Buying a home is often the largest financial commitment many will make. While the visible features like fresh paint or updated kitchens are appealing, unseen problems such as roof leaks, foundation cracks, or outdated wiring can pose costly risks. This is why a home inspection contingency is vital—it serves as a protective clause allowing buyers to thoroughly evaluate the property’s condition before finalizing the sale.
How Does a Home Inspection Contingency Work?
When submitting an offer, buyers typically include contingencies—conditions that must be met for the sale to proceed. The home inspection contingency is standard and generally provides 7 to 14 days after the seller accepts the offer for the buyer to arrange a professional home inspection.
Once the inspection is complete, the buyer reviews the detailed report, which covers structural components, plumbing, electrical systems, HVAC, and more. Attending the inspection is highly recommended for buyers to better understand the property and ask questions directly.
Options Available to Buyers After the Inspection Report
The inspection report is not a pass/fail review but a thorough condition assessment, helping buyers decide their next steps:
| Option | Description | Ideal When |
|---|---|---|
| Proceed with Sale | Accept the house as-is and continue with the purchase. | Only minor, cosmetic repairs needed. |
| Request Repairs | Ask the seller to fix specific problems before closing. | Issues are significant but repairable. |
| Request Seller Credits | Seek a closing credit to fund repairs independently. | Prefer managing repairs personally. |
| Renegotiate Price | Ask for a price reduction to cover repair costs. | Expensive repairs like roof replacement needed. |
| Cancel the Contract | Walk away and recover earnest money if deal-breakers exist. | Serious safety or structural problems found. |
Sellers are not required to agree to repair requests or credits. If they refuse, buyers may use the contingency to cancel the contract without penalty.
Risks of Waiving the Home Inspection Contingency
In competitive markets, buyers might waive this contingency to make their offer stand out. However, this exposes the buyer to purchasing the home “as-is” with no ability to renegotiate or exit based on inspection results. Hidden defects could lead to costly repairs and financial strain. Experts generally advise against waiving this contingency to protect your investment.
Common Questions About Home Inspection Contingencies
Who pays for the inspection? The buyer typically hires and pays for the home inspection, which usually costs between $300 and $600 depending on various factors.
How is a home inspection different from an appraisal? A home inspection evaluates the condition of the property for the buyer’s benefit, while an appraisal assesses market value primarily for the lender’s protection.
What if the seller refuses repairs? The buyer can accept the home “as-is” or invoke the contingency to cancel the deal and get the earnest money refunded.
For more information on related contract protections, see our Mortgage Contingency and Appraisal Contingency articles.
Sources:
- Consumer Financial Protection Bureau, What is a home inspection contingency? CFPB.gov
- Investopedia, Home Inspection Contingency: Should You Waive It? (2023)
- NerdWallet, What Is a Home Inspection Contingency and How Does It Work? (2024)