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Inspection Contingency Addendum Template

An Inspection Contingency Addendum is a legal document that allows the buyer of a property to back out of the transaction if they find a defect in the property and notify the seller to fix it within a specified period but fails to do so.

The buyer will typically have up to 14-days to contract an inspector to do a thorough inspection of the house.

Real estate agents recommend adding the addendum as part of the purchase, and the inspection should be carried out as quickly as possible. The time frame is typically included in the agreement.

When writing down the inspection contingency addendum, the following layout must be followed:

  • The addendum will have a well-detailed scheduled timeline of when the buyer would conduct the inspection.
  • List of the types of inspections to be conducted. Generally, the list will include mechanical and structural inspections, especially places with lead and mold. Above all, the building’s location may lead to additional examinations, for instance, heating equipment.
  • Explain how should the seller be contacted if the inspection reveals any issues, such as the seller’s mail, telephone, or fax address
  • The buyer’s negotiation or legal action in case any issues are revealed during the inspection. If any issue arises from the inspection, the buyer can request renovation, repair, or lower the house’s sale price. An inspection report should be presented to the seller, and he/she is entitled to confirm the findings. The seller can also choose to continue or withdraw from the deal.

How to Prepare an Inspection Contingency Addendum

Below are steps that you can use when preparing the inspection contingency addendum:

1. Identify the agreement the addendum accompanies

Start by listing down the agreement this addendum will follow. That should give you a rough idea of what will be included in the ICA.

2. Attend to the inspection checklist

The next step is to list all the common areas where the property is expected to be well-maintained. Afterward, check every section that needs to be inspected during the ICA process. You can also add extra areas that you think will require inspection in the blank space.

Some of the sites that the inspector will check are:

  • Air conditioning
  • Ceilings
  • Floors
  • Basements
  • Electrical wiring
  • General inspection
  • HVAC
  • Foundations
  • Heating

3. Time allowed for inspection (as part of the clause)

The inspection contingency addendum should also include the buyer’s time frame to conduct the assessment. This contract is time-sensitive, and all deadlines should be upheld with utmost urgency, hence the need to list them down.

4. Highlight the party to incur the inspection costs

Here, you should identify what the buyer or the seller will pay concerning the inspection. For instance, the inspection process’s expenses may fall on the buyer’s shoulder; hence, you need to list it down. Typically, there is a deadline for the expected payment and repairs. There’s also a blank space where you can write down the date when a report of all found defects or repairs is due to the seller.

5. Include whether or not the seller should continue

The seller might be concerned about losing a selling opportunity while the house is under an addendum. If the seller continues to advertise the home during this period should also be listed in this section. However, always ensure that this section doesn’t conflict with the agreement affecting this property.

In addition, the report should also include when the repairs are due. The dates or objections to the report should be indicated in the blank spaces. The buyer and seller are also required to come to an understanding on the deadlines.

6. Signatures of the buyer, seller, and agent

Another vital section is listing down the buyer, seller, and agent involved in this contract with their specific signatures. If there are more parties in this deal, they should also be included in this clause. An official signature from each party will activate the agreement.

Inspection Contingency Addendum Templates

Following are the professionally crafted inspection contingency addendum templates that can be downloaded for free:


    Frequently Asked Questions

    What happens if the seller does not sign inspection contingency addendum?

    The contract becomes void and will only be activated when he/she signs. That said, always ensure you talk with the seller if they reject the proposal before sending the real estate down payment.

    How long does a seller have to respond to an inspection contingency addendum?

    Typically, it should be within a few days to activate the agreement. Otherwise, this will slow down the purchase of the house.

    What does Addendum mean?

    Addendum has several meanings but, in this case, it’s an additional document added to the initial real estate purchase contract.

    Types of contingency clauses?

    There are several types of contingency clauses including, Appraisal contingency, Home sale contingency, Financing contingency, and an Inspection contingency

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