Making an offer on a home? You are really excited, you have found the home that fits your needs and your budget. Your real estate agent gave you a report on the home values of the surrounding properties. You have reviewed the report and, looked online at other home reporting sites and checked the numbers. You feel you have offered the right price. To add to your level of comfort regarding the price you are offering for your future home, you ask your agent to add an Appraisal Contingency to your offer.
In the state of Georgia an Appraisal Contingency gives the buyer certain rights based on the results of the appraisal. When the appraisal is completed and found to be less than the purchase price of the property, the buyer has the right to request the seller to reduce the sales price in accordance with the appraisal. The buyer must submit his written request to the seller using the following document: “Amendment to Reduce Sales Price,” and must attach a copy of the appraisal to the amendment. The buyer indicates on the amendment the amount of time the seller has to respond to his request. If the seller, within the time limits accepts the requested price reduction, than the buyer is obligated to purchase the property. However, if the seller refuses to accept the price reduction, the buyer has the right to terminate the agreement without penalty. The buyer must submit this termination notice to the seller in writing.
Once the buyer has submitted his/her termination letter, there are no further obligations by either party regarding the transaction.