The inspection contingency is the clause in your purchase contract that lets you hire an inspector, review the findings, and then accept the home, negotiate repairs or credits, or walk away with your earnest money intact. Most inspection periods run 7 to 15 days, and how you use them determines whether you overpay for hidden problems or negotiate from a position of strength. This guide walks through the clause, the decision tree after the report, and how to write repair requests sellers actually sign.

How the contingency clause works

An inspection contingency is a written condition in your purchase agreement: the sale moves forward only if you're satisfied with the inspection results (or reach an agreement about them) within a defined window. The key mechanics:

  • Inspection period: typically 7 to 15 days from contract acceptance, though competitive markets sometimes compress it to 5 days. The clock starts on the effective date of the contract — schedule your inspection immediately, not at the end of the window.
  • Earnest money protection: if you terminate within the inspection period for inspection-related reasons, you get your earnest money deposit back. Miss the deadline without requesting an extension, and the contingency expires — you lose your exit right and may forfeit the deposit.
  • What you can inspect: the general home inspection plus any specialty inspections you arrange — radon ($150–$250), termite/WDO ($75–$150), sewer scope ($150–$300), mold, chimney, pool, and septic. Order specialty inspections the day the general inspection reveals a concern; don't wait.
  • Contract forms vary by state: some states use a full inspection contingency with a repair-negotiation process built in; others use an "as-is with right to inspect" form where you can walk away but the seller has no obligation to negotiate repairs. Know which form your state uses before you assume you can demand fixes.

Waiving the inspection contingency is a common bidding-war tactic: you gain offer strength but absorb 100% of the repair risk. If you waive, still pay for an inspection during the contract period for information — you'll know what you bought even if you can't act on it contractually.

The decision tree: what to do when the report lands

A typical inspection report runs 30–60 pages with dozens of findings. Most are minor. Sort them into three buckets before you decide anything:

  1. Bucket 1 — Accept as-is: cosmetic issues, minor maintenance, normal wear for the home's age (a worn carpet, a dripping hose bib, a missing outlet cover). These are homeownership, not negotiation.
  2. Bucket 2 — Negotiate: safety hazards, structural concerns, and major systems at or past end of life — roof near failure ($8,000–$15,000 to replace), HVAC over 15–20 years old ($5,000–$12,000), active water intrusion, electrical hazards, a failing water heater ($1,200–$2,500). These are legitimate asks.
  3. Bucket 3 — Walk away: problems so extensive or expensive that no reasonable credit fixes them (see the walk-away section below).

Then choose your path: (a) accept the property; (b) submit a repair request or credit ask; or (c) terminate within the contingency period and recover your earnest money. You can try (b) first and fall back to (c) — but only while the contingency window is still open.

How to write repair requests that get signed

Sellers reject repair requests for two reasons: the list is too long, or the asks feel arbitrary. Fix both:

  • Prioritize ruthlessly. Ask for 3–7 items, not 30. Lead with safety, structural, and major-system issues. A 25-item punch list signals a buyer who will be difficult through closing; a focused 5-item list signals a serious buyer with real concerns.
  • Specify licensed-contractor completion. Write "repair by a licensed contractor, with paid invoice provided at or before closing" — not "repair the leak." This prevents the seller's cousin from caulking over a plumbing failure. For roof, electrical, plumbing, and HVAC, name the trade explicitly.
  • Require permits where applicable. For structural, electrical panel, or plumbing-stack work, require that permits be pulled and closed. Unpermitted repair work becomes your problem at resale.
  • Set a completion deadline. Repairs completed and documented at least 3–5 days before closing, with your right to re-inspect. Last-day repairs can't be verified.
  • Attach the report pages. Reference the inspector's photos and section numbers. Sellers negotiate faster when they're looking at the same evidence you are.

