What Is Form 22AN — Appraisal Contingency Notice in Washington Real Estate?
Form 22AN is the Appraisal Contingency Notice used in Washington real estate transactions when a buyer responds to the results of an appraisal during the appraisal contingency period.
When a buyer is financing the purchase of a home, the lender typically requires an appraisal to confirm the property value supports the loan amount.
If the appraisal comes in lower than the purchase price, the buyer may need to respond using Form 22AN.
This form allows the buyer to notify the seller of their decision and propose potential solutions.
Form 22AN is typically used alongside the Financing Contingency (Form 22A) and becomes part of the contract attached to the Purchase and Sale Agreement (Form 21).
Handling Appraisal Responses with Forms 22AWO & 22AN Video
Why the Appraisal Contingency Exists
An appraisal protects both the buyer and the lender by confirming the property value.
If the appraised value is lower than the agreed purchase price, the lender may not approve the full loan amount needed to complete the transaction.
This creates a potential gap between:
- the purchase price
- the appraised value
- the loan amount the lender will approve
The appraisal contingency allows buyers to address this situation.
When Form 22AN Is Used
Form 22AN is typically used when the appraisal does not support the purchase price.
Common scenarios include:
Low appraisal
The appraised value is lower than the contract price.
Request for price adjustment
The buyer may request that the seller reduce the purchase price.
Buyer paying the difference
The buyer may agree to increase their down payment to cover the difference.
Negotiation between parties
The buyer and seller may negotiate a compromise to keep the transaction moving forward.
How Buyers Respond to a Low Appraisal
When a low appraisal occurs, buyers generally have several options.
Possible responses may include:
- asking the seller to reduce the purchase price
- increasing the down payment to cover the difference
- negotiating a split of the difference
- terminating the contract if allowed by the contingency
Form 22AN provides the written notice that documents the buyer’s response.
How Form 22AN Relates to Appraisal Gap Addendums
In competitive markets like Seattle and Snohomish County, buyers sometimes include an appraisal gap guarantee using Form 22AD — Increased Down Payment Addendum.
This addendum states that the buyer agrees to bring additional funds if the appraisal comes in low.
When Form 22AD is used, the buyer may still use Form 22AN to formally respond to the appraisal results.
Why Form 22AN Matters in Washington Real Estate
Low appraisals are one of the most common issues that can delay or derail a real estate transaction.
Form 22AN provides a clear process for communicating appraisal-related decisions between the buyer and seller.
Understanding how appraisal notices work helps buyers and sellers navigate valuation issues without unnecessary confusion during the transaction.
You can explore the full library of Washington real estate process explanations here.
Bottom Line
Form 22AN is the Appraisal Contingency Notice used in Washington real estate transactions when buyers respond to appraisal results and negotiate solutions if the property appraises below the purchase price.
FAQ
What is Form 22AN in Washington real estate?
Form 22AN is the Appraisal Contingency Notice used when a buyer responds to the results of a property appraisal during a real estate transaction.
When is Form 22AN used?
It is typically used when the appraisal comes in lower than the purchase price and the buyer must decide how to proceed with the transaction.
What happens if the appraisal is lower than the purchase price?
The buyer and seller may renegotiate the price, the buyer may bring additional funds, or the buyer may terminate the contract depending on the contingency terms.
How is Form 22AN related to Form 22AD?
Form 22AD is an appraisal gap addendum where the buyer agrees to bring additional funds, while Form 22AN is used to formally respond to the appraisal results.
Does a low appraisal always cancel the transaction?
No. Buyers and sellers often negotiate solutions such as price reductions or additional down payments to keep the deal together.