I am under contract for a fixer upper still within my inspection contingency period. Before putting in an offer, I got some quotes for renovations based on pictures, and it fell within my budget, so I put in an offer which was accepted.
I was able to bring contractors into the unit today and they found that some major line items that seemed salvageable needed to be replaced. The quotes I received today are significantly higher than what I was expecting—one about 50% over the predicted cost and the other more than double. And the reno time increased by two months due to the increased work and contractor availability, which means more time that I’ll be paying for two homes (about $9k over the reno cost) If I do some of the work myself, reduce the quality of the materials, and use my emergency fund, I could get the lower one within my budget… but it’s not going to be what I dreamed it would be.
I empathize that this sucks for sellers but I’m having cold feet that a couple unexpected expenses above these increases could really screw me, and that the home is just not going to be what I want it to be. Inspection is tomorrow. How badly does the inspection have to fail to use the inspection contingency and get my earnest money (about $10k) back? Other than the inspection cost, which of the other fees will I be liable for?
Threshold for Backing Out During Inspection Period
byu/Foreign-Mortgage-304 inRealEstate
Posted by Foreign-Mortgage-304
6 Comments
If you’re still in the window, you can back out for any reason.
Depends on the state and on your sales agreement. Get more estimates.
Repair/remodel costs are always more than you think. With a fixer upper doubling what you thought you were going to pay is probably what it will cost.
If you know you want to back out, I’d cancel the inspection and save your money. Say you saw some troubling things during your visit with contractors, and leave it at that.
Realtor here. In my market, you have three “get out of deal free cards”. Inspections: if you don’t like what was found during the inspections, you can get out and get your earnest money back. Financing: if you don’t like the financing terms of your purchase, you can get out and get your earnest money back. Appraisal: this is the amount a bank is willing to loan against the property. If it comes in lower than the price that you and the seller have agreed upon, you can either renegotiate or get out and get your earnest money back.
We don’t have your contract. We don’t know the terms of what you agreed to.