A Guide to The Home Inspection Contingency

In a competitive housing market, you may be tempted to skip a home inspection so your offer looks more favorable to the sellers. Before you waive the inspection, let's walk through some of the details together. We’ll discuss ways the home inspection contingency can be used and how it can protect your best interests.

What Is The Home Inspection Contingency?

A home inspection contingency mandates that the offer is contingent on the result of the home inspection. An inspection contingency allows the homeowner a specific number of days (typically 7 – 10), to respond with any objections to what’s found in the inspection. This ensures the buyer is able to collect enough information to make an informed purchase decision.

Home inspection contingency rules vary by local and state laws. Be sure to discuss your home buying strategy with your lender and real estate professional. Make sure you’re complying with all of the requirements and guidelines necessary to follow through with the home purchase. Ultimately you as a buyer must pay close attention to what is spelled out in the purchase agreement.

Contingent offers protect buyers when common problems arise. These problems can be big enough to dissuade a buyer from following through on the purchase of a home or can lead to a renegotiation of the contract. In some instances, the buyers can choose to walk away with their earnest money.

How Does The Inspection Contingency Work?

An inspection contingency, also called a “due diligence contingency,” gives the buyer the right to have the home inspected in a specified time period. Depending on the findings of the home inspection, the potential home buyer can negotiate repairs or they can cancel the contract.

A good inspection contingency should outline what happens when the buyer does wish to raise issues and lay out the amount of time a buyer has to get the inspection. Typical contingency clauses will give sellers a certain number of days from the time the request is given to agree to make repairs or lower the sales price in compensation.

What Does The Home Inspection Cover?

A standard home inspection will review the home’s structure, appliances and major systems to document their condition. This includes inspecting the foundation, roof and attic, major appliances, electrical, plumbing and HVAC systems.

On average, a home inspection will take 2 – 4 hours to complete. As the buyer, it’s a good idea to be present during the home inspection. This is a great opportunity to ask questions about the home.

The inspection report will include the inspector's professional opinion of the condition of the home with photos and recommendations. Most inspection reports will include the following:

• The status of each problem they noted: Safety issues, major defect or minor defect.
• Recommended replacement or service for appliances and systems.
• Any recommended repairs and upgrades that need immediate attention or routine maintenance.

We’ve pulled together the following list based on home inspection checklists for buyers that will give you a bird’s eye view of what to expect.

Exterior Inspection

An inspector will inspect the full exterior of the structure. This includes crawlspaces, attics, additions, etc. The following areas of focus will likely be on your inspector’s to-do list as well:

• Walls: Exterior wall construction reveals a lot about the foundation and interior. An inspector will look for damaged or missing siding. Inspect cracks and suspected settling. The inspector will check the soil around the home to ensure there are no major leaks or pests present.
• Foundation: The inspector will likely walk around the building to look for areas that might have dips in the soil, poor grading, etc. If the foundation isn’t visible, the inspector will evaluate any secondary evidence of foundation issues. An experienced inspector will look for cracks and separations and recommend a course of action.
• Roof: Loose, missing shingles, poorly installed shingles, cracked and damaged vents and pipes are all ways water can enter the home without warning. The home inspector will note any areas that may be prime targets for water intrusion.
• Garage: The home inspector will test the garage door to ensure it operates. They will note any noises, check the framing if visible to ensure proper sealing to deter pest and water intrusion, and look for proper ventilation to prevent accidental carbon monoxide poisoning.
• Grading: The inspector will do their best to determine if the grading slopes away from the home as it should. If the home has settled and needs regrading, an inspector's keen eye could prevent major issues as the home ages.

Interior Inspection

The interior inspection will include everything in the interior of the home from the electrical system to the water pressure in the sinks. Below is a short list of what your inspector might be looking for:

• Electrical systems: The inspector will begin by identifying the kind of wiring present throughout the home. They will test the outlets and ensure there are functional ground fault circuit interrupters installed in the bathrooms, kitchen and
• HVAC system: The inspector will identify the type, size and age of the furnace and air conditioner in the home. Next, they will determine if they work properly and look for a record of service. The inspector will inspect the ductwork as best they can to see if there are areas that could have potential leaks or a lot of debris blocking airflow.
• Plumbing: The inspector will begin by identifying the type of pipes used in the home. They will check the water pressure in all faucets and showers. They will also check under sinks and in cabinets to note any slow leaks or potential plumbing issues. Be sure to ask your inspector where all of the water shut-offs are located should you ever need the water turned off in an emergency.
• Fire safety: The inspector will check all smoke and carbon monoxide detectors to ensure they’re in good working order. If there is an attached garage, the inspector will take note that the wall connected to the garage is in good condition and its fire rating hasn’t been compromised.
• Bathrooms: Inspectors are looking for visible leaks, properly secured toilets and adequate ventilation. Because bathrooms can become damp and wet, ventilation is vital in keeping mold and mildew at bay.
• Laundry room ventilation: In the laundry room, the inspector is going to ensure the dryer exhaust system is properly vented and free of debris.
• Water heater: The inspector will identify the water heater’s age and condition and estimate how soon it could need to be replaced.
• Appliances: Many home inspectors won’t test things like a coffee machine or an air fryer but they will want to ensure the dishwasher runs and the stove gets hot.

How To Manage The Results Of The Home Inspection

Home buyers and sellers have several options for action once they receive the results of the home inspection. Let’s discuss the different scenarios that may arise and how they can affect your purchase contract negotiations.

Result: No Major Issues

This is the ideal scenario for any prospective buyer, signaling that the property is in good shape and likely doesn’t have any significant pr