or standalone addendum used in property purchase agreements that conditions closing on an appraisal meeting a specified minimum value. It protects buyers and lenders by allowing renegotiation, cure, or contract termination if the appraised value is lower than the agreed purchase price. The form typically sets appraisal delivery deadlines, identifies who orders and pays for the appraisal, and specifies remedies (buyer credit, price reduction, walk-away rights). Parties often combine this contingency with financing contingencies and inspection timelines to coordinate closing risks.

Why an Appraisal Contingency Matters in Property Transactions

An appraisal contingency reduces the buyer’s exposure to overpaying and gives the lender assurance that collateral supports the loan amount. It creates a clear process and deadlines for addressing low appraisals and preserves contractual exit or cure rights without unilateral breaches.

Who Typically Completes the Appraisal Contingency

Real estate agents, buyers, sellers, and lenders routinely encounter appraisal contingencies; each party has distinct responsibilities when the clause is invoked.

Buyers and buyer’s agents who want price protection and formal options if an appraisal is low.
Lenders and loan officers who require evidence that the property value supports underwriting.
Sellers and listing agents who must respond to appraisal disputes or negotiate remedies.

Clear allocation of duties on the form—who orders the appraisal, who pays, and how disputes are resolved—reduces delays and legal risk at closing.

Step-by-Step: How to Fill Out the Appraisal Contingency

Complete the form in sequence to ensure all deadlines and responsibilities are aligned with the purchase contract.

01

1. Insert Price: Enter the purchase price and appraisal threshold.
02

2. Set Deadlines: Add appraisal delivery and response dates.
03

3. Allocate Costs: Identify who orders and pays for the appraisal.
04

4. Sign and Date: All parties sign and retain copies.

Core Elements Every Professional Appraisal Contingency Should Include

A robust form clearly defines value standards, timing, payment responsibility, dispute resolution, and consequences for low appraisals to reduce ambiguity at closing.

Value Standard

Specifies the acceptable appraisal metric, such as a minimum dollar value or a percentage of purchase price, and whether the lender’s or buyer’s appraisal controls.

Timing

Defines precise deadlines for ordering, completing, delivering, and disputing the appraisal to coordinate with financing and closing dates.

Payment Responsibility

States who pays the appraisal fee and whether costs are refundable or credited at closing to avoid later disputes.

Remedies

Lists steps if the appraisal is low: renegotiate price, seller credit, buyer termination, or split cure options with specific timeframes.

Inspection Interaction

Explains how appraisal results interact with inspection contingencies and whether repairs affect value determinations.

Signatures and Dates

All parties’ signatures and dates are required; include initials for each page if state practice or contract custom requires them.

Essential Legal and Security Attributes for the Form

ESIGN / UETA: Complies with ESIGN/UETA standards

Audit Trail: Captures timestamps and IP addresses

Encryption: TLS 1.2/1.3 in transit

Data at Rest: AES-256 encryption

HIPAA (if needed): BAA available for PHI workflows

Access Controls: Role-based signer permissions

Common Preparation Pitfalls to Avoid

Leaving appraisal deadline blank or vague frequently leads to disputes and missed cure windows; always use exact MM/DD/YYYY dates to preserve rights.
Failing to specify who orders or pays for the appraisal can delay authorization and scheduling, often causing closings to slip or parties to argue over fees.
Using subjective remedy language like 'reasonable efforts' without clear timeframes invites litigation; define exact days for responses and negotiation windows.
Neglecting to align the appraisal contingency with financing and inspection contingencies causes inconsistent deadlines and may inadvertently waive buyer protections.

Risks and Consequences of an Incorrectly Prepared Form

Low Appraisal Outcome: Buyer may lose renegotiation rights

Missing Signatures: Can render contingency unenforceable

Late Submission: Deadlines may be waived

Improper Notarization: Invalid acknowledgement risk

Name Mismatch: Creates title or escrow problems

Incorrect TIN: Tax withholding issues possible

How the Appraisal Contingency Typically Operates in a Transaction

This sequence shows the appraisal contingency lifecycle from ordering to closing or termination.

Order Appraisal: Appraisal is ordered per form instructions
Deliver Report: Appraiser sends report to named parties
Compare Value: Party evaluates appraisal vs threshold
Invoke Remedy: Renegotiate, credit, or terminate

Sample Digital Workflow Settings for the Form

Suggested settings to configure when completing and routing the appraisal contingency electronically.

Field	Configuration
Document Format	PDF or DOCX; flatten final copy
Signer Order	Buyer first, seller second, lender CC
Authentication	Email + SMS code recommended
Retention	Enable audit trail and PDF/A export

Digital Signing and Distribution Considerations

Use a platform that supports secure eSignatures, audit trails, and common integrations to streamline routing and retention.

File Types: PDF, DOCX supported
Integrations: Salesforce, Google Workspace, NetSuite
Authentication: Email, SMS, KBA options

E-signature Vendor Comparison for Handling Appraisal Contingency Documents

A neutral comparison of common eSignature providers and core features useful when executing appraisal contingencies; signNow appears first per platform ordering rules.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Real-World Examples: Appraisal Contingency in Practice

Two concise examples show how organizations and brokers incorporate the contingency into closing workflows.

Optica Ventures

A regional investor used the contingency to require lender-quality appraisals

The appraisal came in below asking price
Optica negotiated a seller credit and closed without delay by following the form's specified cure timeline and documentation protocol.

Martin Properties

A brokerage standardized an appraisal contingency template for listings

The template named who orders the appraisal
They reduced appraisal-related closing delays by ensuring consistent ordering and clear payment terms.

Typical Deadlines and Timing Expectations

Key dates in the appraisal contingency determine when parties must act and when remedies may be triggered.

Appraisal Ordered:

Order immediately after contract acceptance to meet delivery deadlines

Appraisal Delivery:

Specify date for appraiser to deliver the written report

Appraisal Objection Deadline:

Date by which buyer must object to value or request cure

Loan Commitment Date:

Align appraisal deadline with lender commitment date

Closing Date:

Final date when remedies must be resolved or closing may be delayed

Frequently Asked Questions About the Appraisal Contingency

Answers to common questions about execution, disputes, and electronic handling of appraisal contingencies.

Need help? Contact support

What is an appraisal contingency?
An appraisal contingency makes the sale conditional on an appraisal meeting a specified value. It gives buyers and lenders contractual options—renegotiate, accept seller credit, or terminate—if the appraisal falls short of the agreed threshold.
What if the appraisal is below price?
Common remedies include buyer termination, renegotiation, or seller credit. The form should state notice periods and cure windows; follow those timelines precisely to preserve contractual rights.
Can the contingency be waived?
Yes, a buyer may waive the contingency in writing, but waivers increase the buyer’s financial risk. Documented written waiver is required to avoid disputes and ensure enforceability.
Are electronic signatures valid?
Electronic signatures are legally binding under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention criteria are met.
Is notarization required?
Not usually for the contingency itself; notarization requirements apply to deeds and some acknowledgements. Check state-specific rules for deed acknowledgements and witness needs.
How do I amend the contingency?
Amendments should be in writing, signed by all parties, and include new dates or thresholds. Use an addendum referencing the original contract to avoid ambiguity.

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