The Top 9 Things That Might Fail a Home Inspection

“What can cause a house to fail an inspection?” is a question both buyers and sellers might have during a home sale. The truth is inspections don’t end in a simple pass or fail, but certain issues on the report can raise red flags and lead to buyers walking away. 

A clean inspection report—or a “passing” inspection—will only note minor issues that are either just cosmetic or won’t be too expensive to fix. On the other hand, a “failing” report often points to expensive, complicated, or time-consuming repairs that might be red flags to buyers.

9 things that fail a home inspection

Whether buying a home in Austin, TX or selling a house in Portland, OR, these are the things many buyers might consider “failing” the home inspection — and sellers should expect negotiations around these repairs.

1. Structural or foundation repairs

“When we flag structural issues—cracks in the foundation, shifting walls, or sloping floors—it often sends buyers running, especially if it’s the first home they’ve considered seriously,” shares Curt Kloc, founder of nationwide inspection franchise Inspections Over Coffee.

But what is considered “normal” or “concerning” can vary by region, Kloc says. 

“In places like Texas, expansive clay soils can cause seasonal shifting, and minor movement might be common—but in areas like Colorado or the Pacific Northwest, even small signs of settling raise big red flags.”

Common structural red flags

• Foundation cracks or settling: Small hairline cracks are common, but wide, horizontal or stair-step cracks can mean shifting or instability
• Bowed or leaning walls: Indicates pressure from soil, water, or poor construction.
• Uneven or sloping floors: Can mean underlying foundation or support beam problems.
• Doors and windows that stick: Not always bad, but could be a sign of shifting frames.

National cost ranges:

• Minor crack repairs: $250–$800
• Average foundation repair: $2,200–$8,100 (national average around $5,100)
• Severe cases (bowing walls, underpinning, major settlement): $10,000–$20,000+

So are structural notes just cosmetic, or a money pit? Either way, Kloc says, “structural repairs usually require engineers, permits, and deep pockets. That’s not the kind of surprise people want when buying a new home.”

2. Aging or damaged roof

The roof can be another expensive repair that can snowball into further issues—and put many buyers on high alert. Since it protects the home from the elements, even small issues can turn into major water damage, mold growth, or a reduction in energy efficiency.

Common roof red flags

• Missing or damaged shingles: Leaves the home vulnerable to leaks.
• Worn or curling shingles: A sign the roof is nearing the end of its life.
• Poor flashing around chimneys or vents: A leading cause of hidden water intrusion.
• Sagging rooflines: Could point to structural weakness or prolonged water damage.
• Improper drainage or clogged gutters: Often overlooked, but can funnel water toward the foundation.

National cost ranges:

• Minor roof repairs: $150–$1,500
• Average roof replacement: $5,800–$12,000
• Premium materials (tile, slate, metal): $15,000–$30,000+

3. Outdated or failing plumbing

Sewer issues are one of those hidden problems that can turn into huge expenses, and they’re often the last thing buyers think about until it’s too late, says Kloc. 

“Even though it’s not included within the scope of a normal home inspection, most smart home inspection companies offer sewer scopes as an add-on service, even on brand new homes, where we’ve found the sewer line leads to a dead end.”

Plumbing problems can range from minor annoyances to major hazards. Leaks, outdated piping materials, and poor water pressure may not always be visible, but they can cause significant hidden damage like mold, wood rot, and even structural issues.

Common plumbing red flags

• Leaky pipes or fixtures: Can lead to water damage and mold growth if left unaddressed.
• Outdated materials: Galvanized steel or polybutylene pipes are prone to corrosion and failure.
• Low water pressure: May signal clogged pipes, leaks, or failing supply lines.
• Slow drainage or backups: Often linked to clogs, damaged sewer lines, or tree root intrusion.
• Water stains on ceilings or walls: Visible signs of leaks that may be more extensive behind the surface.

