Appraisals in a Real Estate Contract

Appraisals in a Real Estate Contract

An appraisal is a lenders way of making sure you and your agent are not idiots.

Your lender doesn’t know you, your agent or the market, so a person who is certified, the appraiser, goes out to the home and reports back to the lender that the home is worth the amount you are borrowing from the lender.

If the appraiser confirms that the property is worth the amount of money or more money than what you are borrowing from the lender – you do not have to worry or do a thing.

If the appraiser deems the home not worth what the lender is lending on the home, you have a few options:

  • Terminate the contract
  • Negotiate with the sellers to come down in price
  • Bring the difference in cash to closing – in other words, increase your downpayment amount to make up the difference between what the appraiser says the house is worth and what you are paying/borrowing for the house.

If you are in a bidding war situation, it strengthens your offer to do one of the two following things in your offer with the appraisal deadlines:

  • Waive appraisal, if you have enough cash. This means that you will have an appraisal done (because it is usually required by the lender) but that you agree to not ask for the sellers to come down in price if it doesn’t appraise at value, that you will not terminate the inspection because of the appraisal and therefore that you will bring whatever the difference is in cash to closing.
  • Put verbiage in the contract stating the you will bring X amount of money to closing to make up the difference in purchase price and appraisal value if necessary.

To learn the ins and outs of other parts of the home purchase process check out our other blogs: Backup Offers, Inspection Deadlines, What is Earnest Money, Making an Offer.

Good Good is a Boulder area real estate agency. We specialize in helping good people find the perfect Boulder home. We’re low pressure but high touch. If you are moving to Boulder or thinking about moving to Boulder and need some help with logistics or need a guide in the Boulder area, we may be a good fit. Give us a call if you’d like to chat. We’re always happy to answer any questions you have about the Boulder area or give you a tour. 


Katie (Good Good Founder) | 720.415.4914 |

1919 14th St.
Suite 700
Boulder, CO 80302

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