Can a home fail a home inspection?

Technically, you can’t pass or fail a home inspection. A home inspector will point out the good, the bad, and the ugly… but they’ll never pass or fail a home. What you do with the home inspection report is up to you.

But if a home could fail a home inspection, here are some things that would contribute to failure:

An incomplete home inspection

When a home inspector can’t access and inspect everything in the home, it’s an incomplete inspection. This leads to frustration and delays in the purchase process, and nobody is happy about it.

To prepare for a home inspection, start by having everything turned on and plugged in. When appliances are shut down, unplugged, or pilots are off, there’s usually a good reason for it. Home inspectors won’t risk causing damage when we find these conditions.

And perhaps most importantly, ensure everything is accessible. This includes the attic, crawl space, furnace, water heater, electric panel(s), sewer cleanout, and detached garages. For a full list, check out How to prepare your home for the inspection.

Big surprises

Most home buyers go into a home inspection with an idea of what to expect, especially when they have a knowledgeable real estate agent. But when home buyers are blindsided by big surprises, transactions can sometimes fall apart.

To help avoid surprises, some real estate agents encourage their sellers to get a pre-listing home inspection. In almost all situations, this eliminates big surprises later on.

But I did say almost. Make sure you hire a knowledgeable, experienced inspector. We recently inspected a home that had already been pre-inspected, but the inspector failed to mention knob-and-tube wiring all over the home. That was a big miss.

Some of the biggest defects that do kill deals are structural problems, extensive moisture damage, electrical hazards, major roof problems, and old or failed sewer lines. For more on that topic, check out What is the biggest red flag in a home inspection?

Unreasonable demands after the inspection

No house is perfect, especially used houses. If you see the home inspection as a club to beat the seller over the head with on price, you’ll be disappointed.

Experienced real estate agents tell their buyers this isn’t what the inspection is for. If you can’t agree on a fair purchase price before the inspection, don’t expect the inspection to make up the difference.

When a buyer makes nitpicky, unreasonable demands of a seller after the inspection, who gets blamed when the deal falls apart? The home inspector, of course. For more on this topic, check out Negotiations after the inspection, part 3: Reasonable negotiation items.

Where pass/fail does exist

Here in the Twin Cities, we have pre-sale evaluations, called Truth-in-Sale of Housing (TISH), in cities like Minneapolis and Saint Paul. These focus on safety and code compliance, but even when repairs are required, there’s no such thing as a “failed” inspection. Buyers can assume responsibility for repairs, so this should rarely hold up a purchase.

The one place that really can fail is the appraisal. If a home doesn’t appraise high enough, a lender might refuse the loan or lower the amount of the loan. Also, FHA and VA appraisals can sometimes mandate repairs. I’m no expert when it comes to the lending and appraisal side of purchasing a home, but having gone through this process many times, I’ve learned that this is really the one area where a home might not pass.

Conclusion

A home cannot pass or fail a home inspection. Beauty is in the eye of the beholder; pass or fail is in the eye of the buyer. When a deal falls apart after the home inspection, it’s usually because of big surprises, unmet expectations, or failed negotiations.

FAQs

Does a bad home inspection mean I should walk away?

Everything that comes up during a home inspection can be fixed. Better questions are “Am I willing to deal with the repairs?” and “Will the seller negotiate?”

Can the seller see my report?

Only if you share it with them. It’s unethical for a home inspector to share the inspection report with anyone the client hasn’t explicitly authorized.

How many defects are “normal” in a home inspection report?

Most home inspection reports will have dozens of recommendations for improved safety, maintenance, and repairs. Focus on the big stuff.

Can I back out of the purchase after the inspection?

Maybe. In Minnesota, most purchases are contingent on a home inspection, and buyers typically have a week or less to complete it, depending on how the purchase agreement was written. This is called the inspection contingency window. Within this period, the buyer can back out of the purchase based on the inspection findings.

Does a new-construction home need an inspection?

YES. I’ve blogged about this topic many times and shared hundreds of photos of new-construction findings. Nobody ever regrets getting a new home inspected. More on that here: New Construction Inspections.