Contracts
An appraisal contingency in a New Mexico purchase contract protects the buyer because it:
AGuarantees the property will appraise at the purchase price
BAllows the buyer to void or renegotiate if the property appraises below the purchase price✓ Correct
CRequires the lender to approve the loan
DGives the buyer 30 days to conduct inspections
Explanation
An appraisal contingency protects the buyer by allowing them to void the contract or renegotiate the price if an appraisal shows the property's value is less than the agreed purchase price.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
State-Specific Concepts
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