When you sign a contract to buy a home, whether it is a newly constructed home or a pre-existing home, the contract should contain a “satisfactory home inspection” contingency. A contingency gives the buyer the right to cancel the contract without penalty (i.e. get your deposit money back in full) if a particular condition of the contract is not met to your satisfaction.
There are generally two types of outcomes that can arise from a home inspection contingency:
1) If the home inspector finds problems, regardless of what they are, you have the absolute right to back out of the deal without penalty;
2) If the inspector finds problems, you can present those problems to the seller, and give him or her X number of days to fix the problem, or give you a cash credit (generally, this comes off the home’s sales price).
For example, if the roofing shingles are peeling, you can try to negotiate the price of a new roof off the sales price. If the seller refuses to either fix the problem or negotiate a lower sales price, you can assess the magnitude of the defect and the potential cost to remedy it, and either decide to go forward with the deal or walk away.
The buyer pays for the home inspection, and should be present during the inspection in order to ask any questions. It’s also a great opportunity to get all of your questions answered by an expert.
Bottom line: You should never buy a home, even a brand new home, without a home inspection, and a home inspection contingency clause in the sales contract.