Max. Rate: 12% p.a.
incl Cedi Mortgages
Repayment Period
Up to 30 years
No Upfront Fees
T&Cs Apply

Inspection Contingency

In a competitive housing market, you can get caught up in the excitement of finally finding the house that’s right for you. After all, deals are often based on good faith. You may be tempted to skip a home inspection or waive the right to do anything about the findings. However, keeping an inspection contingency in the purchase agreement is key to protecting your rights.

A home inspection contingency gives you the right to schedule a home inspection prior to close as a condition of the purchase agreement. You can also use it to potentially negotiate a lower price or having repairs completed based on the findings.

 

What Is A Home Inspection Contingency?

An inspection contingency requires a professional home inspection within a certain time frame before a real estate contract can become binding. It ensures that the buyer receives vital information and allows them to negotiate repairs, sale price, or even walk away with their earnest money altogether. Being able to make a contingent offer on a home provides a buyer important protection and negotiating leverage. It enables you to walk away from the home sale if you have certain predefined showstoppers in your purchase agreement. We’ll touch on a few of the other contingencies briefly below, but first let’s go over the basics of home inspection very briefly.

A home inspection involves hiring a real estate professional, usually licensed, to go through a home and give buyers a report on its condition. A standard inspection will go over the home’s structure, appliances and major systems to make sure that everything is working. This includes going over your foundation, roof and attic, major appliances, electrical, plumbing and AC systems.

You can also get specialized inspections like pest, and water/sewer inspections at an extra cost. You should get these completed in the same window as your home inspection if you want them done. In order to have the most enforceable home inspection clause, you and the seller should agree and get in writing the window of time you have to have an inspection completed and written up. This is generally the same limit on time the buyer has to notify the seller of any renegotiations or repairs they would like based on the inspection.

 

 

How Inspection Contingencies Work

In order to give an overview of how inspection contingencies work, let’s just start with the best-case scenario. In this version, the buyer’s inspector doesn’t find any major problems with the house – or at least none that the buyer isn’t willing to overlook and fix themselves.

In this case, there are still three steps that need to be taken before the sale can consummate. If you’re getting a mortgage, an appraisal of the property will be required. Your home serves as collateral for the loan and a lender can’t give you more than the home is worth. If you agree to a price and the appraisal comes in low, you might have to bring the difference to the closing renegotiate or walk away.

In order to avoid this, you might put in an appraisal contingency. These are typically structured to say that you won’t pay more than the appraised value or the appraised value plus a defined amount.

Once the home inspection and appraisal are done and all the paperwork is in, you’ll typically get to do a final walk-through around closing day. This allows you to make sure the home is in the condition you anticipated.

Finally, you’ll get to close on the house. This is where you get to sign a lot of legal documents and get the keys. Of course, not everyone’s process goes that smoothly, and so let’s see how a home inspection contingency can help in the event that there are problems with the home that need to be corrected.

 

Buyer Requests Further Negotiations

In addition to laying out the amount of time a buyer has to get an inspection done and raise objections, a good inspection contingency should outline what happens when the buyer does wish to raise issues. 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.

In the event that the seller doesn’t agree to make repairs or lowering the price, the buyers are then given a certain number of days to decide whether to waive the contingency and buy the property as is or back out of the contract.

In the event that the seller chooses to make repairs, the buyers should take the opportunity at the final walk-through to make sure these repairs are completed to their satisfaction. This is the final opportunity they’ll have to rectify anything before closing.

 

Buyer Disapproves

Most of these clauses have language in there about a satisfactory inspection. “Satisfactory” gives buyers a lot of latitude. This means that if a buyer finds something that’s going to be an issue and the seller won’t fix it or lower the price, the buyer can back out of the deal.

The benefit of having a home inspection contingency at this point is that backing out pursuant to the clause that allows you to get your earnest money deposit back. Depending on where you live, this is often a percentage of the purchase price, so the deposit can be significant.

 

How And When To Waive An Inspection Contingency

While never required, it’s always a good idea for homebuyers to get a home inspection. If nothing else, you get an idea of the ship the house is currently in and what to look out for in the future. However, there’s nothing that says you need to act on it.

There are instances in which waving a home inspection contingency can be to your advantage. Sellers want certainty, too. If they can be more certain your offer is likely to get to the closing table because there are less contingencies attached, it could give you a leg up in a multiple-bid situation.

It’s important to realize that if you do this, you’re then on the hook for any repairs that need to be completed. You need to decide whether the house is worth whatever additional investment might be needed in repairs if you waive this contingency.

If you like the house in a competitive market and don’t want to give up your inspection contingency, there are other things you can do to sweeten your offer, like paying a certain amount above the appraised value or offering to pay for all or a portion of the closing costs typically paid by sellers, such as real estate agent commission.


