Can I back out of home purchase after inspection?

Are you currently purchasing a home or starting the process and wondering, Can I back out of Home Purchase after Inspection? In this video, I discuss backing out after home inspection and why your home inspection should be completed during your contingency period so you don’t risk losing your earnest money deposit if you decide to cancel escrow.
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What is a home inspection?
The home inspection is a thorough review of the property and all of its major systems including electrical, plumbing, HVAC, pool, spa, roof and much more performed by a home inspector.. The inspection is completed early in the escrow period while the buyer is within their contractually agreed contingency period (typically the first 17 days of escrow in California). The home inspection is not required but is highly recommended to anyone buying a home.
Can I back out of buying a house after inspection?
Yes in most cases as long as you performed your inspection during your contingency period and still have those contingencies in place. It’s extremely important that you do your home inspection during your inspection period in the real estate purchase agreement so that you don’t risk losing your earnest money deposit (emd) if you cancel escrow after doing the home inspection.
In California, the Real Estate Purchase Agreement is written to allow you 17 days to do all of your inspections during the home buying process. As long as you perform your home inspection during this period then you should have no issues backing out of a home purchase after inspection.
In fact, a buyer can back out back out for any reason during that 17 day contingency period and no risk losing their deposit as long as your contingencies are still in place.
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[@XrazorstylistXOXO]

Seller didn’t want inspection. I said no deal without inspection. Seller said ok, inspection failed. House not grounded. Outlets looked new with the button to trip. There was a few other things that didn’t pass but more minor and a little out of the ordinary things also. Looked more detailed at things and everything was done not correctly. From the trailer kitchen cabinets and very little sink with bathroom knobs in the kitchen. To the 30 yr old furnace hooked up to the 75 year old furnace that needed replaced. So I backed out of the deal. So worth it to test. The house was too small to get a couch and full bed in door. I measured failed

[@WilChu]

The process seems backwards, is there a reason why the inspection isn't completed prior to an offer being extended - like with a used car purchase?

[@aaronstansk-popdreamcatche4279]

Just got back the inspection for a house we liked. It showed us old knob and tube wiring, no ground on any outlets, and likely would need re-wiring top to bottom. Then the basement has moisture issues, with a water heater rusted and the support posts, too. There's other issues. We put in our contract that the sale was based on the inspection. I can't see the buyer willing to make repairs, and giving us a few points on the closing wouldn't even reach what we'd likely be spending. So, we're walking away. Hard to do, but it would be a money drain for years to come.

[@agood1]

similar issues with our inspection! Seriously, why bother painting the damn place when the whole foundation needs redone, and rewiring. Walls will have to be busted into anyway

[@losheroes6076]

The i got inspected has mold all around the walls of the basement needs a new roof. Has beehives living inside the windows and making their way inside the bedroom and kitchen. The foundation has 2 cracks. The sellers i guess tried fixing it but the cheap way. They also tried to hide a patch job on a roof leak by putting a old big carpet in front of it smh

[@grumpyschnauzer]

In our scenario the Inspector did not detect mold. We found mold at the final walk thru (after some rain). Pictures in the listing show a new post on the porch but old Google images show a moldy post. Also, seller did not satisfy his contractural agreement to remove metal sheds in the backyard. These sheds were present at the time of the walk-thru. We are heavily considering backing out after this seller was also doing everything possible to stall the sell.

[@annasobilo-ryzner6684]

Did you get your earnest money deposit back?

[@Parahax420]

Currently in escrow, we have an inspection contingency. Inspection revealed plumbing, flooring and roof in very bad condition. I want to back out, my realtor doesn't want to lose this commission. Saying it might be too late to back out. She's not being truthful correct? Thank you 🙏🏻

[@conanbeagle9251]

Hello, I was looking at a reo home in another state with the listing agent which said the bank would not allow for contingencies since it was sold as is but once I gave my EMD and submitted my offer I could do an inspection but if I wanted to back out I would not get my EMD back. This scared me... No contingencies allowed? Couldn't I be forced or sued into closing if I backed out without a contingency or way out in the contract?

