In the world of residential real estate transactions, the inspection contingency plays a pivotal role in ensuring both buyer and seller are protected throughout the process. Essentially, the inspection contingency allows the buyer to thoroughly inspect the property before finalizing the deal. This crucial step helps uncover any hidden issues or defects that may not be visible during a standard walkthrough.

The Inspection Contingency Clause

When a buyer makes an offer on a property, they typically include an inspection contingency clause in the contract. This contingency gives them a specified period, usually around 10 to 14 days, to conduct various inspections on the property, such as a general home inspection, pest inspection, radon testing, septic systems, underground storage tanks (UST) or any other specific inspections they deem necessary. This time frame can generally be extended if more time is needed to obtain all the necessary inspections and reports. If any significant issues are discovered during this time, the buyer has the option to negotiate repairs with the seller, request a credit for the repairs, or even withdraw from the deal altogether without breaching the contract..

Inspection Results Require Careful Negotiations

For sellers, the inspection contingency can be nerve-wracking as it introduces a level of uncertainty into the transaction. However, it's also an opportunity for them to address any issues upfront, potentially avoiding last-minute negotiations or deal cancellations. It is best for both sellers and buyers to deal with inspection issues as early as possible in the transaction.

Inspection Contingency Clause Protects Buyers and Sellers

Overall, the inspection contingency serves as a vital protection mechanism for both parties involved in a residential real estate transaction. It allows buyers to make informed decisions about their purchase and ensures sellers are transparent about the condition of the property. It also educates the parties as to the condition of the home thereby affording the parties an opportunity to adjust the purchase price accordingly. Buyers are helped because repairs issues are addressed, and sellers are helped since they can refuse to make the repairs and terminate the transaction if the cost of doing so is exorbitant.