Contracts
What is an 'appraisal contingency' in an Idaho purchase contract?
AA clause requiring the appraisal be done within 48 hours
BA clause allowing the buyer to renegotiate or cancel if the property appraises below the purchase price✓ Correct
CA clause guaranteeing the appraisal will equal the purchase price
DA clause requiring the seller to pay for the appraisal
Explanation
An appraisal contingency protects the buyer by allowing them to renegotiate the price or cancel the contract (and recover earnest money) if the property appraises for less than the agreed purchase price.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
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