How Important is an Inspection Period under a Residential Contract and is it Okay to Waive it?

By: Derek M. Jorgensen Esq.

The Rising Trend of Waiving Inspection Contingencies

In the early 2020s during the height of the housing market, it became more and more common for buyers to “waive” inspection contingencies in order to avoid bidding wars and go under contract for properties they wanted. Since most residential contracts in Florida are “as-is” contracts, does it matter whether there is an inspection period if the Seller is not obligated to make any repairs?

The Unquestionable Value of Home Inspections

The answer is that it absolutely does matter. It is always in a buyer’s best interest to obtain a complete home inspection on the property. The standard length of a Buyer’s inspection period under an “as-is” residential contract is 15 days—although most contracts we see are typically 7 to 10 days. The inspection period is the “free look” period where buyers hire a home inspector to perform a full inspection of the property. If the inspection reveals serious issues or deficiencies with the property, the buyer can cancel the contract during the inspection period in their sole discretion and receive their deposit back. If a Buyer does not cancel the contract during the inspection period, then the contract becomes binding, and the Buyer’s deposit is at risk of being forfeited if the contract does not close.

Negotiating Leverage from Home Inspection Reports

Although Sellers are generally not obligated to make repairs, an unfavorable home inspection report does give the buyer a useful negotiating tactic in asking for repairs or price reductions. The seller can always say no to any requests, but if they do, the buyer may terminate the contract and the seller will have to find a new buyer who might make the same requests.

The Critical Nature of the Inspection Period

The inspection period is the most critical period of the contract for buyers. A buyer should never waive their inspection period unless they have already had an inspection on the property and are willing to move forward. We have had numerous closings where inspection reports revealed serious deficiencies on the property that would require thousands of dollars to fix. Without a proper inspection, a buyer would not know what they are truly buying.

Ensuring a Wise Investment through Home Inspections

A home is the biggest purchase most people will make in their lives. They should always have an inspection done on the property to ensure they are making the right choice when they decide to buy a home.