When to Walk Away After Home Inspection: 6 Signs to Rethink Your Purchase

Home inspections play an important role in the real estate process, especially for home buyers.It's the homeowner’s opportunity to uncover any hidden issues lurking beneath the surface of their dream home. 

A thorough home inspection can save homeowners from a financial nightmare down the road, and ensure a safe and sound property. This article will equip homeowners with the knowledge to identify 10 red flags that may appear during a home inspection, empowering you to make informed decisions about whether to move forward with the purchase.

At a glance:

• A home inspection helps identify hidden issues in a property, potentially saving you money on repairs in the long run.
  

• The home inspector's report will detail any problems found and potential repair costs, allowing you to make informed decisions.
  

• If the inspection reveals serious issues, consult with your real estate agent to negotiate with the home seller for necessary repairs, a lower price, or consider walking away from the purchase.
  
  

Importance of preparing for a home inspection

The thrill of finding the perfect home can quickly sour if you find hidden problems lurking beneath the surface after the initial excitement fades. This is why a home inspection is such a valuable resource. It’s a comprehensive examination that unveils the property’s true condition, empowering you to make informed decisions before committing to a (potentially) life-long investment. 

A home inspection is an important step in the home-buying process. It offers an unbiased assessment of the property’s condition. Fortunately, to get the most out of a home inspection, there is some preparation homeowners can take. 

Steps homeowners should take before 

Before the inspector arrives, there are steps you can take to maximize transparency and gain valuable insights. 

• Request a copy of the home's maintenance records—These records will shed light on any past repairs, potential problems, or routine maintenance the house has undergone, allowing you to make informed decisions about the property.
  
  
• Be present during the inspection—The inspector’s findings might be technical, but this allows you to clarify points, ask questions, and gain a deeper understanding of the condition of the house.
  
  

Understanding the home inspectors role

A qualified home inspector is a vital part of the home-buying process. They possess the expertise to meticulously examine a property's various systems and components. 

Home inspectors possess the knowledge and experience to thoroughly examine a property's various systems and components, from the foundation and roof to the plumbing and electrical systems.

Following the inspection, you'll receive a detailed report outlining the inspector's findings. This inspection report gives you leverage in negotiations with the home seller regarding any necessary repairs It will not only detail any identified issues but also provide potential repair costs. With this information, you can approach the home buying process with confidence, with a thorough understanding of the overall condition of the property and with a clear picture of the potential investment you're considering.

Warning signs

Your home's exterior is its first line of defense against the elements. Wear and tear happens as homes age, but during a home inspection, it's important to keep an eye out for details that can reveal problems lurking beneath the surface. Understanding the potential for structural and electrical issues helps you anticipate possible impacts on your closing costs and budget accordingly.

Armed with a comprehensive inspection report and an understanding of potentially costly repairs, you can make an informed decision that includes evaluating the implications for your homeowners insurance. This careful consideration ensures that you are not only securing a property that meets your standards but also managing potential financial risks effectively.

1. Cracks in the foundation or siding

A solid foundation is crucial for a safe and secure home, providing stability and support for everything above. During a home inspection, careful attention is paid to the foundation, as issues can be substantial. These could be costly repairs, requiring necessary interventions that can significantly add to the overall repair costs.

Small cracks in the foundation aren’t uncommon, and may not be a major cause for concern. However, substantial cracks in the foundation or siding can also be more than just cosmetic imperfections; they can also be a red flag, indicating underlying structural problems or water damage that have compromised the structural integrity of the home. ¹

The size, location, and even pattern of cracks will be evaluated by an inspector to determine their severity and risk. For instance, large, horizontal cracks could indicate foundation settling or movement, and require extensive—and costly—repairs.

2. Uneven and sagging floors 

Sagging floors, like large cracks, can be a warning sign of foundation problems or structural deterioration, and shouldn’t be ignored. These can be caused by foundation issues to problems with support beams.

Similarly, uneven floors can be a sign of damage. They not only detract from a home’s aesthetic appearance but can also be a telltale sign of foundational or structural problems that need addressing.²

2. Drainage woes and water damage

A proper drainage system directs water away from the house, preventing moisture build-up around the foundation and safeguarding your home from water damage. 

Poor drainage can lead to water seepage and water damage, which can turn into basement flooding, foundation issues, and mold and fungi growth. Indications of poor drainage can include discoloration, standing water, musty odors, or visible mold. If the inspection reveals a poorly designed or clogged drainage system, the cost of repairs could be considerable. Not only is this type of damage unsightly, it can also pose health risks to you and your loved ones. 

3. Electrical and plumbing concerns

A home inspection will also evaluate the home’s mechanical and electrical systems, to ensure they’re functioning efficiently, and providing a comfortable and safe living environment. 

• HVAC system—The inspector will assess your heating, ventilation, and air conditioning (HVAC) system to ensure it's operating efficiently, for proper functionality, and to identify any potential issues.
  
  
• Electrical systems—Flickering lights and faulty wiring pose a serious fire hazard and should be addressed immediately. The inspector will examine the electrical system, looking for signs of outdated wiring, overloaded circuits, or potential fire risks.
  
