Who benefits from short inspection contingency periods?

I know I may be stepping into quick-sand with this question, but I am serious. All too often I see buyers forced to use inspectors they do not want to use, or in other ways not be able to do their due diligence because of very short of contingency periods.

I am busy enough that if the inspection contingency period is less than ten days, the chance of booking me goes way down. Now I typically have a list of other inspectors to help the buyer out when this occurs but they too are typically busy as well. What the client ends of with is an inspector capable of doing 3 and 4 inspections a day with the resultant mediocre report if not a mediocre inspection itself.

I am jealous of other parts of the country where I hear 10 and 12 day contingency periods are the norm while here 5 and 7 days is much more common.

It seems to me that in a rush to get the deal done, the only persons that benefit from this arrangement are the seller and the seller’s agent.

I know for a fact that many buyers feel there is considerable pressure to keep the ball rolling along, non-stop—at a pace that does not allow for second thoughts.

This freneticism is typically not present in commercial inspections–with 30 day contingency periods being common. Why the difference in Residential real estate sales? While I do not advocate 30 day contingency periods, a guaranteed 15 days sure would take the pressure off all parties and allow for a buyer’s due diligence.

Some might argue that I only care about this because I don’t want to lose the inspections—but the irony is that I am booked most of the time anyway, but it would allow for more clients who really want to book me a “chance” of getting me and would allow me to even-out my scheduling with far less cancellations.

Because of these short contingency periods, it is not uncommon for buyers or agents, who really want to use me, to call and “pencil me in” for a time slot in an “anticipated contingency window” only to have the deal not come together and leave me with time to blog–or an unneeded day off.

The real kicker is that the clients that wanted to use me, but whom I had to tell I was potentially booked, were also not best served.

Again it is business models that favor quick inspections with mediocre reports that are favored in this scenario. Neither of which benefits the consumer.

Short inspection contingency periods also affect, well inspections, septic system inspections, sewer scoping and even appraisals—let alone further evaluations by the professional trades that may be necessary.

Again, who really benefits from short contingency periods?


By Charles Buell, Real Estate Inspections in Seattle

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  1. Buyers have to make the decision on who to use. It’s not the seller or seller’s agents problem or fault the the market is the way it is. The only answer is for more good inspectors like you. In other markets buyer’s agents advertise they can rip sellers to shreds and maybe so. My question is, why did so many buyers give agents a bad time when they were advised to buy back in 2009 to 2012?

    • Charles Buell says

      Glenn, I don’t know about 2009-2012, but I am pretty sure that just because we cannot find anyone to blame does not mean there is not anything wrong. There is clearly something wrong with the status quo—at least for buyers and their agents.

  2. I agree with Glenn’s point regarding the need for more well-trained, knowledgeable, and competent home inspectors. That’s a challenge for the home inspection industry, not the real estateprofession. In spite of governmental regulations and requirements as well as trade associations’ standards, home inspectors and the home inspection industry follow no hard and fast rules or concepts.

    It’s far past time for the home inspection industry to step back and reassess exactly what defines home inspectors’ responsibilities, limits, and methods. Otherwise, the chaotic, quasi-schizophrenic direction in which the industry is heading will only become more vague and misunderstood by practitioners as well as by customers and the real estate profession. Based on the history of the industry, I don’t hold out much hope that the organizations which purport to represent the home inspection industry will ever overcome their inherent inertia and move beyond the status quo.

    We’ll never eliminate all of the poor or mediocre inspectors. However, maybe we can reduce their numbers and adverse effect through an individual, one-at-a-time approach. Those of us who are more skilled can choose to offer to help those who are less skilled and/or conscientious. We can help them become better inspectors and that will improve things for our industry as well as for home buyers, sellers, and real estate professionals. It can help if we consider that a candle loses no light when it lights another candle.

  3. Charles, amen to that! The short conditional periods in my market area (Toronto, ON) are typically 5 days and can be as little as 3 days. On one I did recently, once the buyer had the home inspection booked, the seller reduced the conditional period by a day, therefore shortening the time for report review to less than a day. I don’t see how they could have done that without the buyer’s agent sign back on the offer…… And on this particular house, there was a structural problem that I recommended further evaluation by a structural engineer. You are lucky if you can get an engineer booked in less than a week. We have a tight housing market, with low stock of single family homes.

  4. Yes contingency periods are too short and they are designed that way because it’s a massive open hole to locking down the sales contract of which agents income is also contingent upon. Keep things moving before the Ether of buyers excitement of an accepted contract wears off.
    We have the same problems here in Virginia. Though I agree we need more competent inspectors, I don’t see how that will solve the problem. We have very competent inspectors here that have 30 years experience and still knock out 3-5 inspections per day doing condensed inspections. They have decided to go with the flow and adjust their business model to capture the volume inspections with short contingency periods, but haste make waste and the inspection quality suffers. These inspectors aren’t too worried about their reputation because they believe their client is the agent who will continue to feed them work. Good luck with that parasitic business model because thanks to the internet and consumer awareness, it won’t be long now when the real estate agent profession has exceeded its useful service life and is obsolete.

    • Charles Buell says

      Daniel, I agree in that many home inspectors are just as much a part of the problem. Well stated. I am pretty sure agents have not outlived their usefulness but their roll will certainly morph into one of even more usefulness in the future—if they are to survive.

  5. Good article Charles, matches my thoughts to a ” T”.

  6. Maxim Soloviev says

    I think that system where buyers have to make offers on something without knowing it’s condition is flawed to begin with.

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