In Arizona real estate contracts, what is the primary purpose of an appraisal contingency?
Correct Answer
D) To protect the buyer if the property doesn't appraise for the contract price
Correct: D - To protect the buyer if the property doesn't appraise for the contract price. An appraisal contingency protects the buyer from overpaying by allowing contract termination if the property appraises below the purchase price. Why not A: This option is incorrect because "To confirm the property meets zoning requirements" does not match the rule tested by the question. The correct answer is "To protect the buyer if the property doesn't appraise for the contract price". An appraisal contingency protects the buyer from overpaying by allowing contract termination if the property appraises below the purchase price. Why not B: This option is incorrect because "To ensure the property taxes are current" does not match the rule tested by the question. The correct answer is "To protect the buyer if the property doesn't appraise for the contract price". An appraisal contingency protects the buyer from overpaying by allowing contract termination if the property appraises below the purchase price. Why not C: This option is incorrect because "To verify the seller's ownership of the property" does not match the rule tested by the question. The correct answer is "To protect the buyer if the property doesn't appraise for the contract price". An appraisal contingency protects the buyer from overpaying by allowing contract termination if the property appraises below the purchase price.
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Related Topics & Key Terms
Key Terms:
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Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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