Home Inspection

7 Red Flags to Walk Away After a Home Inspection

Buying a house is a huge decision, and it’s important to have all the information before you commit. Knowing when to walk away after a home inspection can distinguish between a significant investment and an expensive mistake.

As a Certified Master Inspector, I see buyers have to make tough decisions about whether or not to buy a house. As home inspectors, we can’t advise buyers on whether or not to buy a house. When deciding when to walk away after a home inspection, there are a few factors to consider.

  • Any major issues such as structural problems, mold, or electrical or plumbing issues that could pose a safety hazard or require costly repairs.
  • The extent of the repairs needed and whether they are within your budget and timeline. Some repairs may be minor and can be addressed quickly, while others may be major and require significant time and financial investment.
  • Whether the seller is willing to renegotiate the major issues found during the inspection.

Ultimately, deciding to walk away after a home inspection depends on your circumstances and priorities. It’s important to work with a trusted real estate agent and carefully consider all factors before deciding.

With careful research and preparation, you can ensure your new home purchase will bring years of enjoyment and not become a money pit.

What is a Home Inspection?

A real estate contract often contains a contingency period allowing the buyer to have a home inspection within 10 to 14 days for due diligence. A home inspection is a non-invasive examination of a real estate property’s condition. The home buyer typically hires a professional inspector after their purchase contract offer on the house is accepted.

The inspector looks for potential issues with the home’s structure and systems, including:

  • Electrical wiring and fixtures
  • Plumbing systems and fixtures
  • Heating, ventilation, and air conditioning (HVAC) systems
  • Insulation and ventilation in the attic and walls
  • Foundation integrity
  • Roofing structure and materials
  • Windows and doors
  • Fireplaces, chimneys, and other fuel-burning appliances

During an inspection, the professional home inspector will assess the roof for signs of deterioration and search interior ceilings for potential water stains that may be symptomatic of leaks. Additionally, they’ll review the foundation to identify harm or cracks that could point toward severe structural damage in the home.

Home inspections also provide details regarding appliances’ age and functioning condition, such as refrigerators, ovens, built-in microwaves, washing machines, and dryers (if included). Furthermore, evidence of pest infestation, be it termites or other insects or rodents, will also appear on report findings.

When To Walk Away After A Home Inspection

Home Inspection Red Flags

There are certain situations where it’s wise to walk away after a home inspection before signing on the dotted line. While there is no pass or fail grade, a bad home inspection outlining major issues can become a deal breaker.

Generally speaking, cosmetic issues are not major red flags. However, these inspection issues can give some buyers cold feet.

Structural Problems

If your inspector finds major structural issues with the house, this can cause concern. This includes anything from foundation problems to roof damage that could lead to water leakage and further damage. If these issues aren’t caught early in the inspection process, they can quickly become costly problems that could cost thousands of dollars in extensive repairs.

Foundation issues, roof deterioration, and other structural damage can be expensive and inconvenient. In severe cases, a structural engineer must outlay and oversee repairs.

Over half of the first-time home buyers claimed that if a house featured foundation problems, they would instantly back out; the same goes for leaky roofs and outdated electrical systems. You may also encounter split rafters or rotten wood in the attic – both are surefire deal breakers!

Bad Roof

A bad roof is a major red flag in any home inspection and can cause serious consideration as to whether or not to proceed with the purchase. A faulty roof can lead to potential structural, water, and other costly repairs.

If a good home inspector finds signs of a bad roof during the inspection, such as missing or damaged shingles, pooled water, and sagging or discolored areas, it should be taken seriously. In severe cases, the cost of the repairs may exceed the value of the home itself.

For this reason, it is important to consider all possible expenses when deciding if a home is worth buying after an inspection that reveals a bad roof. When faced with this situation, it’s best to walk away from the purchase and look for another property that is better suited to meet your needs.

Mechanical Systems

Your inspector should also check all mechanical systems in your prospective home, such as plumbing, electrical wiring, and HVAC systems. If any of these are deemed outdated or faulty beyond repair, this may be a sign that it’s time to walk away from the sale and look elsewhere for a better option.

Although many mechanical systems can be updated or improved over time if needed, major problems should raise major red flags for potential buyers.

From furnaces to air conditioners, water heaters, electrical systems, and plumbing – the most frequent issues that need repair can be both hazardous and costly. It may not seem like a major problem in the beginning. However, an electrical fault could prove deadly or result in a pricey fix-up bill.

Pest Infestations

No one wants to buy a home only to find out later that pests like rodents or termites have infested it. Your inspector should check for signs of infestation inside and outside the property, including dark stains on walls caused by pest droppings or damaged wood caused by termites.

