An appraisal contingency is a clause in a real estate contract that allows a buyer to back out of the agreement if the property is appraised for less than the purchase price. This provision protects buyers by ensuring that they are not obligated to proceed with a purchase that exceeds the property's market value. If the appraisal comes in low, the buyer can negotiate repairs or price adjustments, or ultimately decide not to move forward with the deal.
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