How a Home Inspection Contingency Works in Washington

May 17, 2024
Last updated:
May 17, 2024
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When buying a home in the state of Washington, you have a lot of choices as to how you want to present your offer. One of those choices has to do with something known as the home inspection contingency.

Like other types of real estate contingencies, the home inspection contingency essentially gives you a way to back out of the deal without losing your earnest money.

But in a competitive Washington real estate market, having too many contingencies in your offer could also make it harder to compete with other buyers.

As always, knowledge is your best ally, which is why we’ve put together this home inspection contingencies buyer guide. So let’s take a look at how a home inspection contingency works in Washington, and what pros and cons they bring.

How Real Estate Contingencies in WA Protect Buyers

In a real estate purchase agreement, a contingency is a clause that outlines a specific condition that must be met before the sale can be finalized.

These conditions act as a sort of “safety net” for the buyer. If the contingency isn’t met within a designated timeframe, the home buyer can back out of the contract without sacrificing their earnest money deposit.

In Washington, it’s customary for a home buyer to make an earnest money deposit when submitting an offer to buy a house. This shows the seller that you are serious about buying the property.

But if you back out of the transaction for some reason that’s not specified in the contract, you could end up losing your deposit money. A contingency could prevent such a loss.

There are several different types of contingencies used by buyers and sellers in the state of Washington. But here, we will focus specifically on the home inspection contingency in Washington.

The Home Inspection Contingency

As you probably already know, a home inspection in Washington is a detailed examination of a property’s condition conducted by a qualified professional.

The inspector looks for any potential problems with the house, from the roof to the foundation, including the plumbing, electrical systems, and major appliances. He or she will compile these findings into an inspection report and present it to the home buyer.

What you might not know is that home buyers can also include an inspection contingency within their purchase offers, to give themselves an added layer of protection.

A home inspection contingency allows the buyer to schedule a professional inspection of the property to uncover any major issues.  If the inspection reveals significant problems, the buyer has the right to:

  • Terminate the contract and get their earnest money deposit back.
  • Negotiate with the seller for repairs to be made before closing.
  • Negotiate a lower purchase price to reflect the cost of repairs.

The home inspection contingency gives you (the buyer) more options as to how you want to proceed in different scenarios. For example:

  • No major issues found: the buyer can move forward confidently.
  • Minor issues found: the buyer may request repairs or negotiate a lower price.
  • Major issues found: the buyer has the right to terminate the contract.

Waiving Contingencies for a “Cleaner” Offer

Real estate markets across the state of Washington can be highly competitive at times, especially in the Seattle metro area. In such times, home buyers often have to be more aggressive with their offer strategies, to edge out competing offers.

For example, home buyers will sometimes waive some or even all of their contract contingencies, to make their offers more appealing to the seller. A “cleaner” offer might have a better chance of getting accepted than one with more strings attached.

But like almost everything in the real estate world, this brings pros and cons:

Pros: In a competitive real estate market, waiving the home inspection contingency could strengthen your offer from the seller’s perspective. If another buyer offers a similar amount but includes more contingencies, your offer might rise to the top.

Cons: Waiving the inspection also exposes you to more risk. Without having the home inspected, there’s a chance you could inherit unknown and potentially expensive repairs. Major issues with the property’s foundation, roof, or other core systems could deplete your resources or even lead to financial strain.

Removing the Contingency When You’re Satisfied

If you do decide to use an inspection contingency when buying a home in Washington, you also need to have a plan for removing it.

In a typical real estate transaction with contingencies, the home buyer can remove a contingency if and when they are satisfied with the outcome. This allows the transaction to move forward, which is what both sides want.

For example, if a seller agrees to repair something highlighted in the inspector’s report, the buyer could then remove the contingency so the deal can proceed. This can be done simply by signing and submitting a contract addendum.

In Washington, home buyers typically include a specific timeframe with any contingencies they add to the contract. Most buyers give themselves 7 to 10 days to have the property inspected, review the report, and make a decision regarding the sale.

But this timeline can vary based on the circumstances.

Inspections Aren’t Required in Washington, But…

Home inspections are not required in the state of Washington. If you’re going to use a mortgage loan to buy a house, your lender will most likely require an appraisal to determine the value. But the inspection is a separate process entirely—and it’s your call.

The same goes with the home inspection contingency. You could have the home inspected without including a contract contingency, or by including such a clause. It’s up to you.

But these choices require careful consideration. During a home purchase, inspection contingencies can affect everything from your wallet to your negotiating ability. So you want to make an informed decision based on careful forethought and planning.

If you’re wondering how a home inspection contingency works in Washington, wonder no more. Your real estate agent will help you navigate your offer to ensure it includes all the necessary contingencies to protect you, including the home inspection contingency.

Need financing?

If you’re thinking about home buying in Seattle or any other center in Washington, be sure to partner with a seasoned mortgage company first, like Sammamish Mortgage. Start your home buying process off on the right foot by getting pre-approved to determine how much you can afford in a home purchase. Get in touch with Sammamish Mortgage and get a rate quote today!

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