Backing out of inspection contingency - prior to inspector coming

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Backing out of inspection contingency - prior to inspector coming

Evan Stamps
Investor · San Diego, CA · Member since 2018 · 6 posts · 1 vote

Would appreciate some quick help here - I'm under contract and wondering if I can back out during my inspection period prior to even having the licensed inspector come? My contractor walked the property with me yesterday and we found obvious costly issues that make the home a bad buy and the current tenant gave us insight on big issues with the property. I would prefer not to pay for a professional inspection knowing I will back out anyways. The house is in CT, I know a lawyer is the best answer but any general answer here would help out. Thanks!

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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y

@Evan Stamps - Absolutely, the inspection contingency is a general term however a contractor walk through can qualify as an inspection. Let them know that you had a contractor inspect the property, found clear issues that make this deal not make sense at the current price, and request major concessions or walk away. The house definitely has a right buy number so what's wrong in asking them for a huge reduction? If they say yes, great! If they say no, you were planning on walking away anyway.

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  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    @Evan Stamps - Absolutely, the inspection contingency is a general term however a contractor walk through can qualify as an inspection. Let them know that you had a contractor inspect the property, found clear issues that make this deal not make sense at the current price, and request major concessions or walk away. The house definitely has a right buy number so what's wrong in asking them for a huge reduction? If they say yes, great! If they say no, you were planning on walking away anyway.

    [email protected]781-964-3200Podcast Guest on Show 69 Doors from ONE Real Estate Deal Using Other People’s Money
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Read your contract. This will be specific to that as to whether you need to go through an inspection or not. 

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  • Dustin Allen
    Real Estate Agent · South Lake Tahoe, CA · Member since 2016 · 681 posts · 644 votes
    5y

    @Evan Stamps

    The California RPA allows for the buyers investigation of the property, disclosures and other matters affecting the property. If You inspected the property yourself and found reason to cancel the contract, that is enough to cancel the contract.

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    5y

    Andrew is absolutely correct. In this case your contractor was your inspector. I’ve been my own inspector for my Las Vegas properties. Not because I’m good at it or have any expertise, but because they are relatively new< cookie cutter houses built by large companies in an area not known for foundation problems. 

    Simply point out the problems and present the sellers with the estimate to repair. Im not positive how disclosures work but the seller may also now be responsible for disclosing problems you found to future buyers. 

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  • Sherry McQuageBusiness Member
    Real Estate Broker · Moore County, NC · Member since 2020 · 169 posts · 141 votes
    5y

    I'm not familiar with CT laws or real estate practices there, but in NC you can terminate the purchase during the "Due Diligence" period (you put down DD money to have the specified time...usually up to 3 weeks) for any reason or no reason.  If your contractor and the current tenant showed you enough to make the deal a "no go" for you, then you should be able to terminate the purchase agreement (and only lose the DD money...in NC).

    I like the idea of getting quotes on making the repairs, and presenting (still, within the DD period) the seller with the problems, quotes, and a request to reduce the price by $xyz....or, you could just decide you don't want to deal with the property since it has xyz issues.  Your call.

    The important thing is YOU LEARNED SOMETHING that will help you in all future deals.  I hope you "pay" or at least buy a meal gift card for the contractor...they will remember that you valued their time and will be more likely to help you with a walkthrough again on the next project.

    Don't know how much DD money you put down (and it's gone now), but it's probably a small price to pay to avoid buying a money pit.

    Best to you!

    1Reply
  • Evan Stamps
    OP
    Investor · San Diego, CA · Member since 2018 · 6 posts · 1 vote
    5y

    Thank you everyone for the fast replies. As many said, I was able to back out and still receive my earnest money back. All good! @Sherry McQuage good tip to compensate the contractor!

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  • Bogdan Constantin Stefanide
    Realtor · Norwalk, CT · Member since 2016 · 203 posts · 69 votes
    5y

    Hi @Evan Stamps,

    The best would be to ask your attorney if you can get out or not. I'm assuming you have an attorney that you would use for this transaction?

    Bogdan

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