A good home inspector will hand you a 60-page report with 180 items flagged. Most of it is cosmetic or maintenance you will handle over the next decade. A small subset, however, is the difference between a home purchase and a financial mistake. These are the 15 findings that justify pausing the deal while you decide whether to walk, renegotiate, or demand repairs before closing.
Each red flag includes what it looks like, why it matters, the typical repair cost range, and the negotiation posture that usually works. Use this alongside your inspection report to triage which items matter and which are noise.
1. Horizontal foundation cracks
Hairline vertical cracks in poured concrete foundations are normal and almost always cosmetic. Horizontal cracks are different. They indicate lateral pressure from outside soil pushing the wall inward, which is a structural problem. Stair-step cracks in block foundations wider than 1/4 inch fall in the same category.
Typical cost: $5,000 to $60,000+ depending on severity. Minor crack repair starts at $5,000. Full excavation and wall reinforcement with helical piers or push piers runs $25,000 to $60,000. Posture: Get a structural engineer out ($400 to $800) before making any decision. If the engineer says active movement, you need a repair credit or a walk-away.
2. Roof at or past end of life
Asphalt shingle roofs last 20 to 30 years. Roofs approaching that age often look fine from the ground but show curling shingles, granule loss in gutters, and soft decking on inspection. An inspector will flag "functional" vs "at end of useful life." The second category is a red flag.
Typical cost: $8,000 to $25,000 for asphalt, $20,000 to $60,000 for tile or metal on larger homes. Posture: Ask for a roof replacement credit, a price reduction equal to replacement cost, or (less ideal) seller replacement before closing. Note that if the roof is too old, insurance companies may refuse to bind coverage, which can kill the deal anyway.
3. Federal Pacific, Zinsco, or Challenger electrical panels
These three panel brands were installed widely from the 1950s through 1980s and are now recognized fire hazards. Breakers in Federal Pacific Stab-Lok panels can fail to trip during overload conditions. Zinsco panels have similar failure modes. Many insurance carriers will not bind coverage on a home with these panels.
Typical cost: $2,500 to $5,000 for panel replacement. Posture: This is non-negotiable because your insurance depends on it. Either the seller replaces before closing, or you need a credit to replace immediately after. Not a walk-away, just a required repair.
4. Knob-and-tube wiring
Homes built before 1940 often still have original knob-and-tube wiring in the walls. Not dangerous by itself, but it has no ground wire, cannot safely handle modern electrical loads, and becomes a fire risk when covered by insulation (which modern homes all have). Many insurance carriers refuse or load premiums on homes with active K&T.
Typical cost: $8,000 to $25,000 for full-house rewire depending on size and access. Posture: Verify what is active vs abandoned. Abandoned K&T is fine. Active K&T needs a plan: replace immediately or negotiate a credit.
5. Polybutylene supply plumbing
Gray plastic water supply lines installed in homes from roughly 1978 to 1995. Known to fail spontaneously. Many homes with polybutylene have been involved in class-action settlements due to widespread leaks.
Typical cost: $6,000 to $15,000 for re-pipe. Posture: This is often a walk-away trigger if the seller will not credit the full replacement cost. Spontaneous failures can cause $20,000+ in water damage and insurance carriers may refuse coverage.
6. Sewer line collapse or heavy root intrusion
Main sewer lines from the house to the street are the homeowner's responsibility. On homes 40+ years old with clay or cast iron sewer lines, root intrusion and collapse are common. Standard inspections do not include sewer scopes. Always add one for $250 to $400.
Typical cost: $3,500 for minor clearing, $8,000 to $25,000 for partial replacement, up to $40,000 if the line runs under a driveway or requires permit-heavy street work. Posture: If the scope shows Grade 3 or worse root intrusion, ask for a credit equal to replacement cost. Sellers often do not know this exists until the inspector finds it.
7. Active roof or envelope water intrusion
Water stains on ceilings, baseboards pulled from walls, visible mold in bathrooms or basements, efflorescence (white mineral deposits) on foundation walls. Every one of these is a sign of active or recent water intrusion, and every one of them leads to mold if unaddressed.
Typical cost: $500 for simple flashing repair. $3,000 to $15,000 for window or door leak remediation. $10,000 to $50,000 for foundation waterproofing or envelope repair. Posture: Demand the source be found and fixed before closing. Water intrusion of unknown origin is the worst kind of red flag because the repair cost is unbounded until you find the root cause.
8. HVAC system past useful life
Furnaces and AC condensers last 15 to 25 years. An inspector will note the manufacturing date on the unit and flag systems approaching end of life. A 22-year-old furnace that still works is one bad winter from failure.
Typical cost: $5,000 to $8,000 for a new furnace, $4,500 to $8,000 for a new AC, $10,000 to $20,000 for a full dual-system replacement or heat pump conversion. Posture: Ask for a credit equal to remaining useful life proration. If the unit is dead or dying, ask for full replacement cost.
9. Galvanized steel supply plumbing
Homes built before 1960 often have galvanized pipe in the walls. Over decades, the zinc coating erodes and rust accumulates, reducing flow and eventually causing pinhole leaks. Tell-tale sign: low water pressure throughout the house.
