Which Home Inspection Addendum to Use?

Here in the Seattle area, the buyer of a property gets to choose which Home Inspection Addendum to use, when making an offer to purchase. The primary difference between the two, lies in who has the “unilateral” POWER to keep the contract in-force or not, after the inspection.

The seller can counter by replacing the full inspection addendum with the other variety, but that is rare. I recently had an agent ask if “we wanted” to change the inspection addendum to the one that favored the seller, under the guise that another offer was coming. We decided to call her bluff, and our offer was accepted as written, there being no other offer in hand by the time ours required a response by the seller. Though she was quite surprised that we called her bluff in that regard.

The decision regarding which inspection clause to use, often has very little, if anything, to do with the inspection. It has more to do with whether or not the buyer retains the right to cancel based on the inspection.

I currently have two contracts in escrow for the same party, one on the sale of their property and one on the purchase of their next property. On their sale we have a 35B “Seller’s Opportunity to Repair” inspection addendum, giving them the power to keep their contract in force regarding the sale of their property, at least with regard to the inspection. On their purchase, we have a 35A “Buyer’s Satisfaction” inspection addendum, giving them the right to cancel based on their inspection, to counteract the “resale certificate” out, on their sale contract, since they are buying a home and selling a condo.

To understand the difference between these two addendums, you should review both inspection forms, 35A and 35B AND ALSO the followup forms 35AR and 35BR. The striking difference between the two is more noticeable on the followup form 35BR, with regard to the seller’s power given him by the buyer. If the seller checks the box on the follow up form saying he is going to repair the items, the inspection contingency is satisfied. It becomes a unilateral decision of the seller to satisfy the inspection contingency, whereas the 35A is a unilateral decision of the buyer to cancel.

Simply put, a buyer who makes an offer using a 35A “Buyer’s Satisfaction” inspection addendum, retains the right to cancel based on the inspection. On a 35B, the seller can simply check a little box, agreeing to repair the items in the report, causing the inspection addendum to be satisfied. The buyer cannot disagree with the seller’s choice and walk from the transaction, without risking the loss of their Earnest Money Deposit.

So which should you use? If their are multiple offers, you might be able to avoid a bidding war by using a 35B, which favors the seller, so you can win on terms vs. price. 35B trumps 35A and “no inspection contingency” trumps them all. I don’t recommend no inspection contingency in a blog, though often do in “real life” where I have the opportunity to view the property and ascertain my clients true needs and sensibilities.

It would be interesting to hear from anyone out there in the Seattle area who recently completed a sale, either as a buyer or seller. Which inspection contingency did you use and why? What factors led you to the decision to use a 35B vs. a 35A, or none at all?

22 thoughts on “Which Home Inspection Addendum to Use?

  1. Recently (4 months past) bought in Everett — used 35A, since the house is 101 years old and WHO KNOWS WHAT’S LURKING. Might have helped that the listing went up first on 12.23….no bidding war, luckily.

  2. Alas, no — but another nice break was that the sellers only moved 2 blocks away. They were able to answer the inevitable ‘What’s all this, then?’ questions.

    And it’s (hopefully) unlikely that you’d get stiffed by someone who will still be a neighbor.

  3. Alas, no — but another nice break was that the sellers only moved 2 blocks away. They were able to answer the inevitable ‘What’s all this, then?’ questions.

    And it’s (hopefully) unlikely that you’d get stiffed by someone who will still be a neighbor.

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  6. If a buyer pulls out of a deal with 35a, do they have the obligation to share the inspection or information with the seller?

  7. Many sellers don’t want to have it, as every item becomes a matter of disclosure to future buyers, once the seller is made aware of it.

    It is in the sole discretion of the buyer to cancel based on the inspection under a 35A, and the inspector does not need to be licensed or a professional inspector. So a friend who is “knowledgeable” can just come and say “don’t buy this piece of junk” and the buyer can submit the 35AR cancelling the agreement without noting why. Sometimes they see something outside of the property, like a crack house three doors down or a dog barking constantly next door, and cancel for that reason within the inspection timeframe.

    If a seller wants an inspection done where he has more control, he might say “Inspection Clause 35B to be used” in the Agent Remarks section of the mls. That gives him an opportunity to repair items in the report, instead of the buyer having the unilateral right to cancel based on pure “buyer satisfaction”.

    It is customary, if the buyer wants the seller to fix something, to give the seller that portion of the inspection that identifies the problem. But if the buyer is just walking away from the transaction, the inspection is rarely given to the seller.

    That’s my take on it. The only place where the forms require “proof” of any kind, is if the second inspection clause is invoked, as that must be called for by the first inspector. It gives the buyer 5 additional days tacked on to the original timeframe to respond to all items, not just the item to be re-inspected.

  8. Many sellers don’t want to have it, as every item becomes a matter of disclosure to future buyers, once the seller is made aware of it.

    It is in the sole discretion of the buyer to cancel based on the inspection under a 35A, and the inspector does not need to be licensed or a professional inspector. So a friend who is “knowledgeable” can just come and say “don’t buy this piece of junk” and the buyer can submit the 35AR cancelling the agreement without noting why. Sometimes they see something outside of the property, like a crack house three doors down or a dog barking constantly next door, and cancel for that reason within the inspection timeframe.

    If a seller wants an inspection done where he has more control, he might say “Inspection Clause 35B to be used” in the Agent Remarks section of the mls. That gives him an opportunity to repair items in the report, instead of the buyer having the unilateral right to cancel based on pure “buyer satisfaction”.

    It is customary, if the buyer wants the seller to fix something, to give the seller that portion of the inspection that identifies the problem. But if the buyer is just walking away from the transaction, the inspection is rarely given to the seller.

    That’s my take on it. The only place where the forms require “proof” of any kind, is if the second inspection clause is invoked, as that must be called for by the first inspector. It gives the buyer 5 additional days tacked on to the original timeframe to respond to all items, not just the item to be re-inspected.

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