Real Estate Contracts
What Is a Home Inspection Contingency?
A home inspection contingency gives the buyer the right to have the property professionally inspected within a specified time period and to negotiate repairs, credits, or to walk away if the inspection reveals unacceptable conditions — with their earnest money returned.
Inspection contingencies are one of the most common contract clauses and a frequent topic on real estate licensing exams.
How Inspection Contingencies Work
Inspection Period
The contingency specifies a deadline — typically 7–15 days from contract acceptance — during which the buyer must complete inspections. If the buyer doesn't act within this window, the contingency expires and the contract proceeds as-is.
Buyer's Options After Inspection
Accept the property as-is, request repairs or a price reduction via addendum, or terminate the contract and recover their earnest money. The seller can accept the requests, counter, or reject — if they reject, the buyer must decide to proceed or terminate.
Types of Inspections
General home inspection, pest/termite inspection, radon inspection, mold inspection, sewer scope, roof certification. Buyers can order multiple specialized inspections during the contingency period. Who pays for inspections varies by contract and local custom.
Waiving the Contingency
In competitive markets, buyers sometimes waive inspection contingencies to strengthen their offer. This is legal but risky — the buyer accepts the property in whatever condition it's in, with no ability to request repairs or exit without losing earnest money.
Exam Key Points: Inspection Contingency
Inspection contingency protects the buyer's earnest money if the property has unacceptable defects
Buyer must act within the specified inspection period — deadlines are strictly enforced
Seller is not required to make repairs — they can reject buyer requests
If seller rejects and buyer doesn't want to proceed, buyer can terminate and recover earnest money
Waiving the contingency is legal but removes all inspection-based protections
The inspection report belongs to the buyer — the inspector's duty is to the buyer
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