Table of Contents
- Protecting Your Earnest Money Deposit During the Inspection Period
- What a home inspection contingency does in a California purchase contract
- Where the inspection step sits in your home buying road map
- How long you have: the inspection period and the due diligence period
- What the inspection covers in condos, near-campus homes and luxury properties in Davis
- Your options once you have the inspector's report
- What happens if the contingency expires or you remove it
- Your next step after the inspection: work with a buyer's agent
Protecting Your Earnest Money Deposit During the Inspection Period
A home inspection contingency is a condition in your purchase offer that lets you inspect a home before your purchase becomes final. It exists to give you a way to cancel and protect your earnest money deposit (the money you put down to show you are serious about buying) if the inspection turns up a problem you cannot accept.
Ask your agent to confirm exactly how your own contract ties this contingency to your deposit. Contract wording can vary from one offer to the next.
Think of the inspection contingency as one step in your path from offer to closing, not a stand-alone clause.
What a home inspection contingency does in a California purchase contract
The California Department of Real Estate advises buyers to include contingencies, such as a home inspection and a pest control inspection, in their purchase offer. Consider adding both when you make your offer. This step is easy to include when you first write your offer.
California home inspection law defines a home inspection as a noninvasive, physical exam of a home's mechanical, electrical, plumbing and structural systems. This applies to the sale or transfer of a residential property with one to four units. California treats the inspection as a service performed for a fee. The goal is to find material defects, meaning serious problems with the home. California law defines a home inspector simply as anyone who performs a home inspection.
Where the inspection step sits in your home buying road map
The home inspection contingency is not a stand-alone clause. It is one checkpoint inside a ten-step buyer road map, running from pre-approval through closing. Seeing it this way helps you know what comes before and after this decision.
Pre-approval and an accepted offer come first on this road map. The inspection period and the contingency decision come next, once the seller accepts your offer. Closing comes last, after every contingency is resolved. Pre-approval also shows sellers you are ready to buy before you make an offer.
For the other nine steps, see the complete home buyer road map. Here, we focus only on the inspection checkpoint.
If you are relocating to Davis for a new job or to start at UC Davis, the same protection applies. The inspection contingency works the same way once your offer is accepted. While you decide where to buy, you can look through the Davis neighborhoods page, including South Davis. You can also read more about relocating to Davis for help planning your move.
How long you have: the inspection period and the due diligence period
The inspection period, also called the due diligence period, is the window your contract gives you to inspect the home. During this time, you schedule the inspection, review the report and decide what to do next. Scheduling the inspection soon after your offer is accepted gives you the most time to review the report and decide.
Your purchase contract sets its own deadline for the inspection contingency. Ask your agent to confirm the exact deadline in your offer before the clock starts running. A missed deadline can change your options, so mark it on your calendar as soon as your offer is accepted.
Under California Civil Code Section 1102.3, if the seller delivers disclosures (the seller's written list of known property problems) after you sign your offer, you get a short window to cancel in writing. You have three days if the disclosures arrive in person, or five days if they arrive by mail or electronically.
As of November 2026, confirm this window with your agent or an attorney before you rely on it, since rules can change. This right is different from your inspection contingency: it applies only when disclosure paperwork arrives late, not when your own inspector finds a problem with the home.
What the inspection covers in condos, near-campus homes and luxury properties in Davis
Davis buyers looking at a condo, a home near UC Davis, or a luxury home can expect the same inspection described above.
In a condo, the inspector checks those same systems inside your unit. It is also worth asking about shared-building parts, such as the roof and common areas, since those sit outside your unit. Buyers comparing condos can review condos for sale in Davis, CA.
Buyers looking at older homes or properties near UC Davis can check a property's pest inspection history before closing. California's Structural Pest Control Board keeps a searchable record of wood-destroying pest inspection reports for a property, going back two years. As of November 2026, that two-year window is what the Board's records cover; confirm current access details directly with the Board.
The same inspection standard applies to a home near UC Davis or a luxury property. You can browse homes near UC Davis or luxury homes in Davis while you weigh your options.
Example scenario:
A buyer makes an offer on a Davis condo, and the inspection is scheduled soon after the seller accepts. During the inspection period, the buyer reviews the report and decides whether to move forward. Reading the full report carefully, rather than skimming the summary, helps the buyer choose the right next step.
Your options once you have the inspector's report
Once you have the inspector's report, you have four main choices. You can ask the seller to make repairs, request a credit, renegotiate the price, or walk away from the purchase. A credit works the same way as a repair request, except you ask for money off the price instead of repair work.
The table below compares what each choice means for your earnest money deposit and your closing timeline. This includes escrow, the neutral account that holds your deposit and paperwork until closing.
| Option | What it means for your deposit | What it means for closing |
|---|---|---|
| Request repairs | Stays in escrow while you and the seller agree on the repairs | Closing moves forward once repairs or terms are settled |
| Ask for a credit | Stays in escrow while you negotiate the credit amount | Closing can proceed once you both agree before the contingency deadline |
| Renegotiate the price | Stays in escrow while new price terms are worked out | Closing depends on reaching new terms before the contingency deadline |
| Walk away | Protected: you cancel in writing while the contingency is open | The purchase of this home ends, and you look at other properties |
Which option fits best depends on the size of the problem and how much time is left in your inspection period. A small, inexpensive issue might call for a credit, while a major system problem might call for renegotiating the price or walking away. If you are unsure which option fits, ask your agent to walk through the report with you line by line.
If the issues are bigger than a single repair or credit, you can ask to renegotiate the price instead. This keeps your deposit in escrow while you and the seller work out new terms.
Canceling while the contingency is open is how buyers use the inspection results to walk away, sometimes called backing out for any reason. Ask your agent exactly how your contract's deposit terms apply if you take this step. Taking this step keeps your options open until you are ready to decide.
What happens if the contingency expires or you remove it
Removing a contingency is different from the contingency simply running out. When you remove it, you choose to give up that protection in writing, even if the deadline has not arrived yet.
Removing the contingency usually means telling the seller, in writing, that you give up your right to cancel over issues from that inspection. Waiving it from the start works the same way: you move forward without that protection.
This matters whether you are removing the contingency on a condo, a home near UC Davis, or a luxury property. The same rules about your deposit apply across Davis.
If the inspection period ends before you act, what happens next depends on the exact deadlines in your purchase contract. Ask your agent or escrow officer what your contract says about your deposit before you sign a removal or a deadline passes. Get the details in writing so you know exactly what you are agreeing to.
Your next step after the inspection: work with a buyer's agent
After the inspection, your next move is having support through closing. Anna Aljabiry is a REALTOR®, DRE# 01948355, who can help you weigh your options. Contact Us Today to talk through your inspection report and plan your next step.
