What You Need to Know About the Inspection Contingency
Your client has made an offer and it’s been accepted. Whew! Now comes the inspection period. What happens when the inspection report comes back with a not so great grade? Let’s dig a little deeper into the inspection contingency and find out what your next steps should be!
It happens, inspection reports come back less than perfect. Your client wants a reduction in price or for the problems to be fixed before the sale. What do you do?
First, you write the other agent and ask for an extension. Give yourself and your buyers a little time to figure out what they’d like to do about the issues on the report.
Next, write the seller’s agent and let them know your client is going to cancel the contract with a full refund of their deposit if the two parties can’t come to an agreement by a certain date. (These words are extremely important).
This doesn’t necessarily mean you’re going to cancel the contract, but having those words in writing will protect your buyer’s deposit. Be sure to get this to the seller’s agent by the last day of the inspection period (AKA the effective date). Note that even if it falls on a weekend or holiday, it still needs to be done.
Can a seller cancel the contract?
No. Only the buyer can cancel the contract due to the inspection contingency. A seller can refuse to reduce the price or fix any of the issues, and that may end up causing the deal to fall apart, but they cannot back out of the deal due to issues on the inspection report.
As long as you know the dates of your inspection period and what you need to put in writing if issues arise, you can easily protect your buyer’s deposit!
At Dalton Wade we believe that today’s buyers and sellers need a trusted resource that can guide them through the complex world of real estate. With our extensive knowledge and commitment to providing only the best and most timely information to our clients and agents, we are your go-to source for real estate industry insight and advice. Contact us today to learn more!