Inspection Contingency

What is an inspection contingency?

Updated March 9, 2022

Also called a "due diligence contingency," an inspection contingency allows the buyer to have their prospective property inspected by an expert within a certain time frame, generally five to seven days.

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An inspection contingency, also known as a due diligence contingency, protects a buyer in case the house doesn't pass its inspection. Brian Babb/Unsplash

Inspections cover homes from the bottom of the foundation to the top of the roof and detail minor or major issues that may impact or impede the sale.

If the inspection does turn up problems, the contingency gives the buyer the right to:

  • Back out of the deal and have the deposit refunded
  • Request time for another inspection to further analyze issues
  • Ask for repairs or concessions, including a lowering of the sales price, from the seller

Buyers are not required to have the home they’re purchasing inspected, and sometimes in bidding wars, they opt not to take this extra step to save time and to make their bid more competitive. Experts, however, recommend inspection contingencies because they reduce risk.