National cost ranges:

• Minor leak repair: $150–$350
• Pipe replacement (per section): $500–$2,000
• Whole-home repiping: $4,000–$15,000+
• Sewer line repair/replacement: $3,000–$7,500+

The biggest expense in re-plumbing isn’t just the pipes themselves, Kloc mentions. “Roughly half the cost is plumbing work, but the other half comes from repairing everything you had to open up—drywall, paint, tile, and other finishes. So a $10,000 re-plumb can easily turn into a $20,000 project.”

4. Old electrical systems

Kloc says that buyers can be blindsided when outdated electrical panels like Zinsco or Federal Pacific (FPE) are flagged during the inspection.

“These were widely used in the mid-20th century, and while they may ‘look’ fine, they have a well-documented history of failure—including not tripping when overloaded, which can lead to fires,” he explains.

But remediating electrical issues isn’t just a matter of replacing the panel. “In many cases, the entire system needs to be evaluated,” Kloc says. “Some homes still have aluminum branch wiring, and depending on the region and the insurer, remediation options vary.”

Common electrical red flags

• Outdated panels: Fuse boxes or old breaker panels that can’t handle today’s electrical loads.
• Exposed or frayed wiring: A serious fire hazard.
• Lack of GFCI outlets: Missing in kitchens, bathrooms, and outdoor areas.
• Aluminum or knob-and-tube wiring: Older wiring types that are no longer considered safe.
• Overloaded circuits: Signs of frequent tripped breakers or unsafe DIY work.

National cost ranges:

• GFCI outlet installation: $130–$300 each
• Electrical panel upgrade: $1,200–$3,500
• Rewiring a home: $6,000–$20,000+

“It’s an expensive fix that comes with zero excitement—nobody walks into a home saying, ‘Wow, I love what you did with the upgraded service panel,” Kloc says. “Unlike a kitchen or bathroom reno, electrical remediation is a cost that never feels ‘worth it,’ but it’s absolutely necessary.”

5. Old or failing heating, ventilation and air conditioning (HVAC)

Heating and cooling systems aren’t always as critical as some of the other items on this list, but when they’re old, poorly maintained, or unsafe that’s when an HVAC might “fail” the inspection.

A system with no maintenance records, dirty filters, or uneven heating and cooling can indicate looming repair costs, even if it’s technically working the day of the inspection. A cracked heat exchanger in a gas furnace, for example, can lead carbon monoxide into the home, and if the unit is “at or near the end of its service life” it could be thousands of dollars to replace.

Common HVAC red flags

• Old or outdated units: Typical lifespan is 15–20 years
• Poor maintenance: Dirty filters, lack of service records
• Uneven heating or cooling: May indicate ductwork or system issues
• Unusual noises or smells: Signs of mechanical failure or mold in ducts
• Improper installation: Systems that don’t meet modern efficiency standards

National cost ranges:

• Annual servicing: $150–$500
• Furnace replacement: $3,000–$7,500
• Central AC replacement: $4,500–$12,000

6. Water damage and mold

Excess moisture can be one of the biggest red flags in a home inspection because even small leaks can cause major problems. Inspectors will be looking for stains on ceilings, warped floors, or bubbling paint often that can mean hidden damage behind the walls, and buyers worry that what they see is only part of the story. Without being properly addressed, water can weaken framing, rot wood, and put the entire structure of the home at risk.

Mold is also a “nope” for buyers that can stem from water inside the home. More importantly, mold can point to ongoing issues, like a roof leak, bad ventilation, or drainage problems, that need to be fixed to prevent mold from coming back. Because of the health risks and potential for even more damage, water and mold issues can be common home inspection “fails.”

Common moisture red flags

• Water stains on ceilings, walls, or floors
• Musty smells: Often a sign of hidden mold
• Warped or soft wood: Indicates prolonged water exposure
• Mold growth in bathrooms, attics, or basements
• Salt residue/deposits or dampness in basements/crawlspaces

National cost ranges:

• Water damage cleanup: $1,200–$5,000
• Mold remediation: $1,500–$6,000+
• Severe cases (widespread structural damage): $10,000+

7. Drainage and grading

When yards are sloped toward the house instead of away from it, or when gutters and downspouts aren’t doing their job, water can pool around the foundation and seep into basements or crawlspaces. While drainage issues may not sound as urgent as a cracked foundation or failing roof, they can cause just as much long-term damage if ignored. 

