Should Buyers Add an Appraisal Clause?

If you bought a house and it appraised for less than your purchase price, how would you feel? Many times a lower than purchase price appraisal will kill a sale. But what if it didn’t? Would you ask the seller to renegotiate the purchase price?  An appraisal clause could give a buyer the right to renegotiate the price or walk away from the sale if the appraiser felt the buyer was overpaying. 

As a buyer in today’s market, this would be of consideration to me. But if I were happy with the purchase price (maybe satisfied is a better word) I would probably not make this request.

After all, price is relative.

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One Response to Should Buyers Add an Appraisal Clause?

  1. Garth Dexter says:

    An appraisal clause is essential in this market. If it doesn’t appraise, you have the chance to renegotiate. I did this last spring with one of my clients.

    BTW- This is a standard clause in our board contracts, so we’d have to cross it out to eliminate this contingency.

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