[@joejesus9902]

Very informative. Thank you 🙏

[@JebSmith]

Glad it was helpful!

[@TraditionalWIns]

Buyer did not release contingencies and decided to back-out after the 17 day period but selling agent is giving a hard time with emd. what can be done? It there a formal timeframe to release emd?

[@moonkitten5934]

Thank you so so much. We have been looking for a home and thought we found one until I met with the spectator and two main things stuck out aside from the other minor things . The oven was off by 10 degrees cooler, no vent on top to extract the smoke . Second , he found mouse traps in the attic. Even though he said no droppings that was enough for me to say heck no. We just gave down the escrow two days ago can we back out and get our mo why back?

[@JebSmith]

You should be able to, yes. Not sure how you're contract reads in your state but CA you'd be fine

[@trinifirst6702]

You met with the SPECTATOR??

[@Divided_Highway]

In NJ. Inspections completed within timeframes. Variety of problems (possible mold in basement, non-fire rated door, water in basement, some wiring not up to today’s standards, etc.). Sellers declined to address. We did not agree to terms so, as the contract reads, we would receive our earnest deposit ($3,000) back and the contract would be voided. They refused to release earnest deposit so contract was never voided. They sold house to another buyer while still under contract (because we did not agree to terms and the contract was not voided). They now want to settle for half, but would it be worth it to go to small claims court?

[@JebSmith]

Honestly, that's a question for your broker. My guess is you have a viable case

[@gamerwhiz6847]

They sound really sneaky selling to another buyer while keeping your EMD & hanging on to the contract!

[@bpinoy97]

We decided to back out after the home inspection due to water marks potentially from seepage. It’s been 24 hours and the sellers haven’t signed the mutual release document. How long should we wait for them to sign it? What if they don’t want to sign it?

[@JAP92]

What happens if you go past your contingency date and haven’t yet removed it? Are you still able to withdraw or would you be breaching the contract?

[@JebSmith]

In theory you should still be able to cancel the contract if you have not released the continuances

[@JAP92]

@@JebSmith I appreciate the feedback! I wasnt expecting a reply this fast but you’ve gained a new sub. Thank you!!

[@aub5020]

@@JAP92How did it go? Were you able to remove your contingency without breaching the contract? Did you have to pay any penalty fees?

[@jkbc]

what if the seller says they are willing to fix everything and say I am the buyer feeling uncomfortable to move forward purchasing the home due to all the known issue from the inspection reports, can I still back out?

[@JebSmith]

Yes, you should be able to as long as you still have that contingency in place. Talk to your Realtor, they should be able to guide you.

[@jkbc]

@@JebSmith Thank you Jeb for responding quickly, really appreciate it! As a first time home buyer, sometimes I find myself in the middle of the road filled with anxiety to decide whether I have a good or bad deal of the home that I am interested in. The home inspection result is a deal breaker and unfortunately this inspection can only be done after I signed a contract.

[@gamerwhiz6847]

@@jkbc Yes but you don't have to go through with the contract if you don't sign the Inspection Contingency Removal.

[@rafaelsandoval7077]

Please help I'm in the middle of purchasing a home the inspector found sagging roof 2 inches and a half puncture shingles the valley of lineman with no drop in the middle of the roof where water water has potential of settling we asked for the seller to make those repairs in written he turns around and hires a buddy to go inspect the roof why would we needed inspected when we're asking for him to fix it and refuses to do so his buddy is saying that there's no structure damage that everything is an order ended the roof has no leakage when the drywall in the garage is completely cracked with moisture do we lose our earnest money if we back out the house already has been appraised as well what happens in the situation please help

[@JebSmith]

As long as you still have your contingencies in place, you should be able to back out. You could also have your own person out there to inspect it to see if there's a different opinion and from there do another request for repairs or a credit to fix

[@rafaelsandoval7077]

