FACTS: The buyer and seller executed an Arizona REALTORS® Residential Resale Real Estate Purchase Contract.  The buyer received notice that the appraisal came in $10,000 under the contract purchase price. The buyer is appealing this appraised value but it will take more than five (5) days to get the results. 

ISSUE: Does the buyer have five (5) days after receipt of the initial appraisal or the results of the appeal to cancel under the appraisal contingency?

ANSWER: See Discussion.

DISCUSSION:

The appraisal contingency provides as follows:

Appraisal Contingency: Buyer’s obligation to complete this sale is contingent upon an appraisal of the Premises acceptable to lender for at least the purchase price. If the Premises fails to appraise for the purchase price in any appraisal required by lender, Buyer has five (5) days after notice of the appraised value to cancel this Contract and receive a refund of the Earnest Money or the appraisal contingency shall be waived, unless otherwise prohibited by federal law.

The contract addresses “notice of the appraised value,” not an appeal.  Accordingly, the cancellation period will expire five (5) days after the buyer’s receipt of the appraisal. 

Note: The buyer may contact the seller in an attempt to extend the appraisal contingency period by way of an addendum.