Home Buying Contingency

Congratulations, getting a home inspection is arguably the one most beneficial step a prospective homebuyer undertakes. A contract with a Home Inspection Contingency is for your utmost benefit, so move quickly. It is on you to exercise your due diligence. During this time, you generally have upwards of 20 days to get your inspection completed.

Home inspectors examine readily accessible areas, systems, and conditions of a home. They utilize visual and normal operating controls following state and association Standards of Practice.

But you may be unfamiliar with what a home inspection entails and its significance. Therefore, the purpose of this article is to provide you with insight from a home inspector’s perspective. 

Is the inspection contingency worth it?

As lawsuits were becoming more prevalent following real estate transactions, the need for home inspections increased. Real estate attorneys, agents, lenders, and others involved in the transaction process will strongly recommend you have the home inspected. Documents you will review and sign throughout your transaction also include a written disclaimer to do so. Inspectors are independent of the real estate company, appraiser, or your lender; only to you. By getting the home you intend to purchase inspected, you’re making the smart choice by exercising your due diligence!

Homebuyer inspectors in the real estate transaction

Property inspectors are one of the key people involved in real estate transactions. They provide clients with a professional written, unbiased evaluation of the subject property’s exterior and interior systems and conditions. Inspectors primarily look for major defects and other conditions that will or are already impacting the home and the safety of occupants. In addition to educational information on the subject property, e.g., quality of workmanship, pros, and cons of a forced-air heating system. Or the problems caused by too many layers of roof sheathing.

Buyers do not receive all the pertinent details upfront when looking at a home you intend to purchase. You receive information that assists sellers and real estate agents in attracting qualified buyers. Let’s call these the strengths of the Property. However, a home inspector will provide you with a report that highlights the current state of the home’s observable conditions.

In short, this will lend to both the strengths and weaknesses of a home its age. The home inspection contingency offers many advantages!
As a result, this leads to why many deals are successfully closed after the home inspection report on the subject property appears favorable. Home inspections shed light on the overlooked expenses associated with the property.

Property Condition Disclosure Statement sellers provide

While sellers should document any known defects both past and present in a Property Condition Disclosure Statement (more info here) it is optional, and the questions are limited. Current owners are not always 100% honest of all conditions or aware of all issues before their ownership. Which then makes sellers reluctant to produce this document.

An inspection report accompanied by the Seller’s Disclosure Statement, when readily available, gives homebuyer(s) the best overview of the subject property. But, the Property Condition Disclosure Statement is not a substitute for a home inspection report.

What happens if the house fails the inspection?

 Inspections are not based on a pass or fail assessment.
Rather the inspection and subsequently the home inspection report will address problems with the property and safety concerns to the occupants. The inspection report itself is a guide on the home in general, especially for first-time homebuyers.

It is then up to you, the homebuyer, to weigh your risk tolerance using all readily available information. For first-time homebuyers, this is another important reason for exercising the inspection contingency. With the home inspection report in hand, buyers may then negotiate, back out of the deal, or accept the home as-is.

However, one homebuyer may overlook the issues addressed in the inspection report because they love the neighborhood and home. Another buyer may back out of the deal if presented with the same home inspection report. A home inspector has to observe and report. It is usually the clients that conclude if the home passed or failed.

Top reasons for getting a home inspection

  • First-time homebuyers.
  • Know which systems need repair, had unsafe modifications or aged.
  • Property listed as, For Sale by Owner (FSBO).
  • Home has been on the market for longer than 60 days.
  • Home listed as “As-Is.”
  • Lender/Insurance request review of the report.
  • The price seems too Low.
  • If it is an FHA/HUD home.
  • Compare with Sellers Disclosure form.
  • When no Sellers Disclosure is available.
  • Seller(s) offered you a closing credit if you forgo the inspection.
  • You only viewed the home once via an open house or online tour.
  • You notice some shoddy Do It Yourself work in the home.

How beneficial is the inspection report?

