A home inspection contingency is a clause in your purchase contract that makes the sale conditional on the results of a professional inspection. If the inspector finds serious problems, you can ask the seller to make repairs, request a price reduction or credit, or cancel the contract and get your earnest money back. It is the structured exit ramp that keeps you from being locked into a house you have not really seen yet.
How the Contingency Works
The clause is written into your offer. Once the seller accepts, a clock starts: you have a set number of days, typically 7 to 10, to hire an inspector, review the report, and decide what to do. The exact window is negotiable and shifts with local custom and market conditions.
During that window, the leverage is yours. You can accept the home’s condition as reported, go back to the seller with a request for repairs or money, or walk away entirely. The financial protection is the point. Without the contingency, canceling after the seller has taken the property off the market could cost you a deposit worth thousands of dollars. With it, a timely cancellation based on inspection findings returns your earnest money.
What the Inspector Looks At
A standard inspection covers the systems and structural components that drive safety, livability, and future repair bills. Under the American Society of Home Inspectors’ Standard of Practice, inspectors evaluate the foundation and framing, roofing and drainage, plumbing supply and drain lines, electrical panels and wiring, and heating and cooling equipment.1American Society of Home Inspectors. Standard of Practice They also check exterior cladding, windows, doors, insulation, ventilation, fireplaces, and built-in appliances. Findings are usually grouped by severity, which matters when you negotiate: sellers address failing furnaces far more readily than scuffed baseboards.
What a Standard Inspection Skips
The limits catch buyers off guard. Inspectors are not required to examine wells, septic systems, sprinkler systems, or underground storage tanks. They do not test for radon or mold. They do not inspect swimming pools, detached outbuildings other than garages, fences, or irrigation. They cannot see behind finished walls, under slabs, or inside sealed chimney flues.2American Society of Home Inspectors. ASHI Home Inspection Standard of Practice 2026 They are not required to walk roofs that look unsafe.
If any of these matter to you, order specialized testing on the side. The contingency period covers those add-ons too, as long as you schedule them before the deadline.
What It Costs
A standard single-family inspection runs roughly $200 to $500, with most in the $300 to $400 range depending on the home’s size, age, and location. You pay the inspector directly whether the sale closes or not.
Add-ons stack up. Radon testing typically adds $75 to $300 when bundled. A sewer line camera scope runs roughly $270 to $1,000 or more, and it is worth the money on older homes with clay or cast-iron pipes. Mold, termite, and well-water tests each carry their own fees. These numbers look small next to a $15,000 sewer replacement discovered after closing.
Your Options After the Report
Once you have the report, you have three paths:
- Accept the home as-is, remove the contingency, and move forward.
- Send the seller a written request for specific repairs, a price reduction, or a closing credit.
- Cancel the contract and get your earnest money back.
Which path makes sense depends on what the report shows and how much you want the house. The strongest repair requests are specific: attach the relevant pages of the inspection report and a contractor’s written estimate. Sellers respond to concrete numbers tied to documented defects far better than to vague demands for cash.
Repairs or a Credit?
If the seller fixes items before closing, you may have little say over the contractor, the materials, or the quality of the work. If you take a credit instead, you control the repair afterward, but you need enough cash on hand to pay for it alongside your closing costs and down payment.
Credits are capped by your loan type. For conventional loans backed by Fannie Mae, the maximum seller concession is 3% of the sale price if your down payment is under 10%, 6% between 10% and 25%, and 9% above 25%.3Fannie Mae. Interested Party Contributions (IPCs) VA loans cap concessions at 4% of the home’s reasonable value.4U.S. Department of Veterans Affairs. VA Funding Fee and Loan Closing Costs FHA loans allow up to 6%. In every case, credits generally cannot exceed your actual closing costs, so a $15,000 credit against $8,000 in closing costs will not fit without restructuring the deal as a price reduction instead.
If the Seller Says No
Sellers can accept your request, counter with a smaller fix or credit, or refuse. A flat refusal gives you grounds to cancel while you are still inside the contingency period, and your deposit comes back. The seller then has a disclosure problem: they now know about the defects your inspection uncovered, and most states require them to disclose known material defects to future buyers.
