A buyer is under contract to purchase a property for $650,000 using a C.A.R. RPA with an active appraisal contingency. The property appraises at $620,000. The seller declines to reduce the purchase price. The buyer wants to proceed with the purchase at $650,000. What is the buyer's required next step under the C.A.R. RPA?
Correct Answer
A) Remove the appraisal contingency using the CR form and proceed at the $650,000 purchase price, covering the $30,000 gap out of pocket
Under the C.A.R. RPA, if the buyer chooses to proceed despite an appraisal below the purchase price, the buyer must actively remove the appraisal contingency using the Contingency Removal (CR) form. This signals the buyer's informed decision to accept the appraisal gap and cover the $30,000 difference between the appraised value ($620,000) and the contract price ($650,000) with additional out-of-pocket funds. The original contract remains in full force.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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