Finance
A Texas home appraisal comes in $15,000 below the contract price. The buyer has an appraisal contingency. The MOST LIKELY outcome if the parties cannot negotiate a solution is:
AThe lender increases the loan amount to cover the gap
BThe buyer can terminate and receive the earnest money back under the financing contingency✓ Correct
CThe seller must automatically reduce the price
DTREC mediates the dispute
Explanation
If a property appraises below contract price and the buyer has a financing (appraisal) contingency, the buyer can terminate and receive their earnest money. Alternatively, the parties may renegotiate the price or the buyer may pay the difference in cash.
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