Here’s When To Walk Away After Home Inspection
Investing in a home is indeed one of the biggest financial commitments. And to that end, you certainly want to make sure it’s the perfect piece of real estate that you’re putting your hands on.
A pre-purchase home inspection is one of those ways you can learn about a property from the inside out. However, it’s also essential to know when to walk away after home inspection.
You see, while an inspection is your chance to know about a property’s hidden issues and bring them to the existing owner’s knowledge, some problems are beyond repair.
In short, it’s better to walk out of the deal sometimes than call on the homeowner to fix the problems or renegotiate the deal.
Now, when it comes to the if and when of walking out of a purchase agreement, it’s common for homebuyers to be puzzled.
Nevertheless, you can rest easy as we’ve compiled everything about post-inspection walkouts. Read on as we delve deep into your options both before and after home inspections.
Can you back out of a house offer after inspection?
As a homebuyer, you might find yourself asking, “Can I back out of buying a house after inspection?”
So before we get into the nitty gritty of situations that call for a backing out, let’s first try to understand what your rights are.
Simply speaking, it is possible to walk away from the deal after an inspection if you find yourself unsatisfied with the report or the homeowner’s response.
For instance, if the owner is unwilling to undertake essential repairs or consider a renegotiation in lieu of the damage, you can certainly back out. Similarly, if the home has damages or problems that can’t be fixed reliably and permanently, it’s time you take back your offer.
But to be able to back out of a real estate deal or even conduct an inspection, it’s essential you include an inspection contingency clause in the buy-sell agreement.
Let’s see what this clause is all about and how you can benefit from it.
Inspection contingency: Your legal remedy for backing out after home inspection
An inspection contingency, also called due contingency, is a legal clause included in real-estate buy-sell agreements. And it is this clause that allows you to hire a professional home inspector and get the property thoroughly inspected in a specified time frame.
Also, the clause allows buyers to back out of the purchase offer without paying any penalty if the inspection finds major defects.
Here are some rights that an inspection contingency clause offers to homebuyers:
- Pre-purchase home inspection by a licensed inspector.
- Reasonable requests after home inspection Service involving repair of damages from the existing homeowner’s end.
- Reasonable request regarding renegotiation of the deal in an event where the owner fails to address the problems.
- Right to walk away after a home inspection.
Nonetheless, it is important to know that you can only use the clause in unforeseen situations, such as irreparable damage or significant safety issues, among others.
When to walk away after home inspection?
A home may appear in tip-top shape from the outside and might even be promoted as prime real estate in the area. However, it is always possible that the property has some significant issues lurking under its surface.
For instance, Realtor Magazine studies suggest that 65 percent of all newly constructed homes undergoing inspection discover some issue or another.
Moreover, the same studies also found that 24 percent of newly purchased homes didn’t even pass the inspection threshold for safety and functionality.
Meaning it is of foremost importance to know when to walk away after home inspection by involving the contingency clause.
Now, if you’re wondering what should be your reasons not to buy a house after inspection, we’ve put together a complete list of red flags that call for a walkout. So let’s have a look up close.
1. Foundational problems
The foundation is, without a doubt, the most critical component of your home. That’s because not only does the entire structure stand on the foundation, but it also relies on it for safety.
In fact, it’s for this reason that the foundation is among the first things to be inspected during a home inspection.
So, no wonder why underlying foundational problems are a major alarm bell at the time of pre-purchase inspections.
But not all foundational issues should concern you.
Take, for instance, foundational shifts and changes that happen over time. This doesn’t endanger the building in any way and is considered mostly safe.
However, problems such as small or big cracks, water seepage or penetration, foundation damage, etc., are worrying signals.
We suggest you consult with the home inspector to determine whether these problems are repairable. Also, if these issues are too complex to fix, it makes sense to walk away from the deal.
2. Water-induced damages
Problems arising out of water leaks or infiltration are among the most common issues detected during a home inspection. And even though water isn’t the number one enemy of your home, it’s a sign of some major hidden problems.
For instance, seepages can result from broken or faulty water supply, drainage, and sewage lines. Also, faulty or outdated plumbing and leaking water tanks, among other factors, can be to blame.
Now, these problems don’t pose a significant concern and can rather be fixed reliably to last for decades.
But water damage can also be a result of exposure to elements, which can, at times, be a huge problem. You see, not only does this let water, air, and moisture enter your home, but it also risks structural damage.
As such, it is a reasonable ground for backing out after home inspection.
3. Termite infestation
A termite-infested home can be your biggest nightmare as it can result in fat check losses and might even damage your home big time.
So, can you fix the problem arising out of termites, and more importantly, should you walk away from a house with termites?
To start with, you can detect termites and quantify the extent of losses they’ve caused during home inspection.
However, the only reliable way to know the true extent of termite infestation and damage is by removing all the finished materials in the home. And that is something that home inspections typically don’t include.
Furthermore, even if you’ve got to the bottom of the termite problem, an effective termite treatment can cost you another $1000.
In short, buying a home with termite issues is undoubtedly a risky endeavor and can cost you dearly. Thus, it’s best to walk away from such a home rather than trying to fix it.
