What Is An Inspection Clause In A Real Estate Deal?

Sunday May 14th, 2023


Buying a house can be an exciting but stressful experience, especially if you are new to the real estate market. One crucial aspect to understand is the inspection clause in a real estate deal. An inspection clause can protect you as a buyer and provide you with important information about the property you are purchasing. In this article, we will discuss the inspection clause in real estate and what it means for both buyers and sellers.

What is an Inspection Clause?

An inspection clause, also known as a due diligence contingency, is a standard provision in a real estate contract that allows the buyer to conduct an inspection of the property before closing. This clause provides the buyer with a specific period, typically 7-10 days, to conduct an inspection of the property with a licensed inspector of their choice. During this period, the buyer can negotiate with the seller to address any issues or concerns that are identified during the inspection.

Why is an Inspection Clause Important?

Buying a house is a significant investment, and an inspection clause can help ensure that you are making an informed decision. A professional inspection can reveal any hidden issues with the property that may not be visible during a walk-through. This could include problems with the foundation, roof, plumbing, electrical systems, or pests. The inspection clause also gives the buyer the opportunity to request repairs or ask for a credit to offset the cost of repairs before closing. In some cases, the inspection can reveal major issues that may cause the buyer to reconsider the purchase altogether.

What Happens if Issues are Found During the Inspection?

If issues are found during the inspection, the buyer can request that the seller make repairs or offer a credit to cover the cost of repairs. The seller may choose to accept, reject or negotiate the request. If an agreement is reached, the seller is responsible for completing the repairs before closing or providing a credit at closing to the buyer. If the seller refuses to make repairs or offer a credit, the buyer has the option to back out of the contract and receive a full refund of their earnest money deposit.

What Happens if the Inspection Reveals Major Issues?

If the inspection reveals major issues that were not disclosed by the seller, the buyer may have the option to cancel the contract or renegotiate the terms. In some cases, the buyer may decide to move forward with the purchase but ask for a lower price or additional concessions from the seller to offset the cost of repairs.


An inspection clause is an essential component of any real estate contract. It provides buyers with the opportunity to have a professional inspection of the property and negotiate repairs or credits with the seller before closing. As a buyer, it is important to review and understand the inspection clause and have a licensed inspector conduct a thorough inspection of the property.

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