Can a Buyer Back Out After a Home Inspection?

You found your dream home in Lincoln, Nebraska. The price is right, the neighborhood is perfect, and you're ready to make an offer. But wait. Can a buyer back out after a home inspection? What if the inspector finds a major issue that turns your dream into a nightmare? 

Backing out after a home inspection is something to consider, and you need to be aware of your rights. Whether you're new to buying homes or have done it before, knowing the details of the inspection process can help you avoid big problems later on.

In this article, we'll talk about why people back out after a home inspection, if it's possible to back out after the inspection, and the steps you need to take when you've decided to back out from the real estate transaction in Lincoln, Nebraska.

Common Reasons People Back Out After a Lincoln Home Inspection

Before we answer your question, "Can a buyer back out after a home inspection?", let's explore the most common reasons as to why you would want to back out after having a house inspected in Lincoln, Nebraska.

Discovering Significant Structural Problems

If you uncover major issues with the property’s foundations, framing, or roof structure, you might rethink your decision. These structural issues can be costly to repair and could pose a safety hazard in the future if left unaddressed.

Uncovering Health and Safety Hazards

Identifying health hazards such as mold, asbestos, or radon can greatly impact your willingness to proceed with the purchase. Health and safety hazards can cause health issues and can also incur significant expenses and work to remedy.

Noticing Extensive Repairs Needed

If the inspection report reveals extensive repairs required to bring the property up to standard, you might feel overwhelmed. Extensive repairs can involve large expenses, and it may be challenging to find the necessary resources and expertise to perform the repairs needed.

Having Second Thoughts

Sometimes, you simply have second thoughts about the property, which may arise after reviewing the inspection report. These doubts may be due to issues that make up or defects that you may have missed earlier in the buying process.

Can A Buyer Back Out After a Home Inspection?

So, can a buyer back out after a home inspection? Yes, as a buyer in Lincoln, NE, you can typically back out of a real estate transaction after a home inspection. Most purchase agreements include an inspection contingency clause that allows you to withdraw from the deal if the inspection uncovers issues you are not comfortable addressing.

Understanding the Inspection Contingency

The inspection contingency clause gives you the right to request repairs, negotiate a lower purchase price, or walk away from the deal altogether if significant issues are discovered during the inspection. This clause protects you and provides you with an exit strategy if needed.

What Happens to Your Earnest Money Deposit

If you decide to back out after the home inspection, the fate of your earnest money deposit may come into question. Typically, if you exercise your right to withdraw due to issues uncovered in the inspection, your earnest money deposit should be returned to you.

Consulting with a Real Estate Attorney

For added guidance and clarity on your rights and obligations when backing out of a real estate transaction post-inspection, consider consulting with a real estate attorney in the Lincoln area. They can provide legal advice tailored to your specific situation.

Steps to Take When Backing Out From a Real Estate Transaction in Lincoln

When you decide to back out from a real estate transaction in Lincoln, there are important steps you should follow to handle the situation properly. Here's what you can do:

Inform the Seller

Communicate your decision to the seller in writing, citing the inspection report's findings. Express your intention to withdraw from the transaction clearly and professionally. Provide specific reference to the inspection report's findings. This ensures that the seller understands the reasons behind your decision.

Follow Contingency Procedures

Adhere to the terms outlined in the inspection contingency clause of the purchase agreement. The inspection contingency allows you to request repairs, negotiate a lower purchase price, or withdraw from the deal altogether if significant issues are discovered during the inspection. 

Make sure to review the purchase agreement and follow the specific procedures and timelines outlined in the contingency clause to exercise your rights appropriately.

Request Deposit Return

Ensure that the earnest money deposit is returned to you as specified in the contract. Typically, if you are exercising your right to withdraw from the transaction due to issues uncovered in the inspection, your earnest money deposit should be returned to you. 

Communicate your request for the return of the deposit to the seller or their representative in writing, and be sure to reference the contract terms about the return of the deposit.

Consider Pre-Inspection Offers in Lincoln To Avoid Back Outs

So, can a buyer back out after a home inspection? The answer is a resounding yes, but it's not always that simple. Your purchase agreement and local laws will dictate the specifics, but in most cases, you have the right to walk away if the inspection reveals major issues.

The key is to be prepared. Know your contract, work with a trusted real estate agent, and don't be afraid to negotiate repairs or credits with the seller. And if you do need to back out, do it quickly and in writing to protect your earnest money deposit.

To mitigate the chances of backing out after a home inspection, consider making pre-inspection offers. This strategy involves inspecting and presenting an offer, allowing you to negotiate from a more informed position.

If you need a reliable and thorough home inspection service in Lincoln, NE, Murray Inspection Services is here to assist you. With a range of pre and post-inspection services covering foundations, roofing, exterior, HVAC, plumbing, electrical systems, and more, you can rely on us for accurate and reliable inspection reports. 

Schedule your inspection today at Murray Inspection Services to make informed decisions about your real estate transactions, or contact us for more inquiries. Best of luck house hunting!