Home Inspection Contingency: What You Need to Know
This article discusses the importance of a home inspection contingency when going through the home buying process. It provides information on the types of issues that could arise and details any contingencies you should put in place. Get informed & protect your investment!
What is a Home Inspection Contingency?
A Home Inspection Contingency is a clause in a real estate purchase and sale agreement, also known as a purchase agreement, that outlines the buyer's right to have a professional home inspection conducted. This inspection provides the buyer with information about the condition of the home and any needed repairs or improvements. The contingency will be in the form of a clause, which states the buyer can back out of the purchase agreement after the inspection if he or she does not agree with the terms.
Why is this important?
The home inspection contingency is essential to a real estate purchase. It is the buyer's right to investigate the condition of a home before purchase and seek either repairs or a decreased purchase price. As such, it is a critical element for buyers to consider when negotiating a purchase agreement.
What to Look for in a Home Inspection Contingency
When reviewing a home inspection contingency, consider the following:
- Does the clause specify a maximum price limit the buyer is willing to pay?
- Does the clause specify a timeline for the inspection to be conducted?
- Does the clause specify the types of inspections required?
What Happens After the Home Inspection?
After the home inspection has been conducted, the buyer will receive a report with information about the condition of the home and any potential issues. The buyer and seller will then review the findings and either negotiate a reduced price or the seller will make necessary repairs. The sellers typically have a deadline for the buyer to respond with an acceptance or rejection of the purchase agreement as amended by the home inspection.
Conclusion
The home inspection contingency is essential for buyers looking to purchase a home as it provides valuable information about the condition of the home and protects their interests. It is important for buyers to be familiar with the scope and details of the contingency before signing a purchase agreement so they can make an informed decision.