A buyer in Clovis enters into a C.A.R. RPA to purchase a home for $475,000. The buyer's lender requires the property to appraise at or above the purchase price. The appraisal comes in at $475,000. Under the C.A.R. RPA, what is the status of the appraisal contingency?
Correct Answer
A) The contingency is satisfied and the buyer should remove it using the CR form
The appraisal contingency under the C.A.R. RPA protects the buyer if the appraised value is less than the purchase price. Since the appraisal came in at $475,000, which equals the purchase price, the contingency condition is satisfied. The buyer should remove the appraisal contingency using the CR form to proceed with the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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