Repairs vs. credits: choosing the right ask

You can ask the seller to fix problems before closing, or to credit you money (or reduce the price) so you handle them yourself. Each has a place:

  • Ask for repairs when: the issue is a safety hazard a lender will flag anyway (peeling paint on a pre-1978 home with FHA financing, a missing handrail), or when the fix is straightforward and verifiable — a failed water heater, a broken garage door spring.
  • Ask for a credit when: the work is extensive or quality-sensitive — a roof replacement, foundation work, a full electrical panel upgrade. You want to choose the contractor and control the quality, not inherit the seller's cheapest bid. Credits also avoid closing delays from unfinished work.
  • Know the lender's limits: seller credits toward closing costs are capped by loan type (conventional 3–9% depending on down payment, FHA 6%, VA 4%). A repair price reduction instead of a credit avoids the cap but also lowers the appraised-value basis — confirm with your lender that the appraisal still supports the loan.
  • Get contractor bids before you ask. A credit request of "$4,200 based on two licensed roofer bids for the active leak repair" is nearly impossible to dismiss; "we want $5,000 for the roof" invites a counter.

When to walk away

Walking away is the contingency doing its job, not a failure. Consider terminating when the inspection reveals:

  • Foundation failure — significant differential settlement, large stair-step cracks, or bowing basement walls. Repairs run $5,000–$30,000+ and can indicate ongoing soil or drainage problems that repairs alone don't solve.
  • Widespread mold or water intrusion — especially hidden mold inside wall cavities or chronic basement flooding. Remediation of $10,000–$30,000 is common, and the moisture source must be fixed first or it returns.
  • Unpermitted additions or structural modifications — an unpermitted second story, removed load-bearing walls, or an enclosed garage converted to living space. You inherit the liability, the insurance risk, and the resale problem.
  • Failed major systems in combination — a dead roof plus a 25-year-old furnace plus galvanized plumbing past its life isn't one repair, it's a $30,000–$50,000 capital plan on a home you haven't moved into yet.
  • Environmental hazards — buried oil tanks, underground storage tanks, or soil contamination. Cleanup liability can exceed the home's value; this is attorney territory, not negotiation territory.

Run the math coldly: estimated repair costs plus a 20% buffer, weighed against the purchase price and comparable homes without these problems. If the numbers don't work, terminate in writing before the deadline and move on.

What this guide does not cover

This guide explains the inspection contingency in general terms; it is not legal advice and does not replace your real estate attorney. Contract forms, contingency deadlines, earnest-money rules, and "as-is" variations differ by state — the exact language in your purchase agreement controls, so read it with your agent or attorney before the inspection period starts. This guide also doesn't cover new-construction builder warranties (a different process with its own punch-list procedures) or condo/HOA resale document review, which runs on a parallel contingency track. If a seller refuses to negotiate and you believe they've concealed known defects, talk to a real estate attorney rather than relying on the contingency alone.

Frequently asked questions

How long is a typical inspection period?

Most contracts allow 7 to 15 days from the effective date, with 10 days the most common. In competitive markets, buyers sometimes offer 5–7 days to strengthen their offer. Whatever the window, schedule the inspection within the first few days so you have time for specialty follow-ups and negotiation before the deadline.

Do I get my earnest money back if I cancel after the inspection?

Yes, if you terminate within the inspection contingency period and follow the contract's notice requirements — usually written notice delivered before the deadline expires. Miss the deadline and the contingency lapses; you may then forfeit earnest money if you try to cancel. Calendar the deadline the day you go under contract.

Should I share the full inspection report with the seller?

Share the relevant pages that support your repair request, but think twice before handing over the entire report. In some states, once the seller receives the report, they may be obligated to disclose its findings to future buyers — which can help your negotiation (the seller would rather deal with you than re-list with known defects on record) but can also complicate things. Ask your agent about your state's rules first.

Can the seller refuse all my repair requests?

Yes. The inspection contingency gives you the right to negotiate and the right to walk away — it does not obligate the seller to fix anything (unless your state's contract form says otherwise). If the seller refuses, your options are to accept the home as-is, counter with a credit, or terminate within the contingency window.

What's the difference between "as-is with right to inspect" and a full inspection contingency?

Under "as-is with right to inspect," you can inspect and you can walk away, but the seller has no duty to negotiate repairs — the price is the price. Under a full inspection contingency, there's a formal repair-request process: you submit asks, the seller responds, and both sides negotiate within the contract's framework. Know which one you're signing before the inspection happens.