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ApplyThis Appraisal Contingency Addendum is made on [Date] and is attached to and made part of the following real estate purchase agreement:
Agreement Date: [Date]
Buyer: [Full Name]
Seller: [Full Name]
Property Address: [Property Address]
This Addendum sets out the parties’ agreement regarding the property appraisal and the effect of the appraisal on the purchase transaction.
Except as stated in this Addendum, all other terms of the purchase agreement remain unchanged and in full effect.
This Addendum is based on a purchase price of:
[$Amount]
The property must appraise at not less than:
For purposes of this Addendum, the appraisal shall be performed by:
☐ a licensed or certified appraiser selected by the lender
☐ another qualified appraiser acceptable under the financing or contract process
☐ other: [Describe]
The appraisal contingency shall remain in effect until:
[Date]
The Buyer shall use reasonable efforts to obtain the appraisal by that date, subject to lender timelines, appraiser availability, and other ordinary transaction conditions.
If the property appraises at or above the required appraisal value stated above, this contingency shall be deemed satisfied and the transaction shall continue under the purchase agreement.
If the property appraises below the required appraisal value, the following shall apply:
☐ Buyer may terminate the agreement by written notice
☐ Buyer may request a reduction in the purchase price
☐ Buyer may elect to proceed without a price reduction
☐ Buyer may pay the difference between the appraised value and purchase price
☐ the parties shall attempt to negotiate revised terms
☐ other: [Describe]
If the parties agree to reduce the purchase price based on the appraisal, the revised purchase price shall be:
☐ the appraised value
☐ another agreed amount: [$Amount]
☐ to be determined by written amendment
If no agreement is reached within [Number] days after notice of the low appraisal, the following shall apply:
[Insert terms]
Any notice under this Addendum shall be given in writing by the party giving notice to the other party within [Number] days after receipt of the appraisal or knowledge of the appraisal result.
Notice may be given by:
☐ personal delivery
☐ broker delivery
☐ other method allowed by the purchase agreement
If the agreement is terminated under this Addendum, the earnest money shall be handled as follows:
☐ returned to Buyer
☐ released according to the purchase agreement
☐ other: [Describe]
If the Buyer chooses to proceed despite a low appraisal, the Buyer shall notify the Seller in writing by [Date].
Unless otherwise agreed in writing, the Buyer’s election to proceed shall mean the appraisal contingency is waived for the transaction.
This Addendum contains the full understanding of the parties regarding appraisal contingency terms for the property described above and replaces prior discussions on that subject unless otherwise stated in writing.
Buyer Signature: __________________________
Name: [Full Name]
Date: [Date]
Seller Signature: __________________________
Name: [Full Name]
Date: [Date]
Additional Signature, if needed: __________________________
Name: [Full Name]
Date: [Date]
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For quick answers, scroll below to see the FAQ.
Frequently asked
An appraisal contingency addendum is a written addendum added to a real estate purchase agreement to address what happens if the property does not appraise at or above a stated value. It usually explains the minimum appraisal amount, whether the buyer may cancel, and whether the parties may renegotiate the purchase price or other terms. It helps create a clear plan before the appraisal is completed.
You need an appraisal contingency addendum to clearly define the parties’ rights if the appraised value comes in lower than expected. It helps reduce confusion by explaining whether the buyer may walk away, request a price reduction, pay the difference, or proceed under other agreed terms. A written addendum also helps support smoother contract review and negotiation.
Use an appraisal contingency addendum when a buyer and seller want to address appraisal risk in a real estate transaction. It is especially useful when financing depends on appraised value, the market is competitive, or the parties want written rules for what happens if the property appraises below the purchase price.
Start with the names of the buyer and seller, the property address, and the date of the original purchase agreement. Then state the required appraisal value, the deadline for obtaining the appraisal, and the options available if the appraisal is too low. Finish with notice requirements, any price adjustment terms, and signatures so the addendum is clear and easy to apply.
AI Lawyer can help by organizing the addendum into clear sections so each reviewer can find the relevant details quickly. It can also add internal reference fields, pricing notes, and placeholders that make updates easier to track. A consistent structure helps reduce repeated edits and lowers the chance of missing key details like appraisal deadlines, value thresholds, or notice periods before the addendum is signed.
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