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Withdrawing An Offer After A Building Inspection

A building inspection is a process of examining the house’s physical condition and its systems and components. The goal is to identify problems and make recommendations to help improve the home’s upkeep. A home inspection is crucial because it can prevent expensive repairs or replacements of major components that may be needed in the future.

A professional home inspector will visually inspect a house for structural issues, plumbing, electrical, Heating/cooling systems, and other factors that may affect a residential property’s value or opertaion. It’s a comprehensive process to make sure that the house is in acceptable condition.

What Is The Building Inspector’s Role?

Below, you will learn about the role of a building inspector in structural observation and evaluation of the property site. To ensure you select a building inspector you can trust, here are some factors you should consider:


Codes and regulations are necessary to ensure that construction projects meet safety and compliance standards. A major objective of the codes and standards is to set minimum requirements for the level of safety, health, amenity, accessibility, structural compliance, and sustainability. They also help to prevent fraud, such as making sure the contractor has the right permits for work being done.


A qualified building inspector should have experience in the construction industry or equivalent education or work experience in engineering or architecture.

Building inspectors with these qualifications will be able to inspect and assess buildings and other structures and provide their clients with an accurate estimation of the property’s condition. Highlighting any safety hazards, major or minor defects.


A qualified building inspector will have knowledge of principles and practices on structural observation and be able to effectively evaluate the dwellings condition. This will include knowledge of materials used in construction, methods used to measure loads, design loads, design considerations, and load transfer mechanisms between structures and supporting soil.

When Does A House Need An Inspection?

The first step to getting a home inspection is finding the right inspector. A good inspector can help you identify any safety or code violations.

A building inspection should be carried out prior to purchasing or during construction and every 5 to 10 years after initial inspection.  The cost of building inspection varies depending on the type of inspection, size of your property, and the inspector’s experience level.


Pros of prior inspection

  • You may run into issues that will prevent you from going ahead with purchasing that particular property before investing a large amount of money.
  • Not all offers must contain an emergency inspection agreement. By performing a building inspection in advance, you can ensure that you don’t end up in a home with multiple costly problems. You will have all the facts before you settle or bid on the property.
  • Even if the seller has already done a home inspection, it never hurts to have an independent inspection. This further ensures that you have the correct information before you make an important decision. Getting a second opinion can be a turning point in your decision-making process.
  • If you choose not to make an offer, you can avoid other costs arising from the contract. Paying out a few hundred dollars more is a valuable investment.

Cons of prior inspection

No contract in place

Without a contract in place, the seller may go with another buyer while in the inspection process. Of course, it depends on whether the house is in high demand or not or whether it is in a popular location.

After an offer is made

After making an offer, you may still not be able to reconcile with the seller. This means that if there are possible problems, they can choose to do nothing. In turn, this may result in another expense for you as the buyer. The majority of the time, the purchase contract will allow you to “get out” if you decide that the home is not suitable for you after completing the home inspection.

Read the purchase contract

First of all, it is essential to carefully read the purchase contract and determine the deadline for completing the inspection. Assuming you are still within that time frame, you should then read the contract to determine how you should tell the seller that you want to withdraw from the contract. If yours looks like a typical home purchase contract, you should notify the selling agent in writing before the cooling off period expires.

However, some states will have specific forms for this issue that you can use to notify the seller. If you communicate your intention to the seller before the deadline and according to the contract terms, you should recover your entire deposit. Still, if you have exceeded the inspection deadline, your deposit may not be refundable.

The best thing about the urgency of a home inspection in a purchase contract is that it is a highly subjective contingency in most contracts. Similarly speaking, the buyer most likely has the option of terminating the contract before the inspection expires for almost any reason. This may not be the same with all purchase contracts, so read yours carefully. But if you use a state-approved form to purchase, you will likely be able to terminate the contract before the cooling off period expires for various reasons.

After all, before placing a bid, most buyers only see the house once or twice for a very short period of time. Please note, however, that in tight “seller markets”, the possibility of an inspection condition may be waived, or a home may be sold “as is” with Auction terms.


Pros of inspection after

  • Often when buying a home, you can make an offer conditional on a home inspection.
  • If there is an emergency arrangement regarding the inspection, then you can renegotiate the purchase price and terms of the contract. In the same vein, you could get out of the house completely, depending on the arrangement, of course.

Cons of inspection after

  • Without a subject to building inspection clause in place, you could be stuck with the house you are buying. This includes roofing issues, mould, termites, and any other issues that you may not be aware of at the time of purchase.
  • If the problems with the property are outrageous and you decide to terminate the purchase contract, you will have to pay for your exit. 
  • It only allows you 48 hours after receiving your form 1’s to organise inspection, have it completed and receive and discuss the report with your building inspector.

Buyer Withdrawal Circumstances


Suppose an individual is suddenly out of work. In that case, it is sensible that they’d wish to back out of acquiring debt that they’re not 100 per cent certain they’d be able to pay for in the future. More so if it involves paying a penalty fee or forfeiting their earnest money. After all, how may one decide to pay a mortgage while not on any form of income?


There are many probable reasons why one might not qualify to receive a loan as they need to be pre-approved for a mortgage, there aren’t any guarantees that the investor gives definite approval.

There are many reasons a financial institution might select not to grant a mortgage; among these, unexplained changes within the credit history or employment scenario of the applicant, maybe the lender doesn’t consider the home appraisal, or the house didn’t pass the scrutiny consistent with the bank’s standards.


If the buyer included a finance contingency clause in the agreement, the buyer ought to be able to leave from the deal while not incurring any losses, as long as it’s done before the contingency expiration date.

Property Withdrawal Circumstances


By law, the seller is obligated to disclose any identified property damages or flaws that might probably affect the future price of the aforementioned property. However, if a buyer discovers upon inspection that the seller avoided revealing major damages to the building, they will withdraw the offer.

Additionally, a bank can deny the client funding if the inspection doesn’t meet their inspection requirements.


In this regard, the buyer got the inspection results that required specific improvements, and the seller agreed to perform the necessary repairs. However, once the contingency date arrived, the seller didn’t go with the agreed repairs.

Consequences Of Withdrawing An Acquisition Agreement

Once a buyer decides to cancel the contract, there are often no consequences, however, in the worst-case scenario, the buyer may be sued for not obliging with the agreement.

Suppose the buyer exercises their right to withdraw the offer because the seller fails to satisfy the specifications within the contingency clauses and does so within the established amount of time. In that case, they are under no obligation of forfeiting their deposit money and may walk off from the signed contract with no consequences.

Alternatively, if all contingencies are met within the established time, and there aren’t any valid reasons for the buyer to withdraw from the deal. In that case, they might lose their deposit money– typically a third of the property’s price. This is referred to as liquidated damages, and it compensates the seller for the time the property was off-market.

Buying a home is a big decision. It depends on the conditions surrounding the contract when choosing the right one.

Should You Hire A Professional?

The advantages far outweigh the disadvantages in most cases with a pre-purchase inspection. Deciding to have your home inspected before you bid is usually your best bet.

If you are reading this article and have not yet entered into a purchase contract, take it as a lesson and make sure you read and understand the contract. Some buyers are willing to forgo an unscheduled inspection to get a low-cost home.

This is unlikely to be the best decision for you as a buyer, so make sure you know what you are getting into. Otherwise, your deposit may be compromised if you withdraw due to an object of inspection. However, if you are still unsure, it is always in your best interest to contact a professional to assist you with the process.

Jim's Building Inspections

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