What allows buyers to choose whether to continue with a purchase when a property isn't valued at the purchase price?

The appraisal contingency notice is a critical component of real estate transactions that serves to protect buyers. When a buyer makes an offer on a property that is later appraised for less than the agreed-upon purchase price, this notice allows the buyer to reassess their commitment to the transaction. Specifically, it grants the buyer the opportunity to either move forward with the purchase under new terms, negotiate with the seller for a price reduction, or withdraw from the deal altogether without losing their earnest money. This ensures that buyers are not locked into a purchase that exceeds the market value of the property, thereby enhancing their financial security and confidence in the transaction.

In contrast, other options such as the BINSR (Buyer Inspection Notice and Seller Response) primarily address issues related to property inspections, while the listing contract is focused on the agreement between the seller and their agent regarding the sale of the property. The pre-qualification form serves to assess the buyer's financial ability to purchase but does not provide options related to appraisal outcomes.