  • Assurance With a purchase this large, a detailed inspection report adds to your buying confidence.
  • Educate in the home-style strengths and weaknesses, maintenance needs, main systems, locations, and how they function. For many people now searching for a home, this will be a first-time home purchase. For more information on common styles refer to the expert guide, 26 Popular House Styles
  • Maintenance repair/replacement needs with a home inspection report as a reference point. You can prioritize what should be immediate versus future needs of the home you are considering for purchase. Besides closing costs, moving expenses, and new furniture, you may inherit a home needing immediate repair work. The home inspection contingency is therefore invaluable when looking at your intended purchase objectively.
  • Negotiate a better price with the seller if you determine you are justified to do so or at least negotiate a credit from the seller(s) towards the closing cost. With an inspection report in hand, ask yourself, are the problems significant enough for you to handle on your own or not. Will they affect your use of the home as intended? Are the defects major or minor? Your real estate agent can assist you in negotiating with the seller for a reduced price of the property as an alternative to repair or replacement of items before closing.

Do inspectors always find something wrong?

More often than not, a thorough home inspector will find something wrong with the home during the inspection. From aged components, installation issues, safety issues, deferred maintenance, and immediate repair needs. Some findings may be insignificant, while others are costly. One defect of the home easily surpasses that of what you pay for getting the home inspected.

Will repair estimates be included in the report?

Currently, this is not standard practice in New York. However, for agents, buyers, and sellers who are interested in acquiring repair estimates in connection with a real estate transaction, please read our post, Repair Estimates

Waiving your home inspection contingency!

  • Skip the home Inspection. Is a home inspection worth it-homebuyer Contingency
    If you decided to waive the home inspection contingency you are not in the clear just yet if you will carry a loan (mortgage). For instance, the insurance company takes notice of this and written into their underwriting policies, states that they have a right to do their insurance inspection before writing a new homeowner’s policy or within a set time after the transfer of the home.

Consequently, the insurance company findings turn up many safety, mechanical, structural, and other issues with the home you just purchased or will be closing on. Now, your policy may be canceled if all critical repairs are not made in a reasonable time, or, you’re forced to raise your deductible and if not, pay a higher premium.  A home inspector would’ve pointed out all the problems earlier, especially key components also reviewed by the insurance companies, but remember you opted to skip that inspection! These roads are too tricky to navigate on your own, take the help of professionals. For an external article that covers reasons not to skip the home inspection, see 10-reasons-you-shouldn’t-skip-a-home-inspection

What is included in a home inspection?

A home inspector observes and provides a written report of the systems and conditions of a residential building including but not limited to:



The building envelope, roof; attic;

Siding, gutters, penetrations, flashing;

Chimney, fireplace


Heating System.

Cooling System.

Plumbing System.

Electrical System.

Interior components.

Floors, walls, ceilings.

Property grounds; grading,



Difference between the appraisal and inspection reports!

Lenders initiate the request for an appraisal at the expense of the buyer when a loan is needed. Therefore, this assessment is designed for and protects the lending institutions. As it aids them in establishing the fair amount value of the home concerning the loan amount requested.

The standard report commonly used by appraisers, independent or not, as seen here (Uniform Residential Appraisal Report); Has 1 section of the systems of the property. Time on-site is dependent on how much comparable data is already at hand, in addition to value upgrades. The report belongs to the lending institution. Here’s a more in-depth reading on the subject matter via NextAdvisor.com

The home inspection contingency is designed to protect your interest!

On the other hand, a homebuyer (pre-purchase home inspection) or seller (pre-listing home inspection) may initiate getting a home inspected. The contingency inspection is to protect their self-interest. Become better educated on the home’s strengths and weaknesses. Or to assess current and foreseeable maintenance issues during the inspection. Typical on-site assessment time ranges from 3-4 hours on average. The inspection report belongs to whoever initiated the request for the home inspection (buyer or seller).

In short, neither the appraisal nor the home inspection report is a substitute for the other, as they serve different purposes. However, both inspection reports are a value of opinion that can aid in successfully pushing the deal forward or stop the transaction until issues are satisfied.

Inspector, Contractor, or other specialists?

Reasons to have your home inspected by a licensed home inspector are due to the knowledge base they offer buyers & sellers, the unbiased perspective, and the affordability of such an in-depth service. Contractors and, specialists would require some form of dismantling components of the subject property you do not yet own.

