Navigating the homebuying process can be a rollercoaster of emotions and paperwork, and one of the most critical moments comes during the inspection phase. In this post, we’ll explore what it means when a house sale is contingent on an inspection, break down the potential challenges and benefits, and offer expert tips on how to negotiate repairs or price adjustments. Whether you’re a first-time homebuyer or a seasoned investor, understanding these contingencies is key to making informed decisions and securing a deal that truly works for you.
How Inspection Contingencies Protect Homebuyers
When browsing home listings, you may have come across properties marked as contingent. But what does contingent mean when selling a house? In real estate, a contingency is a condition that must be met before a sale can be finalized. One of the most common and vital real estate contingencies is the home inspection contingency, which allows buyers to assess a property’s condition before fully committing to the purchase.
A house sale contingent on inspection means the buyer has the right to conduct a new home inspection and decide how to proceed based on the findings. This could involve requesting repairs, renegotiating the price, or walking away from the deal without penalty if major issues arise. The inspection contingency clause within the real estate contract outlines these rights and ensures that the buyer has a clear time frame to complete the inspection and take action.
Typically, the real estate contingency period lasts between 7 to 14 days, though this varies based on the purchase contract and local market conditions. During this period, the buyer (or their real estate agent) hires a home inspector to perform a detailed evaluation of the property. If significant defects are found, the buyer and seller may negotiate repairs or a price adjustment. In extreme cases, the buyer can choose to exit the deal while keeping their earnest money deposit – so long as it is within the predefined contingency period.
Importance of a Home Inspection Contingency
A home inspection contingency safeguards buyers from unforeseen structural, safety, or maintenance concerns. Without this clause, buyers would be legally obligated to move forward with the purchase, even if significant defects are discovered. Common ways buyers can proceed after an inspection include:
- Requesting repairs from the seller
- Renegotiating the sale price
- Proceeding with the purchase as-is
- Walking away from the deal without penalty
Important Note: Sometimes, a home seller will complete an inspection before listing the property and include the report in the seller disclosures provided to potential buyers before any offers are submitted. Your real estate agent will be able to tell if a home has a home inspection available in its property disclosures.
Seller’s Disclosure Obligations
Sellers must provide a seller’s disclosure outlining known defects with the property. However, disclosure requirements vary by state, and not all issues are always included. Reviewing official guidelines can help buyers understand what sellers are legally required to disclose.
Despite these disclosures, hidden or unknown issues may still exist, which is why a home inspection remains essential. Even if a home appears well-maintained, underlying problems could go unnoticed, making a thorough inspection a crucial step in the home-buying process.
Key Items in a Home Inspection Checklist
A comprehensive home inspection checklist covers:
- Structural integrity: Foundation, roof, walls
- Systems: Electrical, plumbing, HVAC
- Safety hazards: Mold, pests, water damage
- Appliances and fixtures
The inspection helps identify issues that may require repairs or influence negotiations.
Common Home Inspection Issues Buyers Should Know
During a home inspection, the most frequently discovered problems include:
- Roof damage or leaks – Missing shingles, leaks, or aging materials
- Foundation cracks – Structural concerns that could lead to costly repairs
- Plumbing leaks – Water damage and mold risks
- Electrical hazards – Outdated wiring or overloaded circuits
- HVAC system failures – Inefficient heating and cooling systems
- Mold or water damage – Affects indoor air quality and health
- Pest infestations – Termites, rodents, or other destructive pests
Some issues are minor and negotiable, while others may cause buyers to reconsider their purchase.
How To Negotiate After A Home Inspection
Once the home inspection is complete, the next step is deciding how to move forward. Buyers have several options when negotiating after a home inspection, depending on the severity of the issues found.
Reviewing the Inspection Report
Start by going through the inspection report carefully. Not all findings require action—some may be minor cosmetic concerns, while others could be costly structural repairs. Focus on major defects that affect the home’s safety, function, or value.
Prioritizing Repairs
Buyers should differentiate between necessary repairs (e.g., faulty electrical wiring, plumbing leaks, or a damaged roof) and minor concerns (e.g., peeling paint or outdated fixtures). Sellers are more likely to negotiate on issues that impact the home’s livability.
Requesting Seller Concessions
If significant repairs are needed, buyers can negotiate in several ways:
- Asking the seller to fix the issues before closing.
- Requesting a credit toward closing costs to cover future repairs.
- Negotiating a price reduction to reflect the home’s condition.
When to Walk Away
If the inspection uncovers major structural issues or costly repairs that the seller refuses to address, walking away may be the best option. A home inspection contingency allows buyers to exit the deal without losing their earnest money deposit if the property requires more work than they’re willing to take on.
Negotiating after a home inspection is all about finding a fair solution that works for both the buyer and seller. Being informed and strategic can help buyers secure a home that meets their needs while avoiding unexpected repair costs.
What Happens If a Buyer Waives Inspection Contingencies?
In competitive real estate markets, some buyers opt to waive inspection contingencies to make their offers more attractive. While this tactic can give buyers an edge, it exposes them to potential risks. Without an inspection contingency clause, the buyer assumes responsibility for any post-sale issues, including costly repairs. If the home has major defects, waiving this contingency could lead to unexpected financial burdens.
Other Essential Real Estate Contingencies
Aside from inspection contingencies, homebuyers should be aware of other vital real estate contingencies that impact a transaction:
- Financing contingency – Allows buyers to back out if they cannot secure a mortgage
- Title contingency – Ensures a clear property title with no ownership disputes
- Appraisal contingency – Protects the buyer if the property’s appraised value is lower than the agreed purchase price
Each contingency is designed to protect the buyer and ensure a fair and transparent real estate transaction.
Frequently Asked Questions
What’s the difference between contingent vs. pending?
Understanding the difference between contingent vs. pending helps buyers navigate the market more effectively:
- Contingent: The home is under contract, but certain real estate contingencies (like the inspection contingency clause) must be met before proceeding.
- Pending: All contingencies have been satisfied, and the home is in the final stages before closing.
A contingent listing may still return to the market if the conditions are not met.
Can a seller refuse to make repairs after a home inspection?
Yes, sellers can decline to make repairs, but this may allow the buyer to renegotiate or terminate the contract.
Does a home inspection impact financing?
A standard home inspection does not affect financing, but significant defects could create challenges during the lender’s appraisal process.
Can a seller back out of a contingent home sale?
Yes, sellers can sometimes back out, particularly if a kick-out clause is included in the contract. A kick-out clause allows the seller to continue accepting offers while the buyer works through contingencies. If a better offer comes in and the buyer cannot meet the seller’s conditions within the agreed time frame, the seller may legally back out of the sale.
How long does a home inspection take?
A professional home inspection typically lasts 2 to 4 hours, depending on the size and condition of the property.
Your Next Steps
Ensuring a smooth homebuying experience means being prepared for every step of the process—including inspection contingencies that protect you from unexpected issues. At JVM Lending, we’re here to help you navigate these important details and secure the financing you need.
Ready to take the next step? Contact us today and let our expert team guide you toward a worry-free home purchase.
