Inspection Contingency

Jana Klaasse
Jana Klaasse
Published on July 13, 2021


With more buyers right now than there are homes to sell them, homes priced at market value are getting multiple offers. so in an effort to make their offer stand out, lots of buyers are waving contingencies including the inspection contingency and of course the fewer contingencies, the more attractive the offer is to sellers. so i’m going to focus on the inspection contingency and go over the inspection contingency options and give you my thoughts on waiving the inspection contingency.

When you put in an offer on a home, your realtor will probably use a standard contract from the Board of Realtors.

And part of that document is a contingency addendum with the contingency options. and one of those options will be the inspection contingency and that’s where you indicate if you want to get an inspection or not, and what kind of inspection.

And there are two selections. One is an As Is inspection and the other has language allowing you to request repairs from the seller. The As Is inspection is for informational purposes only. It’s a take it or leave it kind of thing.

And it allows you to back out of the contract if you find something you can’t live with.

The second option also allows you to back out of the contract immediately. But it also allows for repair request negotiations with the selle, and if that can’t be resolved, allows you to avoid the contract.

Both types of inspections have time limits – usually around 15 days from the day you and the seller have reached an agreement and signed a contract.


So waiving a home inspection completely. You do have that option but it’s not a good idea. We’re seeing it more and more these days. If you are familiar with construction and what things to look for when you are home shopping, then waving the inspection is not so problematic.

Plus you can take a look at the property disclosure or disclaimer and that’s a form that is required from the seller and in west virginia, the seller is required to disclose any known defects in the property. The operative word there is “known”. if he doesn’t know, he can’t disclose.

If you are like most of us with a little knowledge or if you are completely clueless then it’s not a good idea to waive a home inspection.

We had a client that did that (against our advice), moved in and found a roof leak so he had some expensive roof repairs. they probably would not have backed out of the contract had they found it early on. but at least they would have known what repairs they’d be facing and could plan for it.

If you do waive the inspection in order to win in a bidding war, it’s a good idea to have a hefty home maintenance or emergency fund in case there are repairs needed after you move in. if you are getting a government loan – FHA, VA, USDA loan, then the bank will require an appraisal and part of that is an inspection.

The appraiser will appraise the property and inspect the property and may cite repairs needed before the loan will be issued. But the inspection they do is not the same as the inspection done by a licensed home inspector. It’s not near as thorough. But truthfully, a lot of that depends on the appraiser. Some are just not as thorough as others.

So let’s say you opt to get an inspection. From a seller’s perspective, the next most favorable option after waiving it, is the as is inspection.

It gives the seller peace of mind because they won’t be looking at doing any repairs and it allows you to learn about the house – what problems there are like life expectancy of the hvac system – things like that. And it allows you to back out of the contract if you so choose. and in this seller’s market, the as is inspection is probably the best option to put you in a good position in a bidding war.


If a seller has multiple offers, he’ll probably put the offers that waive the inspection or request an as is inspection at the top of the list. The possibility of a home inspection requesting that he do repairs will probably be at the bottom of his list.

It’s just the way the market is now. it’s completely different than how things were a couple of years ago.

When I have a listing and receive multiple offers. I do a spreadsheet for the seller and there are four main considerations and they are pretty much equal. They are the price, type of payment, the home inspection contingency and appraisal contingency.


At the top of the list is price and type of payment. paying cash will likely trump anything else.

Even if the offer price is a little lower. next payment type preference is a conventional loan with 20% down. government backed loans are not as appealing because of the possibility of lender required repairs.

An equally important consideration is the home inspection contingency – waving it or doing an as this inspection are preferable from the seller’s perspective.

The next thing is the appraisal contingency. offering to waive that or if you bid above the listing price and the appraisal comes in lower, offering to cover that difference is going to be the most attractive option to the seller.

So we’re in an unusual market right now. interest rates are really low and prices are going up, so it’s a good time to buy a house, you get more house for the money and will likely see your investment go up in value.

But it’s not an easy time.

If you do have any questions or need some guidance in this crazy market, give us a call or text us. we’d love to help.

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