The Arizona Residential Resale Purchase Contract includes verbiage commonly known as the "appraisal contingency". Simply put, this contingency says that if a home doesn't appraise for the purchase price the buyer may cancel the contract and have their earnest money returned in full.
The buyer doesn't have to cancel the contract if the home doesn't appraise. The buyer and seller can renegotiate the purchase price, or the buyer can provide additional cash to make up for the difference. If however, neither of these are possible, the buyer can cancel the contract with no detrimental effects.
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