Purchase Agreement -
Inspection Contingency Addendum

When purchasing real estate it's a good idea to inspect the property.

Home inspections protect all parties involved. The sellers may feel that it is not beneficial to them, but by giving the buyers full access to inspect the entire premises, they limit their future liability. Sellers should encourage reluctant buyers to hire a qualified inspector.

Commercial properties should also be inspected, as the liability for certain issues can be even greater in a business where members of the public congregate.

Some buyers feel that they can see all they need to know themselves. This is usually not true. Few buyers crawl into attic spaces or under buildings to check the integrity of the roof system or the floor joist. Few buyers know what the plumbing and wiring should look like, even if they crawl into those inaccessible spots. Not many will climb onto a roof to check the mortar between the chimney bricks or see the condition of the roofing, flashing, and caulking.

General inspectors look at the entire structure... and if in doubt about any components will recommend calling in a specialist. For instance, your inspector may tell you to call a heating contractor or plumber or to have the well or septic checked by an expert in those fields.

Inspections can save the buyer from unknown headaches and financial surprises. So unless you’re buying a fixer and know you have to start from scratch, have that property inspected.

The Inspection Contingency to Purchase Agreement gives the names of the interested parties and the address / legal description of the property. It specifies which inspections are to be performed, in what time frame, and further specifies that they be done by a qualified inspector. It also states which party will pay for the inspection(s).

Time is of the essence in a real estate transaction, so if the buyer fails to complete the inspections within the specified number of days, the seller may assume that the contingency has been met and removed. After that point the buyer may not use the condition of the property to back out of the transaction.

This form outlines procedures to use if the buyer finds a defect and wants the seller to correct it before closing. For instance, the seller must be notified within a set number of days. The seller will then have another set number of days in which to respond or the purchase agreement becomes null and void ... and buyer’s earnest money is returned.

Both parties agree to sign a Cancellation of Purchase Agreement in this case...effectively releasing each other from further obligation.

Purchase Agreement - Inspection Contingency Addendum