Typical cost: $6,000 to $15,000 for re-pipe to copper or PEX. Posture: If pressure is already degraded, negotiate a credit. If flow is acceptable, put money aside knowing re-pipe is in your future.
10. Asbestos insulation or floor tile
Homes built before 1980 frequently have asbestos in pipe wrap, vermiculite attic insulation, or 9-inch floor tiles. Intact and undisturbed asbestos is not dangerous. Damaged or friable (crumbling) asbestos is.
Typical cost: $1,500 to $3,000 for pipe wrap abatement, $5,000 to $15,000 for vermiculite attic removal, $8 to $15 per square foot for floor tile abatement. Posture: If the inspector flags friable asbestos, the seller should remediate before closing, or you need a credit plus a plan to keep the material undisturbed and encapsulated.
11. Unpermitted additions or conversions
Finished basements, garage conversions, enclosed porches, or room additions done without permits. These are often fine structurally but create problems with insurance, future resale, and legal occupancy.
Typical cost: Depends. Retroactive permits range $500 to $5,000. Full structural corrections if the work was not to code can cost $10,000 to $100,000. Posture: Verify permits for any "finished" square footage. Ask the seller to obtain retroactive permits before closing or credit the estimated cost to do so.
12. Termite or wood-destroying insect damage
Visible termite tubes, hollow-sounding structural wood, carpenter ant damage in sill plates or joists. A separate wood-destroying insect report (WDI) is standard in many states and required for VA and FHA loans.
Typical cost: $1,500 to $5,000 for treatment, $5,000 to $50,000 for structural repair if damage is extensive. Posture: Treatment is a line-item repair credit. Structural damage triggers a structural engineer review and potentially a walk-away.
13. Radon above 4 pCi/L
Radon is a radioactive gas that seeps from soil into basements and lower levels. The EPA action level is 4 picocuries per liter. Higher than that, remediation is recommended.
Typical cost: $1,500 to $3,500 for a mitigation system. Posture: This is always a seller-pays-for-mitigation item. Not a walk-away, just a required repair.
14. Failed or failing septic system
Rural and semi-rural homes often rely on septic. Inspection should include a tank inspection and drain field evaluation. Signs of failure: soggy ground over the drain field, slow drainage, sewage smell, backed-up fixtures.
Typical cost: $1,500 for pumping, $8,000 to $25,000 for new tank and drain field. Posture: If the system is failing, demand seller replacement before closing or credit for full replacement.
15. Visible mold in concealed or structural areas
Mold in bathrooms from steam is usually benign. Mold in the basement, attic, crawl space, behind appliances, or inside HVAC ducts is a different issue. It suggests ongoing moisture, compromised air quality, and potentially hidden structural damage.
Typical cost: $500 to $3,000 for small remediations. $10,000 to $30,000 for extensive mold throughout the home. Plus the cost of fixing whatever is causing the moisture. Posture: Hire a mold specialist ($300 to $600) before deciding. If mold is widespread, walk unless the seller is willing to do a full professional remediation with post-remediation clearance testing.
The negotiation playbook
Once you have the inspection report, you have a window (usually 5 to 10 business days) to decide. Three options:
- Price reduction. Seller credits an amount equal to estimated repair cost to your closing costs. Cleanest path. You control the repair and can shop for best pricing after closing.
- Seller repair before closing. Seller hires contractors to complete specific repairs. Risk: seller often chooses cheapest option and quality suffers.
- Repair escrow. Money is held from seller's proceeds in an escrow account, released when repairs are completed post-closing. Useful when repairs cannot reasonably be done before closing.
Package your requests. Submit one consolidated list of 3 to 8 items with estimated costs and your proposed remedy. Do not submit 40 line items including every dripping faucet. Sellers respond better to focused lists of real issues.
When to walk
Walk away when any of these are true:
- Total estimated repairs exceed 5 to 8 percent of purchase price and the seller will not credit accordingly.
- Multiple major systems need replacement (roof, HVAC, panel, plumbing) and the seller will not meaningfully negotiate.
- Foundation issues are active and ongoing (not just historical settling).
- Polybutylene plumbing, active knob-and-tube, or widespread mold and the seller refuses full remediation.
- You cannot obtain homeowner's insurance due to a finding (old panel, roof age, K&T, prior claims).
- You no longer trust the seller's disclosures after what the inspection revealed.
Walking is always an option. Your earnest money is protected under the inspection contingency in almost all standard purchase contracts, provided you notify in writing within the contingency window.
The bottom line
A home inspection is the only objective snapshot of the property's condition you will get. Use it to triage major issues, renegotiate on what is fixable, and walk away from what is not. For the full home-buying workflow, including how the inspection fits into the 5-phase process, see our Home Buyer Checklist. For condo and HOA-governed properties, pair the inspection with our HOA evaluation walkthrough. And if this is your first deep dive on home buying, start with pre-approval prep so you can act fast when the inspection demands a negotiation pivot.