If they find evidence of an infestation, this is typically considered a deal breaker, and you may need to reconsider purchasing this property. From rats and mice to carpenter ants and termites, a home infestation of small animals can be unpleasant and severely affect the structure.

Understandably, it’s no surprise that nearly half of all prospective homeowners consider pests like termites, rodents, or other insects non-negotiable deal breakers!

Mold Growth

Mold can cause serious respiratory health issues if left unchecked. Hence, your inspector needs to look for signs of mold growth throughout the property—especially in bathrooms and basements, where mold is most likely to form due to high humidity levels.

If they detect more than trace amounts of mold growth during their inspection, this may cause alarm as remediation costs can quickly add up over time when dealing with mold removal projects.

Mold typically indicates a water-related issue in the home. Therefore it must be addressed. Identifying and treating the mold promptly is paramount to minimize costly repairs – not to mention potential respiratory problems for those living in the space.

Environmental Hazards

Homebuyers, especially those considering older properties, should be aware of potential dangers like lead paint, asbestos, carbon monoxide, and radon that home inspectors may discover. Reputable home inspectors may use specialized testing equipment to detect the presence of these substances within your home.

In some cases, additional inspections or lab testing may be necessary to fully understand the extent of environmental problems. They will then inform you of any required steps that need to be taken to ensure safety and health in your home.

Buying a Home As Is Can be Costly

An “as is” home sale is an exception to the rule. This indicates that the proprietor understands some damages and might even inform you before escrow begins (possibly sooner). In this situation, they are less likely to haggle on issues previously disclosed or found in a report because they have already calculated those costs into their asking price.

Therefore, when dealing with such properties, buyers should review inspection reports carefully to confirm existing problems and ascertain if it’s worth what needs doing for its cost.

What is Reasonable to Ask for After a Home Inspection

According to a study from Porch, 86% of home inspections found necessary repairs. Of these repairs:

  • Roof issues account for 19.7% of repairs.
  • Electrical problems make up another 18.7% of repairs.
  • Foundation issues account for 8.9% of problems.

Knowing what you’re asking for is essential when making repair requests after a home inspection. You may request that the seller remedy any issues or receive an escrow credit for the repairs. An experienced real estate agent can help decipher these costs and whether sellers will comply with your demands.

Managing your expectations is key in this situation; having someone knowledgeable by your side will make all the difference.

It’s only fair that the seller takes care of any neglected home maintenance tasks that become major issues. Neglected or deferred items could occur due to a lack of knowledge on what needs tending in your house; sellers can ensure they take the necessary steps before selling their property.

Mortgage lenders backed by HUD programs like FHA, VA, or USDA require homes to be move-in ready, meaning they can’t have even minor issues like peeling paint and must have safety devices like GFCIs and smoke and carbon monoxide detectors.

From simple electrical repairs, like switching out an outlet to ground fault circuit interrupter (GFCI) outlets, to plumbing tasks such as snaking piping and termite issues requiring tenting the house before closing escrow, most small fixes can be managed promptly with minimal effort.

Generally speaking, the seller is likely willing to take care of it or provide a repair credit to pay a contractor from escrow.

When to Walk Away After a Home Inspection

Your decision to leave or stay after a home inspection all boils down to the amount of your desire for that particular property and how much effort you are willing to put in if repairs need doing. There’s no formula set in stone when it comes to this. You will have to make an informed choice based on the facts at hand.

You can request anything during the inspection period – even if a property is being sold “as is.” The assessment may discover significant issues, providing buyers with strategic negotiation opportunities. If sellers don’t want to walk away from a deal, this allows them some room for compromise and potential benefits!

As a property buyer, you should devise an approach before negotiating. You have to ensure that any necessary repairs are within your budget (or skillset) if the seller won’t do them for you. If you’re adept with DIY projects, they’ll mainly require manual labor and inexpensive materials or spare parts. However, as repair expenses increase drastically, consider whether the house is still worth its value.

If there are too many things to fix on the home already, chances are it won’t be appraised up to what they put in their asking price anyway – at this point, walking away may be your last resort because no loan can cover such costs anymore.

Prospective home buyers should be ready for any eventuality until they’ve had an inspection. You may need to cancel the deal or renegotiate post-assessment if issues arise – keep in mind that a thorough examination is merely one step in the entire home-buying process; it isn’t the last!

If negotiations fail to reach an agreement, prospective buyers should ask themselves these questions:

  1. How much will repairs cost?
  2. Could unforeseen expenses pop up during the process?
  3. Would it be possible for me to fix any problems and cut costs that way?
  4. Can I finance this home and its necessary repairs with my current money?

