Home Inspection Contingencies

Put a Home Inspection Contingency in Your “Offer to Purchase”

inspection contingency
Waiving the home inspection contingency may cost you much more than the cost of a home inspection

Home Inspection Contingencies

If you don’t believe in having a home inspection you should realise that your investment is at risk.  In reality, a home inspection contingency is your safeguard where the voetstoots clause forms part of the sales contract.

In South Africa, the voetstoots clause is part of the purchase contract in most of the property sales. But, unfortunately, you will not find any home inspection contingencies in any purchase contracts.

A home inspection contingency should be added as part of the purchase contract when you have a home inspection. It means you can cancel the sale or try to negotiate repairs based on the results of the inspection.

However, you may not consider that a home inspection contingency is a big deal! In that case, ask yourself why a seller will refuse to consider your offer that contains a home inspection contingency. It has occurred to some of my clients! I told them to consider it a lucky escape!  

In addition, a seller selling a house below market value most probably has serious defects. Don’t fall for reasons like the seller is leaving for overseas or retiring to the coast.

In most instances, you should negotiate for at least a week to conduct a home inspection. The time can be shortened or increased during offer negotiations.

Types of Home Inspections

A home inspection involves many components, which are primarily structural and visual. However, if I discover defects beyond my area of expertise I will recommend that you consult an expert

For example, if the home’s water pressure is low, I will recommend an inspection by a licensed plumber. There could be a blockage the water supply system, or the plumbing pipes could be corroded. I may not be able to identify such defects by noticing the low water pressure. If I recommend further inspections in the report, you may wish to call a specialist for advice.

Specialist inspections include any of the following:

  • Pest and termites
  • Serious structural cracks
  • Electrical wiring
  • Heating and air conditioning
  • Lead-based paint
  • Foundation and basement
  • Roof inspection
  • Sewer or septic system
  • Soil stability
  • Trees and vegetation
  • Water systems and plumbing
  • Mould
  • Asbestos

The home inspection contingency expiry date

Setting the date that a home inspection contingency should be released depends on the contingency you negotiate with the seller. It may not automatically expire unless you take a specific action such as signing a contingency release. That is if a release is part of the contingency agreement. Therefore, if it expires before you have it inspected, you lose the right to have the home inspected.

When your sales contract has a home inspection contingency, it is important to conduct the inspection as soon as possible. I may recommend that you call an electrician to do further investigation of the wiring in the ceiling space. However, for example, you might have to contact several electricians before finding someone available in the time frame you need.

Therefore, it is very important to keep the seller and agent in the picture of what is happening. You should advise the seller on your decision to continue or withdraw from the purchase contract before the expiry date. If you don’t you may have to honour the conditions of the sale.

An example of a home inspection contingency

“The Buyers’ offer is contingent upon a satisfactory inspection within  7 (or _____ ) days. Upon receipt of the results of such inspection, the Buyers may request in writing at any time within the agreed period that the Sellers make certain repairs or that the Sellers reduce the sales price to compensate for such defect(s). Such a request to repair or reduce the price does not terminate the contract and the Sellers shall have _____ days from receipt of such request to agree to make such repairs or reduce the sales price. If the Sellers do not agree, the Buyers shall have _____ days to waive the contingency and accept the property “as-is” or to declare the contract null and void. “

Disclaimer: This article is intended for educational purposes only and does not constitute legal advice. Real estate procedures and documents may vary. Consult a real estate professional in your area if you have specific questions about this subject.

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