My Life as a San Francisco Realtor: The Appraisal is NOT a Contingency

The Appraisal is NOT a Contingency

The Appraisal is NOT a Contingency

I showed my client a nice little house in El Sobrante over the weekend. She liked it and we made an offer.

Today I hear back that there are, of course, multiple offers and the seller wants our highest and best. Nothing new. these days!

But this is where it gets interesting. The Appraisal is NOT ALLOWED to be a Contingency

Seller will require buyer to purchase property at agreed to accepted offer price, they will not lower the price if the appraisal is less than the accepted offer. The buyer must have the funds to make up the difference.

Please provide verification of funds. 


John M Scott, Broker / Owner, Scott Keys Properties, Certified Distressed Property Expert (CDPE), Council of Real Estate Brokerage Managers (CRB), serving San Francisco and the surrounding San Francisco Bay Area

Comment balloon 9 commentsJohn M. Scott • June 19 2012 06:50PM


Sounds like the Seller is VERY concerned about an appraisal. We had a similar situation this week with a demand to eliminate the inspection contingency. It turned out to be a mobile home (converted to look like a Santa Fe style home) without any disclosure.

Posted by Emily Medvec Qualifying Broker, Realtor | Serving Santa Fe & Northern NM (Hello Realty Partners) over 6 years ago


This actually makes sense to me. A high offer that doesn't appraise, and gets renegotiated, makes little sense.


Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 6 years ago

The seller may be shooting himself in the foot and actually cause the bids to stay lower.

Posted by Alan Grizzle, Full Time Realtor, Lifelong Resident of Dahlonega (Chestatee Real Estate) over 6 years ago

If the buyer is getting a loan, the bank will send out an appraiser to evaluate the property.  The bank will not let the buyer pay more than it's worth.  If the seller doesn't want the appraisal to be a factor, they need a cash buyer.


Posted by Deborah Wilson, Stark County OH Real Estate (Hackenberg Realty Group) over 6 years ago

John:  Perhaps they will have to short sale if being forced to sell at appraised value.  I've seen this in my area also!  I've had two buyers in the last 6 months pay slightly over appraised value due to there being a no appraisal contingency clause.

Posted by Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula, Realty Works Temecula (Realty Works Temecula) over 6 years ago

It certainly does not surprise me in the Bay Area market. If they do not "go for it" they lose out (because someone else will) but if they do they are exposed. I've heard of a few of these lately and the one good thing is that it is setting higher comparables. It is a very emotional and tough decision for buyers who have to face this.

Posted by Doug Anderson, Bay Area Real Estate Views (Tucker Associates Real Estate Services) over 6 years ago

Doesn't make much sense to me to pay more for a house than what it appraises for..............but what do I know!

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 6 years ago

This happens. The buyer just needs to decide if they really want the house and what they are realistically willing to pay for it. I've written offers for houses $20,000. + over list before because buyer loved the property. We coul see it was undervalued, and the buyers had cash in the bank to make up for an appraisal that came in lower than our offer. #4. The bank can't tell a buyer that they can't buy a house for more than what it's worth. The banks will lend the buyer the appaised value, and buyer has to contribute the difference if they want to buy.

Posted by Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA) over 6 years ago

This is typical in my market!

Posted by JM Padron, CCIM, MRICS, CCIM, MRICS, Serving South Florida (INTERNATIONAL COMMERCIAL ASSOCIATES) over 6 years ago