Want to Avoid Regrets? Here's When to Walk Away After a Home Inspection

By Amy Beardsley

Posted on August 5th, 2022

When To Walk Away after a Home Inspection | What Is a Home Inspection? | What Does a Home Inspection Report Include? | Home Inspection Deal Breakers | What To Do After a Home Inspection with a Bad Report

An illustration of a man in a suit using a magnifying glass to perform a home inspection.

Are you a fan of fixer-upper houses? Home inspections can help you know what you’re getting into. But which issues are deal breakers, and when is the risk of repairing a home not worth it?

There’s not a hard-and-fast rule for when to walk away after a home inspection — it comes down to what you are willing to fix.

According to a 2022 survey of millennial homebuyers by the Clever Data Center, 82% of millennials said they'd purchase a fixer-upper, a significant leap from the 67% who said the same in 2019.

However, one in four of these homeowners ended up with regrets over their decision to ignore their future home's faults.

If you want to avoid regrets and minimize the stress of purchasing a home, we recommend working with a trustworthy real estate agent. A good real estate agent can recommend reputable home inspectors and help you determine whether a home's issues are relatively minor — or potential deal breakers.

If you decide to proceed with purchasing a fixer-upper, you'll also want an expert negotiator on your side. A real estate agent can help you negotiate repairs and pricing to make sure you get the best possible deal, instead of breaking the bank and still having to scrounge up thousands for necessary repairs.

Our friends at Clever Real Estate can match you with the best real estate agents from top-rated brokers including Keller Williams, Coldwell Banker, Century21, and more. Best of all, buyers in most states can receive up to 0.5% cash back after closing — cash you can use for repairs or anything else you'd like!

👋 Meet your free agent matches today!

What Is a Home Inspection?

Most homebuyers ‌hire a home inspector after the seller accepts their offer and before closing the sale. Home inspections examine a property’s condition to alert the buyer to potential problems. They review the home’s structure and primary systems, including:

  • Plumbing
  • HVAC
  • Electrical panel
  • Appliances
  • Roof
  • Foundation

Home inspections identify things like water stains that could indicate leaks, appliance age and working condition, roof condition, and pest infestations. However, buyers may need a separate inspection for termites and other bugs or rodents.

What Does a Home Inspection Report Include?

Home inspection reports typically review the home’s HVAC, plumbing, and electrical systems. In the report, the inspector notes the condition of the roof, rain gutters, walls, floors, ceilings, windows, doors, and attic, including insulation. They will also look at the fitness of the basement, foundation, and other structural pieces.

Keep in mind that it’s normal for a home to have some problems, even with new construction. However, older homes tend to have more items that need repair.

What Are Home Inspectors Not Allowed to Do?

Home inspectors can speak to you about the facts of the home but shouldn't speculate on potential hazards, system life expectancy, or building code compliance.

Also, they can't inspect a home with immediate safety hazards, like a weak floor that could collapse under them.

Home Inspection Deal Breakers

Once you get the home’s inspection report, you may discover concerns that lead to you rescinding your offer. Typically, you’d walk away if the report showed significant repairs or environmental concerns.

With more than half of millennials (54%) concerned about making significant repairs, some conditions deter even the most eager buyers. The most common deal breakers include:

Major Mechanical Issues

The most common items requiring repair are the furnace, air conditioning, water heater, electrical system, and plumbing.

Initially, it may not seem like a significant problem. But something like an electrical problem could potentially be dangerous and expensive to fix.

Neighborhood Issues

A less-than-ideal neighborhood is a deal breaker for over half of homebuyers. Sometimes a home seems perfect in the daytime, but maybe you didn’t notice airplanes coming in for a landing the first time you visited and now they keep you up at night.

Drive through the neighborhood periodically at various times and on different days to get a feel for it. That way, you’ll know what you’re getting yourself into.

Structural Issues

Foundation, roof, and other structural problems can be difficult and costly to fix. Over half of millennials said they would walk away from a house with foundation deterioration, while half said a leaky roof would be a deal breaker. You might also run into split rafters in the attic or rotted wood.

» Read: Should You Buy a House With a Bad Roof?

Cosmetic Issues

Cosmetic issues rarely affect the safety of the structure. However, wear and tear to siding or a roof in disrepair could leave the house exposed to water or pests.

Mold

Typically, mold is a sign of a water problem in the house. To fix it, the homeowner must first find the source of the mold, then treat the mold itself.

Dealing with mold can be very expensive. But not treating it could lead to ongoing respiratory and other health problems.

Pests

Small animals like mice, rats, or insects could infest the house. In addition, carpenter ants and termites can harm the home's structure. Either way, you wouldn’t be the first to walk away — nearly half of homebuyers consider termites, cockroaches, mice, and spiders to be deal breakers.

Environmental Hazards

Occasionally, home inspectors find lead paint, asbestos, carbon monoxide, or radon in the house. Buyers are most likely to encounter these hazards in older homes.

What To Do After a Home Inspection with a Bad Report

If you order a home inspection and the findings have red flags, you have two main options:

  • Bow out of the deal entirely. According to studies, 15% of buyers renege on their offers after receiving the inspection report.
  • Negotiate with the seller. You could use the inspection report for negotiation leverage with the seller to lower the sale price or to fork over the cash to repair or treat the issue.

If you’re unhappy with the home inspection, don’t stay silent. You could lose your earnest money if you want to walk away but wait too long to speak up about issues in the report.

You can usually get the seller to fix some things after the home inspection. An exception might be if the house is sold "as-is," meaning the seller will not negotiate if the house needs any work done. But even in that case, you should still get a professional inspection to confirm issues the seller discloses and uncover problems the seller may not have mentioned.

When To Walk Away after a Home Inspection

There is no set rule that says when to walk away after a home inspection, so it’s best to trust your intuition. If it doesn’t feel right, it probably isn’t.

You can get more leverage when you have someone in your corner. Working with a buyer’s agent you can trust can help to identify problems and negotiate the best deal with the seller.

Still looking for the perfect agent? Our friends at Clever Real Estate can help! Clever offers a free agent-matching service that personally introduces home buyers and sellers to the best, pre-vetted real estate agents in their local market. You'll get white glove service and buyers in most states can receive up to 0.5% cash back after closing!

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FAQs

What are red flags during a home inspection?

Some red flags to look out for during a home inspection include mechanical issues (like with a furnace, air conditioning, electricity, etc.), neighborhood issues (like a nearby airport or high crime rate), structural issues, mold, pests, and environmental hazards. Here’s what to look out for during a home inspection.

What should you ask a seller to fix after inspection?

After an inspection, you should ask a seller to fix any major mechanical or structural issues with the house, like electricity or foundation. You should also ask them to pay to get rid of mold and pests, if those are issues. Learn more about which issues sellers are responsible for.

When can I walk away from mold in my house?

You can walk away from mold in a house when it is determined to be “excessive.” This is a bit subjective, but according to HUD, the rule of thumb is that a house with mold is unsellable and uninhabitable if it is a serious health hazard or if the repairs will cost more than $1,000. Learn more about when to walk away from a house after an inspection.

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Posted in Seller's Disclosure, Buying a House, Home Inspection, Real Estate Negotiations