An inspection contingency clause is the provision in your purchase contract that lets you hire inspectors, review what they find, and then either demand repairs, renegotiate the price, or cancel the deal and recover your earnest money. It runs on a short clock, usually 7 to 14 calendar days from the day after both parties sign, and almost every protection it offers evaporates the moment that deadline passes. Understanding how the period runs, how removal works, and what happens if you miss a date is the difference between a safety net and a forfeited deposit.
How the Inspection Period Runs
The clock starts the day after both parties sign the final purchase agreement or counter-offer. From that point you have a set number of calendar days, written into the contract, to finish every inspection, read every report, and get your formal response to the seller. Most markets land between 7 and 14 days. The length is negotiable, but once it’s in the contract, it governs.
Calendar days means weekends and holidays count. A 10-day period that starts on a Thursday ends the following Sunday a week later, not the Monday after. Agents sometimes miscalculate this, so count the days yourself. The clock does not pause because an inspector is booked up or a holiday falls in the middle. Line up inspectors before you sign, not after.
Everything has to fit inside that window: scheduling the general inspection, ordering specialized ones, receiving reports, and delivering your written response. If your repair request lands in the seller’s inbox one day late, you have no leverage to demand anything.
Which Inspections to Order
Start with a general home inspection. A licensed inspector examines the structure, roof, electrical, plumbing, HVAC, insulation, and visible foundation. The report usually runs 30 to 50 pages with photos and severity ratings, and it often points to places that need a closer look from a specialist.
A standard home inspection costs roughly $300 to $500 for a typical single-family house, more for larger or older properties. Specialized inspections add to it. None of these costs are refundable if the deal falls through, and sellers do not pay for them. Budget before you make an offer.
Radon Testing
Radon is an odorless, radioactive gas that seeps through soil into basements and crawl spaces. The EPA recommends fixing a home if radon reaches 4 picocuries per liter (pCi/L) or higher. Testing takes at least 48 hours with windows and exterior doors kept closed, starting 12 hours before the test begins, and the device goes in the lowest livable level of the home. If results come back at or above 4 pCi/L, a mitigation system typically costs $800 to $2,500 depending on the foundation.1U.S. Environmental Protection Agency (EPA). Home Buyer’s and Seller’s Guide to Radon A test itself runs around $150 to $250.
Sewer Scope
A general inspection does not cover the sewer lateral, the underground line connecting the house to the public main. A sewer scope sends a camera down to check for cracks, root intrusion, collapsed sections, and low spots. Repairs are not covered by homeowners insurance and can easily hit five figures if the line needs replacement. Homes with older clay or concrete pipes are especially prone to failure. A scope generally costs $250 to $500. This is the inspection buyers most often skip and most often regret.
Pest and Wood-Destroying Organisms
A wood-destroying organism inspection looks for termites, carpenter ants, wood-boring beetles, and fungal damage. In many regions it’s a separate report by a different licensed professional, usually $50 to $150. FHA and VA loans often require a clear pest inspection before the lender approves financing.2U.S. Department of Housing and Urban Development (HUD). FHA Single Family Housing Policy Handbook 4000.1
Lead Paint
Federal law requires sellers of homes built before 1978 to disclose any known lead-based paint hazards, provide an EPA-approved pamphlet, and share any lead inspection records. Buyers get a minimum of 10 days to conduct their own lead risk assessment, though both sides can agree in writing to a different timeline. You can waive this period, but given the cost of remediation and the health risk to children, waiving is rarely worth it. Sellers who knowingly violate the disclosure rule face liability of up to three times the buyer’s actual damages, plus civil penalties.3eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property
Submitting the Repair Request
Once you have your reports, you submit a formal repair request to the seller through your agent, usually on a standardized form. List each defect by item number from the inspector’s report, describe the recommended repair, and attach the relevant pages as backup. Vague requests get ignored. Specific ones with photos and cost estimates get taken seriously.
Focus on items affecting safety, structural integrity, or major systems. Cosmetic issues and ordinary wear rarely succeed. A buyer who asks for 40 minor repairs signals inexperience; a buyer who focuses on the cracked heat exchanger and the deteriorated roof flashing signals someone who knows what matters.
After the seller receives your request, they have a few days to respond in writing. The exact window is in your contract. From there it’s a negotiation: they can agree to everything, reject everything, or counter with a partial fix. The back-and-forth continues until you reach agreement or decide to walk.
Credits Versus Seller Repairs
When negotiation reaches the resolution stage, you choose between asking the seller to make physical repairs before closing or accepting a credit toward your closing costs so you can handle the work yourself.
Seller-performed repairs look simple but introduce risk. You’re trusting the seller to hire qualified contractors under time pressure, and the seller has every incentive to spend as little as possible. Contractor delays can push back closing. That said, if you’re using an FHA or VA loan and the lender requires specific repairs before funding, the seller may need to handle those directly because a closing credit will not satisfy the lender’s requirement.
