📋 Before We Start: Your Inspection Contingency
If your contract includes an inspection contingency (it should!), you can back out and get your earnest money back if the inspection reveals issues you're not comfortable with. This is your protection. Use it.
The 15 Home Inspection Red Flags
Foundation Problems
Repair Cost: $10,000 - $100,000+
Warning Signs:
- ⚠️ Large cracks (>1/4 inch)
- ⚠️ Doors/windows that stick
- ⚠️ Uneven floors
- ⚠️ Water in basement
Our Verdict: Walk away unless seller fixes or massive price reduction
Major Roof Damage
Repair Cost: $8,000 - $30,000
Warning Signs:
- ⚠️ Missing/curling shingles
- ⚠️ Sagging roof line
- ⚠️ Multiple layers of roofing
- ⚠️ Active leaks
Our Verdict: Negotiate full replacement or walk
Extensive Mold
Repair Cost: $2,000 - $30,000+
Warning Signs:
- ⚠️ Visible mold growth
- ⚠️ Musty odor
- ⚠️ Water stains
- ⚠️ Health symptoms during viewing
Our Verdict: Get mold specialist. Walk if structural or HVAC affected
Termite/Pest Damage
Repair Cost: $3,000 - $50,000+
Warning Signs:
- ⚠️ Hollow-sounding wood
- ⚠️ Mud tubes on foundation
- ⚠️ Sawdust piles
- ⚠️ Damaged wood structures
Our Verdict: Get pest inspection. Walk if structural damage extensive
Faulty Electrical System
Repair Cost: $5,000 - $20,000
Warning Signs:
- ⚠️ Knob and tube wiring
- ⚠️ Aluminum wiring
- ⚠️ Overloaded panels
- ⚠️ Ungrounded outlets
Our Verdict: Fire hazard. Require upgrade or walk
Plumbing Nightmares
Repair Cost: $5,000 - $25,000
Warning Signs:
- ⚠️ Polybutylene pipes
- ⚠️ Lead pipes
- ⚠️ Sewer line issues
- ⚠️ Low water pressure everywhere
Our Verdict: Get sewer scope. Walk if main line needs replacement
HVAC System Failure
Repair Cost: $5,000 - $15,000
Warning Signs:
- ⚠️ System 15+ years old
- ⚠️ Uneven heating/cooling
- ⚠️ Strange noises
- ⚠️ High utility bills
Our Verdict: Negotiate replacement cost credit
Water Damage History
Repair Cost: $2,000 - $20,000+
Warning Signs:
- ⚠️ Water stains on ceilings/walls
- ⚠️ Warped flooring
- ⚠️ Peeling paint
- ⚠️ Efflorescence on basement walls
Our Verdict: Investigate source. Walk if ongoing or structural
Asbestos Present
Repair Cost: $1,500 - $30,000
Warning Signs:
- ⚠️ Homes built before 1980
- ⚠️ Popcorn ceilings
- ⚠️ Old floor tiles
- ⚠️ Pipe insulation
Our Verdict: OK if undisturbed. Budget for removal if renovating
Unpermitted Work
Repair Cost: Varies widely
Warning Signs:
- ⚠️ Additions not on records
- ⚠️ DIY electrical/plumbing
- ⚠️ Converted garage
- ⚠️ Basement bedroom without egress
Our Verdict: May affect insurance/resale. Negotiate or walk
Radon Levels High
Repair Cost: $800 - $2,500
Warning Signs:
- ⚠️ Test results >4 pCi/L
- ⚠️ Basement or ground floor
Our Verdict: Easily fixable with mitigation system. Negotiate cost
Lead Paint
Repair Cost: $1,000 - $10,000
Warning Signs:
- ⚠️ Homes built before 1978
- ⚠️ Chipping/peeling paint
- ⚠️ Children will live there
Our Verdict: OK if intact. Budget for remediation if renovating
Grading/Drainage Issues
Repair Cost: $1,000 - $10,000
Warning Signs:
- ⚠️ Water pooling near foundation
- ⚠️ Sloping toward house
- ⚠️ Wet basement
- ⚠️ Erosion
Our Verdict: Fixable but investigate for water damage
Chimney Problems
Repair Cost: $1,000 - $10,000
Warning Signs:
- ⚠️ Cracked flue
- ⚠️ Missing cap
- ⚠️ Damaged masonry
- ⚠️ Creosote buildup
Our Verdict: Usually fixable. Get chimney inspection
Old/Damaged Windows
Repair Cost: $5,000 - $20,000
Warning Signs:
- ⚠️ Single-pane glass
- ⚠️ Rotted frames
- ⚠️ Foggy double-pane
- ⚠️ Drafts
Our Verdict: Cosmetic/efficiency issue. Negotiate credit
🏠 Found Issues? Know Your Options
If you need to walk away and find a different home, make sure you're pre-approved and ready to make another offer.
Get Pre-Approved & Keep Shopping →✅ What's NOT a Deal Breaker (Negotiate Instead)
These issues are common and fixable. Use them to negotiate, not walk away:
- ✅ Cosmetic issues (paint, carpet, fixtures)
- ✅ Minor roof repairs (few missing shingles)
- ✅ Old but functional HVAC
- ✅ Radon (easily mitigated)
- ✅ Minor plumbing issues (leaky faucets)
- ✅ Old windows (efficiency issue, not safety)
- ✅ Outdated electrical panel (if safe)
- ✅ Minor grading issues
- ✅ Cosmetic cracks (hairline, <1/8 inch)
- ✅ Dated kitchen/bathrooms
Your Options After a Bad Inspection
1. Negotiate Repairs
Ask the seller to fix the issues before closing. Get contractor estimates to support your request.
2. Negotiate Price Reduction
Ask for a lower price to cover repair costs. You fix it yourself after closing.
3. Request Closing Credit
Seller gives you cash at closing to cover repairs. Keeps the sale price the same.
4. Walk Away
Use your inspection contingency to cancel the contract and get your earnest money back.
Frequently Asked Questions
What are the biggest home inspection red flags?
The biggest red flags are: foundation problems ($10K-$100K+), major roof damage ($8K-$30K), extensive mold ($2K-$30K+), termite damage ($3K-$50K+), and faulty electrical ($5K-$20K). These are expensive and may indicate deeper problems.
Should I walk away from a house with foundation issues?
Usually yes, unless the seller agrees to fix it completely or offers a massive price reduction ($50K-$100K+). Foundation repairs are expensive, disruptive, and may not fully solve the problem. Get a structural engineer's opinion.
Can I back out after a bad home inspection?
Yes, if you have an inspection contingency. You can back out and get your earnest money back if the inspection reveals issues you're not comfortable with. This is exactly what the contingency is for.
🏠 Ready to Find the Right Home?
Get pre-approved so you're ready to make an offer when you find a home that passes inspection.
Get Pre-Approved Today →Related Guides
Michael Thompson
Home Inspection Expert • 15+ Years Experience
Michael has inspected over 3,000 homes and knows exactly which issues are deal breakers and which are just negotiating points.