4. Electrical problems
Did you know that home fires, on average, account for 51,000 fire accidents every year?
The reasons range anywhere from faulty electrical wirings to lack of safety measures to outdated wires and more.
So don’t be surprised if your home inspector advises you against buying a house with electrical issues.
Electrical problems can manifest in different forms during an infrared thermography home inspection, including loose hanging wiring, taped wires, DIY or unprofessional electrical additions, etc. Also, signs of previous fire-related damage covered up with a fresh coat of paint are a huge red flag.
Fixing electrical problems effectively after an inspection isn’t cheap either, and your bills run into thousands of dollars.
And the worst part is that you’ll always be at risk of major electrical or electricity-related accidents. That’s because there’s no guarantee of 100 percent safety unless you get the entire electrical system professionally replaced.
Meaning it’s best to back out of the deal if you spot major electrical problems during the inspection.
5. Shady or illegal home additions
It is not uncommon for homeowners to upgrade their homes over time for convenience and comfort. In fact, in 2022, over 55 percent of homeowners reported having renovated their homes to some extent.
As such, home additions are really a problem when you’re purchasing a previously owned home.
But that doesn’t mean you shouldn’t be on the lookout for upgrades that are shady or don’t meet the local code requirements.
For instance, your home inspector might detect such additions that violate building codes. And not only do such upgrades bring hefty county-imposed penalties, but they also risk the safety and well-being of residents.
So, if you’re wondering when to walk away after home inspection from such properties, you should do so the moment you spot an illegal upgrade.
6. Roofing issues
Roofing makes up about 40 percent of a home, which means it should be a priority during home inspections.
Now, if damages are detected within the roofing system, this could be a sign of some major problems with not just the roofing but also the entire building. Also, fixing these problems can be very expensive and time-consuming.
Similarly, the inspectors can also detect aging roofing or roof shingles nearing the end of their service life. This is especially true for the older homes dating back to two decades or more.
And in such a situation, replacing the entire roofing can break the bank. Also, the seller not willing to negotiate after inspection will only worsen the deal.
As such, backing out after home inspection might be the best course of action in these circumstances.
7. Mold detection
A home inspection also offers a chance to detect the extent of mold in a home, among other things.
However, the presence of mold shouldn’t be reason enough for you to cancel the deal altogether. More so, you can find traces of mold in the best of homes in perfect shape.
But there are some exceptions as well.
For instance, if you discover some major damage caused by mold or potentially harmful mold, such as black mold, it’s best to walk out of the deal.
8. Problems with sewer lines
Issues with the sewer lines are commonplace in old homes. Herein, corroded or clogged sewer lines cause most of the problems.
Seeking a sweater system repair or a renegotiation of the deal from the seller is among the reasonable requests after home inspection.
However, if the seller is willing to act on either of the requests, you should definitely back out of the purchase. That’s because fixing the sewer issues at your own expense can be a costly affair.
9. Significant damages
Apart from the above issues, if you notice major damages such as cracking walls and floors, windows and doors not closing properly, etc., we suggest you walk away.
You see, while cracks may signal a structural problem, doors and windows not aligning are a sign that the home might be sinking.
You might like to read: Mobile Home Inspection Checklist: Everything to Know About
Some FAQs about when to walk away after home inspection:
1. Can seller walk away after inspection?
One of the common queries that homeowners have is whether the seller can back out of the deal after inspection.
A short answer to this is: no, sellers can’t back out or refuse to sell you the property.
However, it goes without saying that the seller might refuse to undertake essential repairs or renegotiate the deal. And that’d leave you with no option but to walk away from the deal.
2. What should be done after an inspection?
If you find yourself asking what to do after home inspection, here are a few things you can do:
- Go through the findings of the inspection report and acquaint yourself with the potential problems.
- Send a copy of the inspection report to the existing homeowner or the seller.
- Bring the issues highlighted in the report to the seller’s notice.
3. What is reasonable to ask for after home inspection?
The inspection contingency clause provides you with various post-inspection options. Here are some things you can reasonably ask the existing homeowner after an inspection:
- A reasonable request to undertake essential repairs and fixes.
- A reasonable request to negotiate the purchase agreement again in case the owner refuses essential repairs.
4. How often do buyers back out after inspection?
As per the National Association of Realtors, about 10 percent of purchase agreements fail after a home inspection.
An overwhelming majority of 90 percent of deals still go through after a series of renegotiations. Meaning there’s a good chance your purchase agreement will sail through.
Conclusion
As you can see, the question about when to walk away after home inspection is a complex one with no straightforward answer.
Nevertheless, with our extensive experience in pre-purchase home inspections, we have highlighted some of the major red flags that should alarm buyers. And while these situations don’t often call for canceling your purchase deal, backing out is the right option a lot of times.
Looking for a comprehensive inspection to assure yourself before you purchase a home?
You can get in touch with us!
At Homestead PI, we’re seasoned professionals with over a decade of experience in inspecting a wide range of homes and buildings. So whatever be your inspection requirement, we’ve got you covered.
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