Mortgage Daily

Published On: December 15, 2022

No home is perfect and it’s common for some issues to be identified with a home inspection. How you structure your home purchase agreement is going to determine how you handle the results. Here are some common things to know about a home inspection:

  • Small issues can be easily fixed or even ignored.
  • If any major problems are found, the seller may be required to lower the price or make repairs before closing.
  • Very serious issues can completely kill the deal. This can happen when the seller is unwilling to fix the issues or cannot afford to fix them.

Issues that are cosmetic may not matter too much. Issues like a bad roof, toxic mold, or a cracked foundation are issues that can ruin your finances and possibly your health.

What to Do When the Home Inspection Is Troubling

Understanding the home inspection report and what to look for can be confusing. If you work in construction, you may understand what is written on the report, but even if you were to research the terminology used, it can still be hard to distinguish between a minor or major issue.

If something serious is found, it could be a deal breaker depending on how the seller handles the situation. The seller may offer to fix the issue or they can refuse. If you really do love the home, you can still move forward and take the risk. If you are still unsure of what to do, talking to your agent is a good start in the right direction.

Read on for some things that can potentially be deal breakers.

Information on the Report

You should first understand the inspection process before you worry about what is on the report. According to The American Society of Home Inspectors (ASHI), the inspection should cover:

  • Structural components
  • Basement
  • Foundation
  • Windows and doors
  • Floors
  • Ceilings
  • Walls
  • Attic, including visible insulation
  • Roof
  • Interior plumbing and electrical systems
  • Central air conditioning system
  • Heating system

It’s important to keep in mind that an inspector can only check the things they have access to. They are not allowed to cut through a wall to access an electrical panel.

If you have had some concerns about the home, make sure to contact the seller’s agent and make sure the inspector will be able to access everything they need to see. For more information on the home inspection process, you can go to ASHI’s website and review a copy of their standard of practice.

The information on the report will include any visible issues the inspector found on the above-mentioned list. The inspector can also look at other things not already listed. Not only will the inspection show anything severe, but there will also be minor issues listed on their report. If there was something concerning found, a specialist can come to look further into the situation, though this will most probably incur some additional fees.

What Are Some Possible Dealbreakers an Inspection May Uncover?

The issues listed below are some examples of issues that can cost more money than you are comfortable with. While some issues can potentially turn out to be insignificant, some issues can be the start of something big. Here are some of the most common serious issues that may be dealbreakers for some buyers:


Certain bugs and pests, while gross, can be relatively cheap to get rid of. Termites, on the other hand, are far from cheap or easy. Termites are “detritivores,” which means they eat decaying vegetation.

As their name suggests, drywood termites love to eat all of the wood they can find, especially the wood that holds up a home.

It is possible to get rid of a current infestation and protect it from future infestation, but it is expensive. You will need a specialist to assess the structural damage they might have already caused.


Having to rewire a home is not only expensive, it’s also disruptive. There is a serious safety issue that can come from old wiring. You should also be extra cautious if the home has aluminum wiring as opposed to copper.

During the 1960s and ‘70s, many homes were wired with aluminum because it was cheaper. We are now aware that aluminum wiring is less safe than copper. This is something that you should consider if your inspection comes back that your home has aluminum wiring.


Mold is scary, but not all molds are harmful to humans. There is a good chance that any mold your inspector sees can be easily removed with some special mold spray and elbow grease.

There is also a chance that the mold can pose a severe health risk. If your inspector notices mold but can’t identify it, it’s a good idea to call in a specialist. A company that specializes in mold can help assess its danger and get rid of it for you. also It can be expensive and is something to consider.


Foundation issues are the most dreaded issue for home buyers. If the issue is caught early, while it’s still minor, it could be an easy and cheap fix. However, repair bills can quickly run up to more than five figures depending on how big the house and problem are.

If the integrity of a home’s foundation is questionable, many buyers won’t risk it and will walk away. This can be the best decision, especially if you do not have the finances to fix the issue.

Even if you love the home, it may not be worth taking a risk on buying it. If you still wish to move forward with the purchase, calling in a structural engineer who specializes in foundations is your best call. They will help you further understand the problem and give you all the information to hopefully negotiate with the seller.

Lack of Permits

It could come back to hurt you if the previous owner did any upgrades without the necessary paperwork. The first thing you should be doing is questioning the quality of the work done.

The biggest issue is that many homeowners’ insurance will not include any damages from work that was not permitted. So, if your home burns down because the work was not done properly, your insurance company may not cover it.

Other Potentially Costly Threats

Some issues can potentially cause issues in certain parts of the country. In some places, it was common for people to bury oil tanks in their yards to supply heating furnaces. If your new home has one of these in the yard, and it starts leaking into the soil you could be responsible for the clean-up costs.

Another issue could be plumbing with polybutylene pipes. Polybutylene pipes were seen as “the pipes of the future” and were used from 1978 to 1995. They were light, cheap, and easy to work with until it was discovered  that chlorinated water reacts with the plastic to undermine it.

What Happens When You Move Forward on a Home With a Major Issue?

You can walk away from your deal if the inspection shows major defects when your purchase agreement/sales contract has a home inspection contingency. In this situation, the problem will be the homeowners’, not yours.

If you  love the home, you can negotiate with the seller instead of backing out. You may even have an agreement where the seller pays for all of the repairs. Maybe you choose to go another route and get a price reduction that would cover the cost of the repairs.

You should know that you need to proceed with caution if you choose to get a price reduction to cover the cost. It may turn out that the issue is worse than predicted, and that will fall on you to cover the additional issues. However, if the repairs turned out to not be that bad, you would gain a little bit of savings from it. You should carefully weigh all of your options when deciding to move forward with a home that has had a questionable inspection.



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