We did send somebody else out there to inspect the damage on the home and they'd be a roofer and he told me they had needed to be repair and he said that he guarantees me that that Valley will leak because there's no way the water can go down so he gave us a estimate to fix everything for 6000 we asked the seller to go halfers on it she's refusing he doesn't want to fix anything but he did sign the contract saying that he would get it inspected and get it repaired but the person that sheet contract is his friend of his she called me personally his friend and said that he knew him for a couple of years so now I really state agent is saying that he doesn't want to fix stuff is unnecessary that as long as he's lived there than the water the roof never leaked I'm not settling for his word he's refusing to make repairs if we back out do we lose our earnest money

[@gamerwhiz6847]

@@rafaelsandoval7077 The best route to take if you have a seller who doesn't want to make repairs is to ask for a credit off the listing price so you can hire your own licensed contractors to make them. If he doesn't want to credit you and you do not want to make the repairs yourself you can get your earnest money back as long as you did not sign the Inspection Contingency Removal (CR). CR allows buyer to back out if inspection is not satisfactory. Your agent should have informed you of that & negotiated with the seller's agent to get the repairs done and not submit your CR if you are unhappy with seller's response to repairs request.

[@robertedwardclarkjr7329]

Do the buyer and seller have to sign the cancellation in order for the cancellation to be official? Because I already signed it but the seller hasn’t. There property still shows pending.

[@JebSmith]

Yes, the seller should sign the cancellation as it will be needed to get your deposit refunded.

[@karasellars6697]

I am desperately trying to back out of a contract currently, did so AFTER inspection and my contingency period is up in two days. Seller, his listing agent and his attorney are giving me issues. I let them know and signed the release that I wanted to back out over a week ago and he still hasn't let me go. They're saying its breach of contract. Can you please help with advice?

[@losheroes6076]

Did it work out for you?

[@jessicarivera8833]

I am curious as well if you were able to back out Kara Sellars?

[@karasellars6697]

Thank goodness I was! A lot of kicking and scratching on both ends and they wound up taking my good faith deposit.

[@sportsoccer1015]

Hi Jeb, thank you so much for your video! If a seller requests to only have a 10 day buyer inspection contingency, does that mean that the inspection and any negotiations have to happen within the 10 days? Or that the inspection has to happen within 10 days, and after the 10 days you can no longer back out, but negotiations can still occur?

[@JebSmith]

You need to do inspections and release that contingency within that time frame so you'd want negotiations final but if you are negotiating and going back and forth, they can't ask you to remove it.

[@yukisnowsnowsnow496]

can licensed inspector inspect houses you buy or spouse buy?

[@JebSmith]

Yes of course

[@rudymedina4508]

I have a question and hopefully you could answer it for me, I went into escrow for this home, I did inspection and appraisal but I wasn't satisfy with the home, I talked to my agent and told her I wasn't satisfy and she said I couldn't back out because I would lose my emd, I asked about contengies and she said I signed a form releasing them which was on the 3rd of this month, thats when I deposited the emd. It wasn't until the 4th where I had the inspection done. Is she lying to me trying to get me to buy the house? Is there such a contract that you go into escrow without contingencies? Thanks in advance.

[@JebSmith]

You should have contingencies in place that allow you to do an appraisal and a home inspection unless you shortened them or waived them somehow. What state are you in? If you're in California, send me a copy of the contract and I'll take a look at it

[@rudymedina4508]

@@JebSmith I checked the contract, it's the c.a.r. that they use here in California, I'm using an agent from San diego. The contract doesn't mention anything like this, only contingency release that I signed was for appraisal.

[@JayTee_213]

Is there any free mediation in CA? my deal fell thru and seller refused to return my earnest deposit?

[@JebSmith]

If you both signed the arbitration/mediation clause in the contract then they have to mediate. That said, your deposit should be at the escrow company as both parties have to agree to release it before it can be sent to the seller

[@JayTee_213]

@@JebSmith thank you!

[@mariavera5914]

Kdkz