What is an Inspection Condition?

An inspection condition is a clause included in an Agreement of Purchase and Sale that states that the offer is contingent on the results of a home inspection. This clause allows the buyer to opt out of the purchase, or renegotiate the terms of the sale, depending on the results of the inspection.

Why is this term important?

Inspection conditions are important as they protect the buyer in the event that the home inspection uncovers any major issues with the property that will impact the value of the property.

Here is an example:

Let’s say a homebuyer makes an offer for $800,000 on a home and includes an inspection condition. The seller accepts the offer however, after conducting an inspection, the buyer discovers that the roof is in poor condition and this has led to water damage in the attic. 

Since the buyer opted to include an inspection condition, they have the ability to negotiate their offer, or potentially walk away from the home. Without the inspection condition, they would likely have purchased the home as-is and discovered the damage at a later date.

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