What Is an Appraisal Contingency in Real Estate?

An appraisal contingency is a contract provision that can address what happens if a property’s appraised value does not meet the agreed threshold. Its protection depends on the actual wording, deadlines and required notices.

Appraisal and inspection serve different purposes

An appraisal estimates value for financing and may address program-specific property requirements. A home inspection evaluates condition within its scope. Neither is a guarantee of the sale price or the absence of defects. Some loans permit alternative valuation processes, so ask what your lender requires.

If value is below the purchase price

Discuss the impact on the loan amount and required cash with your mortgage professional. Possible options may include renegotiating price, bringing additional acceptable funds or using rights provided by the contract. None is automatic. A financing contingency and an appraisal contingency can provide different protections.

Understand waivers and deadlines

Waiving a contingency can increase financial exposure and risk to earnest money. Do not assume you can cancel without penalty or recover a deposit merely because financing or valuation is unfavorable. Ask your real estate professional or attorney to explain the agreement and comply with notice deadlines before relying on a remedy.

Plan your next step

For a purchase or refinance in Oregon or Washington, contact Platinum Lending Solutions to discuss your goals, documentation and available financing options. Eligibility, rates, costs and terms depend on your circumstances and lender requirements.

Related guidance: First-time homebuyer financing.

Content reviewed October 10, 2026. Stacy Schlesinger | NMLS #252075.