Luckily, fixes can be as simple as cleaning gutters or extending downspouts, but sometimes, full yard regrading or installing a French drain is required to fix the issue.

Common drainage red flags

• Pooling water near the foundation
• Improper slope of yard or driveway
• Clogged or broken gutters and downspouts
• Basement leaks linked to exterior water flow

National cost ranges:

• Gutter cleaning: $150–$350
• Gutter replacement: $1,000–$2,500
• Regrading a yard: $1,500–$5,000+

8. Pest and insect damage

Pests like termites, carpenter ants, and rodents may be small, but the damage they cause can be massive. Termites can be the most destructive, and are estimated to cause billions of dollars in property damage each year in the U.S.

Because pest activity can go largely unseen, the potential extent of the damage can make buyers nervous. Treating an infestation is only part of the cost. Repairing structural damage can run into tens of thousands of dollars, and buyers will want to know that the problem has been resolved and won’t come back and cause even more damage. 

Common pest red flags

• Mud tubes or termite tunnels on foundations
• Hollow-sounding wood or visible damage
• Frass (sawdust-like droppings) from wood-destroying insects
• Evidence of rodents in attics, basements, or crawlspaces
• Seeing carpenter ants inside the home

National cost ranges:

• Termite inspection: $75–$150
• Termite treatment: $600–$2,500
• Structural repairs due to pests: $2,000–$8,000+

9. Safety and code violations

Many inspections uncover safety hazards or unpermitted work that doesn’t meet building code, but it’s more common than buyers realize. “What we often find in the field are creative shortcuts that may not be failing today, but won’t pass inspection for future upgrades,” Kloc says.

Even if the issues seem small or insignificant, they can affect financing, insurance approvals, or future renovations. “That means what looks like a small fix today can become a big bill later, especially when it comes time for a kitchen remodel, a basement finish, or a home addition.

It’s not always about immediate failure—it’s about how unpermitted work can snowball into higher costs down the road,” Kloc warns.

Common safety red flags

• Missing or non-functioning smoke/CO detectors
• Broken or missing stair railings
• Unpermitted additions or DIY electrical/plumbing work
• Windows that don’t open properly for egress
• Improperly vented appliances
• Missing attic insulation

National cost ranges:

• Smoke/CO detector installation: $50–$200 each
• Adding railings: $500–$2,000
• Correcting unpermitted work (varies greatly): $1,000–$10,000+ 

What happens if you fail the home inspection?

If big or intimidating repairs come up on the inspection report, buyers might balk at the cost and either request credits at closing to address the issues, or walk away all together if an agreement can’t be reached.

“Most reasonable sellers will agree to handle smaller, safety-related fixes: things like a leaking faucet, a missing handrail, or a GFCI outlet upgrade,” says Kloc. “Those are the kinds of issues that don’t cost much but bring peace of mind to the buyer.”

Where negotiations often get tricky, says Kloc, is if big-ticket items are old or outdated but still technically working—“like a 20-year-old roof, a 15-year-old AC unit, or a water heater well past its expected lifespan. Buyers see these as near-term expenses, but sellers argue, ‘It works today, why should I replace it?’”

>>See More: What happens after the home inspection for sellers?

While no one loves spending thousands of dollars on a new roof or plumbing, the truth of the matter is that what’s found on the inspection report can be critical both to the safety of the future homeowner and their budget. 

“Buyers and sellers both need to weigh whether a credit, price adjustment, or shared cost makes more sense than letting the deal fall apart,” Kloc advises. And in the end? While complex and expensive repairs are the likely reasons a home inspection might “fail”, the reality is different repairs matter to different buyers—and both buyer and seller should come to the table prepared to compromise.

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