With today’s competitive market moving faster than ever, it can be easy to fall in love with a home too fast or cut corners in favor of a better offer. Our advice? Don’t. Before you close the deal, make sure everything is in check – and especially be aware of your home inspection contingency clause.
There are many variables and clauses included with your purchase agreement, but one of the most critical is the home inspection contingency clause. In this article, we’ll cover what inspection contingency is, the risks involved with not having it, how to properly schedule a home inspection and more.
What is a Home Inspection Contingency Clause?
An inspection contingency clause is a common provision in real estate contracts that allows the buyer to have a property inspected by a licensed professional. If the inspection reveals any issues with the property, the buyer can then negotiate with the seller to have those issues addressed before the sale is finalized. This clause is essential for buyers because if utilized properly, it ensures they are getting a house in good condition and free from significant problems.
In most cases, the inspection contingency clause will set a due date for a home inspection to be performed; after the contingency window, however, the buyer will be on the hook for any repairs or consequences associated with backing out of the deal.
During the contingency window, the buyer can more easily back out of the contract if the inspection reveals any major or unacceptable issues. This is why even in the most competitive markets, getting a home inspection within the clause timeframe is always the right choice.
Inspection Contingency Clause Benefits
• Allows buyers to have the property inspected by a professional inspector
• Gives buyers the opportunity to identify and address any issues with the property before the sale is finalized
• Allows buyers to back out of the contract if the inspection reveals any major issues with the property that the buyer is unwilling to accept
• Provides buyers with the peace of mind that they are getting a property that is in good condition
• Helps protect buyers from any potential financial losses due to unforeseen issues with the property
Risks of Not Having an Inspection Contingency Clause
Not having an inspection contingency clause in a real estate contract can be a risky move. Without this clause, buyers are essentially agreeing to purchase a property without knowing its full condition. This could lead to costly repairs or renovations that the buyer was not expecting and may not have the money to afford. Additionally, the buyer may not be able to back out of the purchase if they find out that the property is in worse condition than they thought. This could leave them stuck in a contract for a property that they are not happy with.
For these reasons, it is important for buyers to ensure that an inspection contingency clause is included in their real estate purchase contract. It will help protect them from any potential financial losses due to unforeseen issues with the property and provide them with peace of mind that they are getting a property that is in good condition.
Work with one of Total Mortgage’s loan experts today to ensure an inspection is included in your home search.
How long does an inspection contingency clause typically last?
An inspection contingency clause typically lasts for a period of 10 to 14 days. This clause allows the buyer to inspect the property and decide if they want to proceed with the purchase. During this time, the buyer can request repairs or renegotiate the purchase price. If the buyer is not satisfied with the inspection, they can back out of the deal without any penalty.
How to Schedule a Home Inspection
With an inspection contingency clause in place, it’s important to better understand the home inspection process itself. Scheduling an inspection is a critical step in the home-buying process and should be done with a qualified and experienced inspector. Here are some tips for scheduling a home inspection:
- Research home inspectors in your area. Look for an inspector who is certified and experienced in the type of home you are buying.
- Contact the inspector to discuss their qualifications and fees. Ask for references and check them out.
- Schedule the inspection as soon as possible. The sooner you can get the inspection done, the sooner you can make an informed decision about the property within the contingency time frame.
- Make sure to attend the inspection. This will give you the opportunity to ask questions and get a better understanding of the condition of the property.
- Follow up with the inspector after the inspection. Ask for a detailed inspection report and make sure to understand any issues that were identified.
By following these steps, you can ensure that you are getting an accurate home inspection and take your results to the negotiations. This will help you make an informed decision about the property and protect you from any potential financial losses due to unforeseen issues.
Other Types of Real Estate Contingencies
- Financing Contingency: This clause allows the buyer to back out of the contract if they are unable to secure financing for the purchase.
- Appraisal Contingency: This clause protects the buyer from overpaying for the property by allowing them to back out of the contract if the appraisal comes in lower than the purchase price.
- Title Contingency: This clause protects the buyer from any potential title issues that may arise during the purchase process.
- Homeowner’s Association Contingency: This clause allows the buyer to back out of the contract if they are not satisfied with the terms of the Homeowner’s Association.
- Sale of Buyer’s Home Contingency: This clause allows the buyer to back out of the contract if they are unable to sell their current home.
- Lead Paint Contingency: This clause allows the buyer to back out of the contract if lead paint is found in the home.
- Zoning Contingency: This clause allows the buyer to back out of the contract if the property does not meet local zoning regulations.
- Environmental Contingency: This clause allows the buyer to back out of the contract if any hazardous materials are found on the property.
Getting Started With Total Mortgage
Working with Total Mortgage is a great way to make sure you get the best possible deal when buying a home. With competitive rates, flexible repayment plans, and experienced loan officers, we are happy to help anyone looking to secure a mortgage. Plus, we can ensure that a proper home inspection is performed – an essential if your contract includes an inspection contingency clause.
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