A closing credit gives you control. You pick the contractor, manage the timeline, and ensure the work meets your standards. Credits also avoid the risk of a second inspection and the delays that follow. The catch is that lenders cap how much the seller can contribute. On an FHA loan, seller concessions are limited to 6% of the sales price.4U.S. Department of Housing and Urban Development (HUD). What Costs Can a Seller or Other Interested Party Pay on Behalf of the Borrower VA loans cap concessions at 4% of the home’s reasonable value.5U.S. Department of Veterans Affairs. VA Funding Fee and Loan Closing Costs For conventional loans backed by Fannie Mae, the limit depends on your down payment: 3% if you’re putting less than 10% down, 6% between 10% and 25%, and 9% above 25%.6Fannie Mae. Interested Party Contributions (IPCs) Any credit above these caps gets deducted from the sales price, which can affect your loan-to-value ratio.
Removing the Contingency
Once you’re satisfied with the inspection results or the negotiated repairs, you remove the contingency. That is the step that commits you to the purchase. In most contracts, removal requires an affirmative act: you sign a contingency removal form and deliver it to the seller. Until that signed document is in the seller’s hands, the contingency technically remains in place even if the deadline has passed.
Some contracts use passive removal instead. Under passive removal, the contingency expires automatically on the deadline date unless you’ve submitted a written objection. Bank-owned foreclosure sales commonly work this way. The difference matters. Under active removal, a missed deadline leaves the contingency hanging in limbo. Under passive removal, a missed deadline means you’ve lost your inspection protection entirely without realizing it. Read your contract to know which system applies.
Once the contingency is removed, your earnest money deposit becomes non-refundable in most situations. You’ve told the seller you accept the property’s condition and intend to close. If you back out after that, the seller has a strong claim to your deposit.
What Happens If You Miss the Deadline
This is where most buyer claims collapse. If the deadline passes and you haven’t submitted your repair request or cancellation notice, the protections the clause was designed to give you are gone. Your earnest money effectively goes “hard,” meaning it’s no longer refundable if you back out over inspection issues discovered after the deadline.
In many contracts, the seller can respond to a missed deadline by issuing a notice to perform. That notice gives you a short window, usually two to three days, to either remove the contingency or cancel. If you do neither, the seller can cancel the contract and claim your earnest money. The notice to perform is the seller’s way of forcing a decision when a buyer stalls, and it’s entirely within their rights once the deadline passes.
The money at stake is not trivial. Deposits typically run 1% to 3% of the purchase price, so on a $400,000 home you could lose $4,000 to $12,000 because you missed a date on the calendar. Set a reminder for two days before the deadline, not the deadline itself.
Waiving the Contingency
In competitive markets, buyers sometimes waive the inspection contingency to strengthen their offer. The math on waiving is rarely favorable. You’re trading a guaranteed right to exit for a marginally better chance of winning the bid. If the house turns out to need a $20,000 sewer line replacement or has a failing foundation, you own that problem at full price. Newer homes with recent inspection histories carry less risk than older homes with deferred maintenance, but even new construction can hide surprises behind fresh drywall.
A middle-ground option is a pre-offer inspection. You schedule the inspection before submitting your offer, then write the offer without an inspection contingency because you already know the home’s condition. The seller sees a clean offer, and you’ve already done your due diligence. You pay for an inspection on a home you might not win, but $400 for peace of mind beats $12,000 in forfeited earnest money.
As-Is Listings Still Allow Inspections
An “as-is” listing means the seller will not make repairs. It does not mean you can’t inspect. Even in an as-is sale, you can include an inspection contingency in your offer, and the results let you decide whether to proceed at the agreed price, negotiate a lower price, or cancel within your window.
The as-is label also does not eliminate the seller’s obligation to disclose known defects. Nearly every state requires sellers to complete a property condition disclosure form covering major systems. A seller who conceals a known problem is exposed to fraud or misrepresentation claims regardless of as-is language. An inspection report that contradicts the seller’s disclosures is one of the clearest reasons to walk.
FHA and VA Property Requirements Are Separate
If you’re using an FHA or VA loan, the lender imposes its own minimum property requirements through the appraisal, and those are separate from your inspection contingency. FHA requires properties to be safe, sound, and secure, and common triggers for mandatory repairs include defective roofing, inadequate sewage disposal, termite damage, and safety hazards. If the condition is too poor, FHA can reject the property entirely.2U.S. Department of Housing and Urban Development (HUD). FHA Single Family Housing Policy Handbook 4000.1 VA loans impose their own standards covering drinking water, sewage disposal, roof condition, electrical, heating, and ventilation.7U.S. Department of Veterans Affairs. VA Basic MPR Checklist A standard home inspection is for your information; the lender’s property requirements are for the lender’s protection. You can accept a cracked walkway after a home inspection, but if the FHA appraiser flags it as a safety hazard, it has to be fixed before closing.
The Final Walk-Through
The final walk-through happens 24 to 72 hours before closing and is your last chance to confirm the negotiated repairs were actually done. This is not a second inspection. You’re checking specific work, not re-examining the house.
Bring the repair agreement and the original inspection report. Confirm each item was addressed, and look for temporary fixes or sloppy work that doesn’t match what was promised. If the contract called for a licensed plumber to replace a corroded water heater, check for permits and ask for the receipt. Document concerns with photos and share them with your agent immediately.8Zillow. Final Walk-Through Checklist Before Closing on a Home
If repairs are incomplete or clearly substandard, your agent can negotiate a closing credit, request that part of the seller’s proceeds be held in escrow until the work is done, or push closing back. Once you sign the closing documents, your leverage drops sharply. The walk-through is the moment to speak up.