Deadlines and How You Lose the Protection
The contingency expires on a specific date in the contract. What happens on that date depends on how the contract is drafted, and the difference is the single biggest trap for first-time buyers.
Passive vs. Active Removal
In some states and contract forms, contingencies lift passively. If the deadline passes without action from you, the contingency is automatically waived, you are committed to the purchase, and your earnest money is at risk if you later try to back out.
Other contracts, including the standard California residential purchase agreement, use active removal. The contingency stays in place after the deadline until you sign a form removing it. The seller can issue a notice demanding that you either remove the contingency or cancel, but they cannot seize your deposit just because a date passed.
Ask your agent which type you have before you sign. In a passive-removal contract, missing the deadline by a day can erase your entire negotiating position.
Give Yourself Time
Schedule the inspection as soon as the offer is accepted. Inspectors book up quickly in busy markets, and waiting until day six of a ten-day window leaves no room for specialized testing, repair estimates, or back-and-forth with the seller. If you need more time, request a written extension before the deadline. Asking after it has passed is a much weaker position.
Specialized Inspections Worth Adding
Some conditions need testing beyond the standard inspection. Depending on the home’s age, location, and construction, one or more of these belong on your list.
Lead-Based Paint
For any home built before 1978, federal law requires the seller to disclose known lead-based paint hazards, hand over any existing lead reports, and give you the EPA’s lead safety pamphlet. The seller must also give you at least 10 days to conduct a lead inspection or risk assessment before you are contractually obligated.5United States Environmental Protection Agency. Lead-Based Paint Disclosure Rule (Section 1018 of Title X) That 10-day right exists on its own, apart from whatever your inspection contingency says, though the two periods often overlap.6Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property
The disclosure rule does not apply to homes built after 1977, zero-bedroom units like lofts and studios (unless a child under six lives there), short-term rentals of 100 days or less, housing designated for elderly residents, or foreclosure sales.
Radon
Radon is an odorless, radioactive gas that rises from the ground and can accumulate in enclosed spaces, especially basements. The EPA recommends testing every home regardless of location and advises mitigation at 4 picocuries per liter or higher.7United States Environmental Protection Agency. EPA Map of Radon Zones and Supplemental Information A mitigation system typically runs $800 to $1,500, a small enough number that sellers often agree to pay for it rather than lose a buyer.
Sewer Line Scope
A camera inspection of the main sewer lateral is one of the most underused tools a buyer has. Root intrusion, bellied pipes, and deteriorating cast iron are invisible from the surface and can result in five-figure repairs. It is especially worth doing on homes over 30 years old and on lots with large trees near the sewer line.
“As-Is” Listings Still Allow Inspections
A property listed as-is does not mean you cannot inspect it. It means the seller is announcing that they will not make repairs. You can still include an inspection contingency, order the inspection, and cancel within the contingency period if the findings are bad. The as-is label changes the negotiation, not your right to investigate.
What it does change is strategy. Handing an as-is seller a long repair list will likely bring a flat no. Your realistic moves are accepting the condition, asking for a price reduction that reflects what you will spend, or walking away. The inspection still gives you the information to pick the right one.
What You Give Up by Waiving
In competitive markets, some buyers waive the inspection contingency to make their offer stand out. The cost is real. Hidden mold, foundation cracks, failing septic systems, and other problems routinely add up to tens of thousands of dollars when discovered after closing, and without the contingency, that money comes out of your pocket.
If you feel squeezed, a middle path is to keep the contingency but limit it to major structural, safety, or mechanical defects above a stated dollar threshold. That signals to the seller you will not nickel-and-dime them while preserving your exit from a genuine disaster. If the seller allows it, a pre-offer inspection is another option, so you know what you are buying before you commit.
Inspection vs. Appraisal
These get confused all the time. The appraisal is ordered by your lender to confirm the home is worth the price. It protects the bank. The inspection is ordered by you to evaluate physical condition. It protects you.
Lenders almost always require an appraisal and generally do not require an inspection. That does not make the inspection optional in any practical sense. The appraiser estimates market value, not whether the furnace will last the winter. A home can appraise at full price and still carry $40,000 in deferred maintenance that only an inspector would catch.