On the other hand, an experienced and educated home inspector has the knowledge base of all the above-listed specialists. If needed, we will point out items, areas, raising a concern, and why. Then point you in the direction of the specialist who would best handle that specific situation. Secondly, a home inspector has no interest in bidding for any projects once you are the new homeowner.

Who hires the home inspector?


You hire the home inspector you wish to work with, agents, lenders, lawyers, and the likes may already have a shortlist of home inspectors their previous clients have used and will recommend. But homebuyers need to perform their due diligence when it comes to knowing the steps involved and the key people involved in a real estate transaction. As you prepare to become new homeowners, building your network of people that know homes will prove beneficial to you.

In New York City, if you are not provided with a Property Disclosure Document and have the home inspected, you do receive a $500 credit at closing on that same property. So a standard home inspection pays for itself. More information here, home-sellers-disclosures-required-under-state-law

Do you have to be present during the inspection?

While it may be easier for you to see firsthand, then review the report with a better understanding, it is also quite normal that the potential buyer, you, may not be available for various reasons. Just make sure the inspector you plan to hire will write up an easy-to-understand report. Your home inspector Provides plenty of photographs of everything inspected, limitations, and validate with further proof the time/length of time at the property.

Furthermore, make sure they can set up a time to go over anything you wish in further detail. Also, review an inspector’s sample report and ask yourself, is this something I would understand if I did not attend the inspection. If the pre-inspection agreement was signed beforehand and payment received, most inspectors know how to proceed without the client present.

How much does a home inspection cost in NY?

The cost of getting a home inspection in New York City and Long Island varies greatly. You will find that many home inspection websites do not list home inspection prices while others do. Our research of the local NYC market turned up inspection prices of $400 ranging upwards to 1% of the home’s selling price; for a single-family home. For comparison, our inspection prices are online.

The location of the home to be inspected is also another factor, in a zip code where home prices go for say 700k and up, some inspectors charge more.

Price is also affected by the home inspector you select. Some inspectors are in higher demand than others for various reasons. Some home inspectors work for a multi-inspector company or franchise, while other inspectors are a one-two-person operation. Additional experience, licenses, certifications, availability, choice of reporting format, also lend to an increase in service prices.

How long does an inspection take to be completed?

Much goes into getting a thorough home inspection. Do not take the term “visual” lightly, as home inspectors are considered analytical thinkers. To produce a quality home inspection report which you then use as a decision-making tool, we inspectors must gather as much relevant information on the home that we see and can uncover within a few hours.

Quality home inspectors identify conditions ranging from 300 to 1000 plus data points when using modern software as a reporting tool. On average, a thorough one-family home inspection can easily range from 2½ to 4 hours on-site and another 2 hours spent on writing or inputting data for your report.

Inspections usually take longer for larger homes, homes with additions, homes with above-average to severe problems. Also, the speed at which the inspector moves freely through the property without limitations and interruptions. Ancillary services will also add to the inspection time.

Ancillary Inspection Services

Some inspection companies provide additional services for a separate fee. These services are usually requested by the intended homebuyer, bank, seller(s) or determined to be needed by your home inspector during your inspection. The most common of these ancillary home inspection services are:

HUD 203 (K) inspections
Indoor Air Quality
Moisture/mold inspection
Maintenance inspection
New construction
Pool & Spas
Radon inspection
Repair/ replacement inspection
Septic inspection
Sewer line
Stucco inspection
Thermal (infrared) inspection
Termite inspection

When inspecting your home inspector, see if they offer any ancillary services. You can never be too sure of what may turn up during your home inspection that would require an inspector to be present and equipped with the necessary knowledge and tools.

Checklist vs Narrative vs combination report

The preformatted checklist report uses the check the box approach. Do not expect pictures or in-depth annotation. Consequently, it can appear cryptic in terms of readability, usually incorporates a grading system of “Poor,” “Good,” and “Excellent.” As a result, this leaves much to be desired. However, the pros of the checklist report are its quick turnover rates; on-site.

In comparison, narrative reports are expandable. More modern industry templates which can be customized as needed. Include photographs, summary sections, system, and condition notes. However, the turnaround time is usually within 24 hours or less.

Lastly, some inspectors use a combination of checklists on-site and transfer this data to narrative software off-site. This approach allows for a summary report on-site. But the inspector may need to make numerous edits before the official report is ready.

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