Inspection contingency
An inspection contingency gives the buyer a defined period to have the property professionally examined, and a defined right to act on what the inspection finds.
Of the standard contingencies, this is the one that most often gets used, and the one whose deadline most often gets missed.
What the period has to accommodate#
More than the inspection itself, which is the mistake in short windows.
The sequence is: schedule an inspector, have the inspection, receive the written report, and then — if the report flags something — get a specialist to assess it. A structural note, a sewer scope, a roof evaluation, an electrical assessment. Only then can a repair request be written and submitted.
A ten-day window handles this comfortably. A three-day window covers the inspection and nothing after it, which means the buyer must respond to a report they have not been able to investigate.
Scope of the exit#
How the clause is drafted determines what the buyer can actually do.
Some versions give a broad right to cancel where any finding is unsatisfactory to the buyer — effectively a due diligence period.
Others limit the right to defects above a stated cost threshold, or of specified types. Under those, a long list of small problems may not permit withdrawal at all.
Reading which version is in the contract matters before the inspection, not after.
Repairs, credits, or price#
Three ways to resolve findings, and they are not equivalent.
Repairs by the seller before closing put the work in the seller's hands, which means their choice of contractor and their standard of finish.
A credit at closing gives the buyer the money and control over the work, and is often the cleaner outcome — though loan programmes cap seller credits.
A price reduction lowers the loan and the basis, and does not put cash in the buyer's hand for the work.
Sellers frequently prefer repairs, buyers frequently prefer credits, and the choice is negotiable.
Why it matters most on distressed property#
Minnesota's seller disclosure obligations do not apply to foreclosures, and a lender selling a foreclosed house has no knowledge to disclose in any case.
That removes the entire information layer a normal transaction provides. Nobody is telling the buyer about the basement, the roof, the furnace or the water staining, because nobody involved on the seller's side knows.
On those purchases the inspection is not one protection among several. It is the only one, and using it fully within the window is the whole of the buyer's due diligence.
Invoking it#
In writing, in the contractual form, before the deadline. A phone call to an agent is not notice, and a request submitted a day late is a request the seller can ignore while keeping the earnest money in play.