Home Inspection Contingency

Understand how a home inspection contingency protects Canadian homebuyers and what it covers during the offer and negotiation phase.

Home Inspection Contingency

May 22, 2025


What is a Home Inspection Contingency?

A home inspection contingency is a condition in a real estate offer that allows the buyer to back out or renegotiate based on the results of a professional home inspection.

Why Home Inspection Contingencies Matter in Real Estate

In Canadian real estate, this contingency is a vital protection for buyers. It gives them the right to hire a licensed inspector to assess the property’s condition, including its structure, systems, and potential issues.

If significant problems are found—such as foundation cracks, plumbing leaks, or electrical hazards—the buyer can:
  • Withdraw their offer
  • Request repairs
  • Renegotiate the purchase price
Typical inspection areas include:
  • Roof and foundation
  • Electrical and plumbing
  • HVAC systems
  • Insulation and windows

Without this clause, buyers risk inheriting costly repairs or defects. In hot markets, some buyers waive this condition to strengthen offers, which increases risk.

Understanding the importance of a home inspection contingency helps buyers make informed decisions and avoid unpleasant surprises post-closing.

Example of a Home Inspection Contigency

During an inspection, a buyer discovers mold in the basement. They invoke the home inspection contingency and walk away from the deal without penalty.

Key Takeaways

  • Allows buyers to assess property condition.
  • Can trigger renegotiation or withdrawal.
  • Covers structural and system inspections.
  • Waiving it increases risk of hidden issues.
  • Recommended for all home purchases.

Related Terms

Additional Terms

Sales-To-New-Listings Ratio (SNLR)

The Sales-To-New-Listings Ratio (SNLR) is a real estate metric that compares the number of homes sold to the number of new listings in a given period.. more

Market Type

Market type refers to the classification of a real estate market based on supply, demand, and pricing trends, typically categorized as buyer’s,. more

Outparcels

Outparcels are stand-alone commercial properties located near or on the outer edge of a larger retail or shopping centre complex.. more

Halo Effect

The halo effect in real estate refers to the positive influence that a popular or high-end development has on the surrounding property values and. more

Sump Pump

A sump pump is a mechanical device installed in the lowest part of a basement or crawl space to remove accumulated water and prevent flooding.. more

Structural Integrity

Structural integrity refers to a building’s ability to withstand its intended loads without failure, deformation, or collapse during its lifecycle.. more

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