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A home does not fail inspection in Colorado. The Colorado Contract to Buy and Sell gives the buyer three dates instead: an Inspection Objection Deadline, an Inspection Resolution Deadline and an Inspection Termination Deadline. By the first one the buyer objects or accepts the home. By the second, the buyer and seller sign a resolution or the contract terminates on its own. What sellers call a failed inspection is a terminated contract, and the home goes back on the market with a new set of known facts. This post covers what happens at each date, what a normal repair credit looks like in the Denver metro, what you owe the next buyer, and when to change course.
The three dates in the Colorado contract
- Inspection Objection Deadline. The buyer's inspector, sewer scope, radon test and any specialist have to finish before it. The Kenna Real Estate Group writes 7 to 10 days on most Front Range contracts. The buyer either sends a written Inspection Objection listing the items and the requested fix, or lets the date pass and accepts the condition.
- Inspection Resolution Deadline. A few days after the objection deadline. If the buyer objected and the two sides have not signed a written resolution by this date, the contract terminates on the deadline unless the buyer withdraws the objection in writing first. Nobody has to send a termination notice; the contract ends by its own terms.
- Inspection Termination Deadline. The buyer's independent right to end the contract over the inspection, earnest money returned, no reason required. On most contracts it lands on the same day as the objection deadline.
Every date is negotiable at offer time. A seller who accepts a 14-day objection deadline has given the buyer two weekends to find reasons to renegotiate; a 7-day deadline keeps the transaction moving. The full timeline from listing to closing is in the how to sell a house in Colorado guide.
What an objection looks like and how to answer it
The objection arrives as a form with the inspection report attached, listing items and asks: "Replace Federal Pacific panel," "Repair sewer line per attached scope," "$8,000 credit in lieu of roof repair." The seller has three answers, and the resolution deadline is the clock:
- Agree to the repair, completed by a licensed contractor before closing with a receipt. Right answer for anything that fails the buyer's insurance or appraisal, because a credit does not fix a roof the insurer will not write.
- Offer a closing credit instead of the repair. Right answer for items with a written bid where the buyer would rather choose the contractor. Lenders cap seller credits at 3 to 6 percent of the price depending on the loan and the down payment, and the credit applies to the buyer's closing costs.
- Say no. Right answer for items the price already reflects, for cosmetic asks, and for a list so long it signals a buyer looking for an exit. The buyer then closes as-is or the contract terminates.
Counter in writing, item by item, before the resolution deadline. The most common seller mistake in the Denver metro is a verbal agreement on day 9 and a missed deadline on day 10, which terminates a deal both sides wanted.
What a normal credit looks like in the Denver metro
| Finding | Front Range repair cost | What buyers ask for | What settles |
|---|---|---|---|
| Federal Pacific, Zinsco or Sylvania panel | $2,500 to $5,000 | Replacement or the full cost as credit | Seller replaces it; cheapest fix that ends the objection |
| Sewer line with roots, offsets or a belly | $3,000 to $8,000 spot repair or liner; $8,000 to $25,000 replacement | Replacement | Credit or repair at the spot-repair number when a second scope supports it |
| Roof with hail damage, over 20 years old | $12,000 to $25,000 | New roof | Seller replaces it or files the hail claim; a credit rarely works because the buyer's insurer has to accept the roof |
| Radon over 4 pCi/L | $1,200 to $2,500 mitigation | Mitigation system | Seller installs it with a post-test |
| Furnace over 20 years old, working | $5,000 to $9,000 replacement | Replacement | $150 service and a $1,000 to $2,000 credit, or no |
| Expansive-soil cracks | $400 to $800 engineer's letter; $15,000 to $40,000 piers if active | Structural repair | Engineer's letter first; credit only if it says active movement |
Two scopes beat one. When a buyer's plumber quotes a $22,000 replacement, a second camera scope from a different company for $150 to $300 answers whether a $4,000 liner does the job. The repair-side ranking is in the inspection red flags that kill Denver home sales and the fix-or-skip list is in what not to fix before selling a Denver home.
When the buyer's loan requires the repair
An FHA or VA appraiser applies minimum property standards, and a credit does not satisfy them. Peeling paint on a pre-1978 home, a roof with under two years of remaining life, exposed wiring, a non-working furnace or a missing handrail each have to be repaired before the loan funds. Sellers who refuse lose that buyer and every other FHA and VA buyer behind them. Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender, tells Kenna Real Estate Group sellers which inspection items the appraiser will require on a given loan and which are negotiable. You are free to use any lender. The programs are on the Colorado home financing guide.
The contract terminated. Now what?
The earnest money goes back to the buyer, the listing status changes from pending to active the same day, and the seller owns the buyer's inspection report. Three things happen next, in order:
- Update the Seller's Property Disclosure. Every finding in that report is now an adverse material fact you know. Colorado requires you to disclose it to the next buyer. The form and its sections are covered in what Colorado sellers disclose on a house in poor condition.
- Get bids on the items that ended the deal and decide once: fix, credit or reprice. Post the bids and any completed repair receipts in the listing documents so the second buyer prices from facts.
- Reprice with the findings in the number. A Smart Pricing Report from the pricing your Colorado home to sell page takes the repaired comparable sales and subtracts the open bids. Do this once. Repricing three times in 30 days signals a problem larger than the sewer line.
A terminated contract costs a Denver metro seller 3 to 5 weeks: the days already spent under contract, plus the time to relist and secure a second buyer. It does not cost the sale. Homes that come back on the market with the report posted, the panel replaced and the price adjusted go under contract again within 14 days in a normal Front Range month.
Prevent it: the pre-listing inspection
A general inspection before listing costs $400 to $700 and a sewer scope $150 to $300. Together they hand the seller the objection list before there is a buyer to object. Fix the items that fail insurance, appraisal or the three-question test, price the rest, and post the report. Buyers who read the report before offering write offers that already account for it, and their own inspector finds nothing new. The systems to check first on a pre-1970 home are in selling an old Denver house that needs repairs, and the plumbing side is in how to prepare plumbing before selling your Denver home.
When to change course to a cash buyer
If the report lists a failed roof, a bad panel, a collapsed sewer and active foundation movement, and the seller has neither the money nor the months to fix them, the market for the home is investors. They buy with cash, close in 10 to 21 days, waive or shorten the inspection dates, and price from repaired value minus the rehab minus their margin. Direct buyers such as Sierra Homebuyers work that model; Denver has local investors who do the same. Get two cash offers and compare them with a listed as-is estimate before you sign, using cash home buyers in Denver: when selling for cash makes sense and the Colorado distressed homes guide.
Can the seller walk away at inspection?
No. The inspection dates belong to the buyer. A seller who receives an objection answers it or lets the resolution deadline pass, and the contract terminates; a seller who receives no objection is bound to close. A seller with a better backup offer waits for the buyer's move, and a seller with a change of heart has no inspection exit. Plan the price and the repair position before accepting the offer, not after the report arrives.
Where to go next
- How the Kenna Real Estate Group helps sellers
- Preparing and adding value before selling
- Selling your Colorado home as-is: pros, cons and net price
- Denver radon testing and mitigation guide
- Homes for sale in Denver and homes for sale in Lakewood
- Meet the Kenna Real Estate Group agents
Talk to the Kenna Real Estate Group
The Kenna Real Estate Group, Keller Williams DTC, sets the inspection dates at offer time, answers every objection in writing before the resolution deadline, brings second bids on the big items, and, when a contract terminates, has the disclosure updated and the home back on the market the same day with the numbers already adjusted. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Buying next? Search every home for sale in Colorado.