Often defects are discovered during an inspection that neither the buyers nor sellers were aware of before they entered into an agreement. Who's responsible for fixing these defects? The answer isn't always clear.

State laws vary considerably regarding a seller's responsibility to the buyer when a property is sold. Many states have seller disclosure requirements, but many don't. Some purchase contracts are "as is" with respect to property condition, others include a "seller warranty" clause.

One of the main reasons that home purchase transactions fall apart is due to defects that materialize during the course of the buyers' inspections. Ideally, both buyers and sellers will work together to resolve these problems; however, buyers should retain the right to back out of the contract if defects are noted during inspections.

An inspection normally includes inspection for termites as well as structural inspection. As a protection for buyers, a contract will normally include a contingency to purchase based on the results of a property inspection. Typically a buyer would want to allow 10 to 14 days from acceptance of the contract in order to get the inspection completed.

With an "as is" purchase, the sellers usually aren't obligated to fix defects that are discovered during the buyers' inspections. Still, depending on how the contract is worded, the buyers often times won't have to go through with the purchase if the inspections are not satisfactory.

When the purchase contract includes a "seller warranty" clause, the sellers may be obligated to fix certain defects that are discovered during the buyer's inspections. For example, the seller warranty clause might obligate the sellers to provide a furnace that is in working order. If the buyer's home inspector finds that the furnace isn't operating, the sellers may have to fix it before the deal closes.

Frequently buyers and sellers will want to renegotiate the contract after the buyers inspector completes the inspections.

The wording of inspection contingency clauses varies from one contract to the next. Some clauses state that if the buyers find unsatisfactory property defects that the sellers are unable or unwilling to correct, the contract can be canceled. Other inspection contingencies give the buyers the unilateral right to disapprove the inspections for any reason, without necessarily giving the sellers an opportunity to correct the problems.