 TITLE: What Happens if a Home Appraisal Comes In Low? CONTENT: How an Appraisal Contingency Protects You\n-----------------------------------------\nAn appraisal contingency is a clause in the offer letter or sales contract that allows you to withdraw your purchase offer in light of the appraisal results. In locations where earnest money otherwise may be forfeited for withdrawal of a purchase offer, an appraisal contingency can protect you from the loss of those funds.\nAppraisal contingencies are fairly standard buyer-protection measures, common in boilerplate real estate contract language. In today's highly competitive real estate climate, some buyers are explicitly waiving appraisal contingencies as a tactic to make their offers more attractive to sellers. This approach can make an offer stand out among multiple bids, but it's risky unless you are certain you have the cash on hand to make up any difference between the property's appraised value and your offer price.\nA lender's appraisal can come back below your purchase offer for lots of reasons, so it pays to anticipate that possibility and its implications, and to respond in a way that protects your money and your plans for buying your next home.\nAs you prepare to buy a home, and throughout the mortgage application and approval process, it's important to keep a close eye on your credit. Experian's free credit monitoring can help you spot issues and take care of them before they cause you trouble. END