  
• Plumbing systems—A leaky faucet might seem like a minor inconvenience, but plumbing problems can lead to bigger issues like water damage and mold growth. The inspector will check for leaks, clogged drains, and the overall functionality of the plumbing system. They'll also assess the water pressure and ensure all fixtures are working properly
  
  

5. Unwanted guests

Evidence of a past or present pest infestation, such as termites or carpenter ants, shouldn't be brushed aside. These wood-destroying insects can cause significant structural damage if left unchecked. The cost of repairing the damage caused by pest infestations, not to mention the cost associated with eliminating them, can be a significant financial burden. A detailed pest inspection can uncover hidden infestations, leading to crucial repair requests to address any damage found.

6. Environmental concerns

A home inspection isn’t just about checking for cracks in the walls or a leaky faucet. It also plays a crucial role in uncovering potential environmental hazards that could impact your health and safety and require remediation. 

• Mold and fungi—Mold growth can be a serious cause for concern. It can cause not only respiratory problems, but also cause property damage. If mold is found, further remediation may be necessary.
  
  
• Radon—Radon is a naturally occurring radioactive gas that can seep into homes through cracks in the foundation.³ Long-term exposure to radon increases the risk of lung cancer. If elevated levels are found, mitigation strategies can be implemented to reduce the risk.
  
  
• Legacy hazards—Homes built before 1978 may contain asbestos or lead paint. Asbestos is a fibrous material that can cause serious health problems if inhaled. Lead paint, especially when chipped or peeling, can be a poisoning hazard.
  
  

Next steps after identifying red flags 

If the inspection reveals red flags, it’s important not to panic. This is why including a home inspection contingency in your purchase agreement is crucial, as it allows you to back out based on the inspection report findings. If the report uncovers serious issues, here’s how to navigate the situation calmly and strategically: 

• Decipher the severity—Not all red flags are deal breakers. Consult your home inspector to gain a clearer understanding of the severity of each issue. They can explain the potential consequences if left unaddressed and the estimated repair costs.
  
  
• Confirm and quantify—While the inspector's expertise is valuable, consider getting quotes from qualified contractors to establish a realistic budget for repairs.
  
  
• Negotiate—Armed with information about the repairs and their costs, you can approach the seller. Negotiations can involve several options⁵:
  
  
  • Requesting repairs—You can ask the seller to fix the identified issues before closing.
    
    
  • Lower purchase price—Another option is to propose a lower purchase price that reflects the cost of repairs.
    
    
  • Walking away—If the red flags are too significant or the seller is unwilling to budge, you may have to walk away from the purchase. Remember, it's critical you prioritize your long-term financial security and well-being.
    
    

Owning your future

The key is to approach the situation with a clear head and all the facts at hand. Recognizing and addressing red flags during a home inspection is crucial for a successful home purchase. By understanding the potential problems and the steps involved in addressing them, you are empowered to make informed decisions about your investment. 

Don't hesitate to walk away from a purchase if the issues are too extensive or the seller is unwilling to negotiate repairs. There will be other houses on the market, and this may not be your dream home after all. Remember, a thorough inspection is an invaluable tool that can save you from a financial headache down the road.

As you move forward with your home purchase, consider consulting with an independent home insurance agent from Openly to discuss your home insurance options. These agents can provide personalized assistance, helping you navigate the complexities of buying home insurance. They will tailor your policy based on the specific insights gained from your home inspection, ensuring that every aspect of your new investment is protected. This careful selection of coverage is critical, as it not only secures your property but also prepares you for any potential home insurance claims in the future. Remember, a thorough home inspection, followed by the strategic purchase of a robust home insurance policy, sets the foundation for a secure and satisfying homeownership experience.

*We provide this information to help you understand insurance. Any coverage is subject to the terms of your policy. Please refer to your policy and declarations page for complete terms, conditions and coverage details.

^1. Deane Biermeier. “Everything You Need To Know About Cracks In Foundation.” Forbes. Published 11 January 2023. Accessed 20 June 2024. https://www.forbes.com/home-improvement/foundation/cracks-in-foundation/ 

^2. The Foundation Specialists. “7 Signs Your Home Might Need Foundation Repair.” TheFoundationSpecialists.com. Accessed 20 June 2024. https://thefoundationspecialists.com/blog/home-foundation-repair-signs/ 

^3. United States Environmental Protection Agency. “Home Buyer’s and Seller’s Guide to Radon.” EPA.gov. Accessed 20 June 2024. https://www.epa.gov/sites/default/files/2015-05/documents/hmbuygud.pdf 

^4. United States Environmental Protection Agency. “Protect Your Family from Sources of Lead“ EPA.gov Accessed 20 June 2024. https://www.epa.gov/lead/protect-your-family-sources-lead#:~:text=If%20your%20home%20was%20built,states%20banned%20it%20even%20earlier

^5.  Kim Porter. “How to Negotiate After a Home Inspection.” Credible. Published 21 March 2024. Accessed 20 June 2024. https://www.credible.com/mortgage/negotiate-after-home-inspection