Answering these queries will enable you to make a practical decision on whether or not you should abandon the house. If it is too expensive for your budget, then there’s no point in getting into financial trouble; even if it fits within your means, don’t be tempted by its total cost, including repairs to a home with fewer potential problems may be preferable.

If you’re a lover of fixer-upper homes, it’s essential to conduct home inspections so that you can understand what issues need addressing.

Although there isn’t an exact formula for when the risk of repairing your property is not worth it, it all comes down to how prepared and willing you are to make repairs.

Sadly, one out of four homeowners felt remorse after they overlooked their home’s issues. To prevent this from happening and minimize the anxiety associated with purchasing a residence, seek assistance from an honest real estate agent. They can suggest qualified home inspectors and advise you on whether any defects are minor or major deal-breakers.

Opting for a fixer-upper can be an excellent choice, but you’ll need the assistance of a skilled negotiator to ensure that your dream home won’t put your budget into disarray. A real estate agent will help facilitate negotiations over repairs and pricing so that you receive the best possible deal – saving you thousands on unexpected repair costs down the line.

What Does a Home Inspection Report Include?

Generally, home inspectors review the condition of plumbing, HVAC systems, and electrical wiring when producing their reports. In addition, they also ensure that roofing elements such as rain gutters are in good shape while assessing walls, floors, and ceilings for damage – not forgetting insulation levels within attics too.

To ensure your new abode is up and running safely, the inspector will thoroughly investigate basement foundation areas and any other structural components present. Although even new construction homes may contain some issues here or there, it’s important to note that older residences require more repairs than those just built.

Key Takeaways

  1. Cosmetic issues are not major red flags and should not influence the decision to walk away after a home inspection.
  2. Major structural problems like foundation issues, roof deterioration, other structural damage, a bad roof, outdated mechanical systems, pest infestations, and mold growth should be taken seriously.
  3. Major issues can incur extensive repair costs. Consider your repair budget, especially if you buy a home in “as is” condition.
  4. Foundation problems, leaky roofs, and outdated electrical systems are surefire deal breakers for over half of first-time home buyers.
  5. The decision of when to walk away after a home inspection largely depends on whether the seller will repair major issues in the inspection report.
  6. The local real estate market affects a seller’s decision to make repairs after a home inspection. In a seller’s market, buyers struggle to negotiate repairs post-inspection, while in a buyer’s market, sellers are more willing to make repairs or offer a repair credit to close the deal.

Home Inspection FAQs

What are the biggest red flags in a home inspection?

The biggest red flags in a home inspection are safety issues, such as mold, asbestos, or faulty wiring; structural damage to walls or floors; and pest infestations. Additionally, any evidence of water or fire damage should be investigated further. Finally, if any appliances or systems are not functioning correctly, this should also be noted in the written home inspection report.

What to negotiate after a home inspection?

Regarding negotiating after a home inspection, the best course of action could be to speak with the seller and discuss any potential repairs or replacements that may need to be done to address any issues uncovered by the inspection.

Additionally, you should seek an agreement on who will pay for these repairs/replacements and consider factoring any additional costs into the overall sale price. It’s also important to determine what timeline needs to be met to complete this work and when it can be finished before closing.

What are the most common problems found in home inspections?

The most common problems found in home inspections include mold, mildew, water damage, structural issues (cracking of walls or ceilings, sagging roofs), electrical issues (faulty wiring or insufficient wiring for appliances), plumbing issues (leaking pipes or improperly connected devices), pests (termites, rodents, ants), and HVAC system issues.

Is mold a deal breaker when buying a home?

No, mold is not necessarily a deal breaker when buying a home. Mold can often be treated and remediated, so it’s important to evaluate the problem’s extent and determine whether it can be managed.

Depending on the location and severity of the mold, you may be able to negotiate with the seller to have them take care of it. Ultimately, it’s up to you as the buyer to decide if the mold in a home is something you’re comfortable living with.

How often do buyers back out after inspection?

Answering the question without further information about the specific context is difficult. Still, in general, the rate of buyers backing out after an inspection can vary widely depending on the property’s condition and any issues discovered. Generally speaking, it is estimated that somewhere between 5-10% of buyers back out after inspection.


Hubert Miles | Licensed Home Inspector, CMI, CPI

Hubert Miles is a licensed home inspector (RBI# 2556) with more than two decades of experience in inspection and construction. Since 2008, he has been serving South Carolina through his company, Patriot Home Inspections LLC. As a Certified Master Inspector, Hubert is dedicated to providing his expertise in home inspections, repairs, maintenance, and DIY projects.