When purchasing a home in DC, Maryland, or Virginia, you will have the option to make your offer contingent on a home inspection. This means that if your offer is accepted, you will have a specified number of days to inspect the home. If there’s something wrong with the house, then you can get out of the contract or negotiate with the seller.
The contract used by your local Realtors’ Association offers a few options for the home inspection contingency. Let’s run through each and then you and your agent can decide which is right for you.
Home Inspection Contingency Deadline
As the buyer, you will have the opportunity to determine the length of your home inspection contingency. In a normal transaction, it’s typical for the inspection contingency to last 5-7 days from the date the contract was signed (date of ratification). However, in a more competitive scenario, it’s common to see the home inspection contingency last just 2-4 days, as the shorter timeline is more attractive to the seller. Example: Let’s say the buyer and seller sign the contract to purchase the home on Friday. The contract has a three-day home inspection contingency. The buyer would need to notify the seller, in writing, of any negotiations/repairs/intent to walk-away, no later than close of business on Monday.
Home Inspection with the Right to Negotiate
This option allows the buyer to ask the seller to repair specific issues found during the home inspection. This is the most attractive option for the buyer because of the ability to negotiate with the seller. However, simply asking for the repairs doesn’t mean the seller has to agree to make them. So be mindful of focusing on major issues, rather than losing the house over a sour negotiation. If you and the seller cannot come to an agreement on which items the seller will repair, then the contract is void and your earnest money deposit is returned. You also have the option of asking the seller for a seller credit, which is essentially the seller giving the buyer money to make the repairs post-closing.
Home Inspection with the Right to Terminate Only
Just as it sounds, this option lets the buyer perform their home inspection, but it’s take it or leave it. As a buyer, this is less attractive than the previous option because it takes away your ability to ask the seller to make repairs or provide a seller credit. Sellers like this option because they know the buyer will either walk away from the deal or continue forward – no negotiating, no back and forth (in theory of course). As a buyer, if you uncover issues that turn your love into hate, then you can walk away from the deal and have your earnest money deposit returned. The buyer doesn’t even have to provide a reason for voiding the contract. This option is most commonly used by a buyer when competing against multiple offers for the same house.
Home Inspection with the Right to Negotiate AND Terminate
This is pretty much the best of both worlds from the buyers’ perspective, as you can either negotiate repairs/seller credit with the seller…or simply walk-away from the deal without providing any specific reason.
No Home Inspection Contingency….or the Pre-Inspection
Just as it sounds, this is when a buyer makes an offer on a property, and the offer omits the home inspection contingency. A great deal for the seller! Not so much for the buyer, unless…
When purchasing a home in a strong sellers’ market, buyers often find themselves competing with other buyers for the same property. The PRE-INSPECTION is when a buyer performs a home inspection before submitting their offer. Therefore, the buyer has had a thorough inspection performed before writing an offer, and if comfortable with the results, can proceed with an offer with no home inspection contingency. This will make the buyers’ offer more attractive to the seller.
If the pre-inspection uncovers major issues that cause the buyer to have reservations about purchasing the house, then the buyer can simply decide to not make an offer on the house.