All You Need to Know About Home Inspection Contingency in San Bernardino
San Bernardino’s real estate market is steadily growing. Here, not just the home prices are increasing but also the competitive conditions as it remains an attractive market for first-time homebuyers, families, and investors. Even though there is an increase in property pricing, San Bernardino remains an affordable option within Southern California.
Before you buy a home in San Bernardino, it’s better to conduct a home inspection and get it assessed by a professional home inspector. Most of you might object that you’re already investing so much in buying a home, but now there’s another addition to the expenses. But trust us, it will be worth it, and these few hundred dollars you’ll be spending will lead you to save thousands in the near future (by avoiding costly issues). In fact, don’t forget to add the home inspection contingency clause in the purchase offer before signing off the deal. It’s a crucial step that will have your back even after you have bought the property.
This blog will cover everything that you need to know about home inspection contingency, giving you insights into this very important step in the home-buying process.
What Is A Home Inspection Contingency?
A home inspection contingency is also called a “due diligence contingency”. It is a legal clause that is added to a real estate purchase agreement and gives you (the buyer) the right to conduct a thorough inspection of the property during a specified time. With this clause added to the purchase agreement, you get the right to negotiate with the seller and even cancel the contract, depending on the home inspection results.
An Example of Home Inspection Contingency
The buyer’s offer depends on a thorough inspection that is completed within 10 to 17 days (that is the contingency period in San Bernardino). If the inspection highlights any major issues, the buyer can (within that period) request in writing that the seller either fix the found issues or lower the sales price accordingly. This request doesn’t void the contract. The seller will then have 3 to 5 days (in San Bernardino) to respond to the request and agree to either make the repairs or adjust the price. If the seller chooses to decline the buyer’s request, then the buyer will have 3 days to either waive the contingency, accept the property in its current condition (as-is) or cancel the contract.
If the buyer chooses to terminate the contract, their earnest money and its accumulated interest will be refunded within 48 hours of providing written notice to the seller or their agent.
What Happens If the Buyer Doesn’t Remove Contingency?
An inspection contingency comes with a limited amount of time for the buyer to walk away from the deal. If the buyer chooses to do something beyond that timeframe, then they still get to cancel the contract, but they won’t get their deposit refunded.
Following are other scenarios that can take place if the buyer doesn’t remove the home inspection contingency within the specified timeframe:
Automatic Termination of the Contract
Some contracts specify that if the home inspection contingency is not removed by the deadline, the contract automatically terminates. In this case, the buyer gets a refund of their deposited money.
Seller’s Right to Cancel
If the buyer fails to remove the contingency, the seller may issue a notice to perform, which is a formal request giving the buyer a short period (often 48-72 hours) to remove the contingency. If the buyer still does not act, the seller can cancel the contract and potentially keep the deposited amount.
Extension of the Contingency Period
The buyer can request an extension of the contingency period. This would require the seller’s agreement. Extensions are usually negotiated when the buyer needs more time to complete inspections or negotiate repairs.
Renegotiation of Terms
If issues are found during the inspection and the buyer has not removed the contingency, the buyer and seller might renegotiate terms. This could involve the seller agreeing to make certain repairs, reduce the sales price, or provide credits to the buyer at closing.
How to Waive A Home Inspection Contingency
San Bernardino home buyers feel immense competitive pressure when they’re buying a home. This often leads them to waive the home inspection contingency. Even though this does bring a fair share of challenges, still, if you’re onto waiving a contingency, you need to be sure that the property is really worth buying, especially considering its condition and the price.
To waive a home inspection contingency in San Bernardino, you must follow a specific process to ensure your decision is formally documented and communicated. First, you should review the purchase agreement and get an understanding of the terms and deadlines related to the inspection contingency.
After conducting the inspection within the agreed timeframe (if you choose to), you should consult with your real estate agent to assess the implications of waiving the contingency. You will then complete the California Association of Realtors (CAR) “Contingency Removal” form, indicating your decision to waive the home inspection contingency.
Once the form is accurately filled out and signed, it must be submitted to the seller or the seller’s agent before the deadline. The real estate agent will typically handle this submission and confirm receipt. By waiving the inspection contingency, you agree to proceed with the purchase of the property in its current condition, accepting any potential defects or issues. This process helps make your offer more attractive in a competitive market but removes your ability to request repairs or negotiate price reductions based on inspection findings. So, we won’t recommend waiving the home inspection contingency.
Conclusion
If you intend to buy a property in San Bernardino, we recommend getting the home inspection contingency as part of your home-buying process. It offers several benefits that basically safeguard you in the home-buying process.
With the assistance of a professional home inspector, you get to examine the property from the inside out, looking at its true condition, just not its “appeal”. This also helps in identifying any defects or issues that might not be visible during a casual walkthrough. These issues can be as severe as structural problems or as minor as loose handrails, but you will know it all.
With the inspection report, you can then make informed decisions, request necessary repairs, or negotiate a lower purchase price based on the findings. If significant problems are uncovered, the contingency gives you the option to back out of the deal without risking your money.
It’s fair to say that a home inspection contingency protects you from unexpected expenses and ensures you’re fully aware of the property’s condition before finalizing the purchase.
Ensure your investment is sound with Elite Commercial Inspections. Our expert team provides thorough and detailed inspections to identify any issues, giving you the confidence to make informed decisions. Protect your property and your peace of mind. Contact Elite Commercial Inspections today to schedule your inspection and secure your investment!