 

Related Pages

Founder's Message

How We Operate

Why Choose Us

Careers

BY VIRTUE OF OUR TARGET USER GROUP (SALARIED WORKERS & REGISTERED BUSINESS OWNERS), YOU ARE EXPECTED TO BE ABLE TO SPEAK, READ, WRITE AND UNDERSTAND BASIC ENGLISH TO FOLLOW SIMPLE SERVICE USE INSTRUCTIONS, OR WHERE APPLICABLE, SEEK INDEPENDENT LEGAL AND/OR FINANCIAL ADVICE FROM A QUALIFIED PROFESSIONAL BEFORE USING OUR SERVICES. PLEASE DON'T APPLY OR CONTACT US IF YOU DON'T QUALIFY. OUR 24/7 ONLINE SUPPORT COMPLIMENTS THE ABUNDANT INFORMATION ALREADY PROVIDED ON THIS PLATFORM, AND NOT TO REPEAT THE READILY AVAILABLE INFORMATION AT THE CLICK OF THE BUTTON.

MORTGAGES ARE SECURED AGAINST YOUR PROPERTY. YOUR HOME (OR COMMERCIAL PROPERTY) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT - REPAYMENT ASSISTANCE PROGRAMME AVAILABLE FOR QUALIFIED CUSTOMERS. ALL APPLICATIONS ARE SUBJECT TO YOUR CREDIT PROFILE AND OUR LENDING CRITERIA - THIS MEANS THAT THE AMOUNT WE WILL LEND YOU WILL DEPEND ON YOUR INDIVIDUAL CIRCUMSTANCES, THE TYPE OF PROPERTY AND THE AMOUNT YOU BORROW.

NO UPFRONT FEES REQUIRED TO USE THIS SERVICE. ALL APPLICATIONS ARE DONE ONLINE – NO PAPER APPLICATIONS, NO USELESS PRE-APPLICATION MEETINGS & NO TALKSHOP. ALL IN-PERSON MEETINGS (IN-OFFICE) ARE STRICTLY BY APPOINTMENT AND ARE ONLY SCHEDULED FOR QUALIFIED APPLICANTS IN OUR DATABASE. IT IS ADVISED THAT PROSPECTIVE BORROWERS READ AND UNDERSTAND ALL PROPERTY LOAN AGREEMENTS THAT COVER THIS SERVICE BEFORE SIGNING.

Using this digital-first platform constitutes acceptance of the terms, conditions and rules that govern our operations, so if you disagree with any of them in part or in whole, please don't use our services. Legal & Compliance provided by TLA Firm & Ghanaian Partners.

We are Non-Deposit Taking No Upfront Fee Direct Home Loan Providers (not brokers). All loanable funds are private patient capital from dedicated sustainable and reliable sources and not sourced funds from retailer depositors and/or investors or from the general public. We're Fully-Compliant: Our home mortgages are structured as Seller-Financed Mortgages (SFM), and where applicable as International Mortgages or Rent-to-Buy Mortgages, which do not require Bank of Ghana (BoG) regulation. Commercial Mortgages are also not regulated by the BoG. Prospective mortgage applicants are not restricted to buy a home from our internal partners: Property Buyer & Flipping Platfom DCANS Properties or Rent to Buy Provider RTB Ghana or Affordable Housing Builder DCANS Developments or any of our in-house home providers - however, restrictions may apply with some of our low-rate mortgages.

© 2022 DCANS Mortgage Ghana, affiliated to DCANS Mortgage UK, Institutional Investors DCANS Capital (England & Wales, CRN: 07970200) and DCANS Investments (Ghana, CRN:), Proprietary Trading Firms DCANS FX and XAU79 and Crypto81 and CityStreet Coders & Quants and Oil & Energies Trading Platform DCANS Energy, BNPL Providers DCANS Pay (Ghana) and Quid Pay (UK), No Upfront Fee Non-Deposit Taking Direct Platform Lenders Sikamaster Loans (Ghana) and Quidmaster Loans (UK), Send Now ay Later Global Remittance Platform to Africa & Beyond Moneyafrique, TDG Startup Ecosystem Platforms GhanaStartups.org and UKStartups.net and EUStartups.net, as well as Global Business Buyer Kaizer Labs and Groupwide IHB DBL UK (England & Wales, CRN: 09012597) , are all part of the AML-Compliant TDG GLOBAL CREDIT SYSTEM of The DCANS Group (TDG) Limited (England & Wales, CRN: 12645872, VAT #: GB 157 9161 82), but dual-headquartered in Ghana & the UK, which is itself affiliated to the Osei Family Office OSFO and hedgie C57H.

This platform is securely powered by DCANS and Doctopus (in-house information & data security platform) & Promoted by TDG Media Ventures (which also owns Ghana Business Today and DCANS Print).