The buyer had your home inspected and something serious came up.
Minor repairs are nothing to sweat over. When something serious comes up, it could jeopardize the success of the sale. Of course, this is not ideal and is probably very frustrating, but you have options. Failing an inspection does not mean the deal is dead.
Home inspectors don't grade your homes like a test in school, so there is no official pass-or-fail metric. But there are issues that, if discovered, could make the buyer reconsider. A home inspector’s report revealing expensive or serious issues like mold or a bad roof would prompt a buyer to demand repairs or a monetary credit to fix it themselves. When a compromise cannot be reached, the buyer can back out if it had included an inspection contingency in the sales agreement.
In short, “failing” means the findings raise concerns that could impact the sale.
Common reasons homes ‘fail’ inspections
Squeaky doors, a burned-out light bulb and loose railings are issues that are fairly inexpensive to fix. You could probably handle them yourself. These will not be the issues that cause a deal to fall apart.
“Buyers tend to focus on what they can actually see, which is why potential water damage is such a huge concern,” said Geremey Engle, owner and inspector at Ellingwood Pro Home Inspectors based in Winchester, Virginia. “They also tend to look at the appearance of the mechanical equipment, such as water heaters, HVAC systems and more. If it looks poorly maintained on the outside, they think the insides probably are, too.”
These issues can scare buyers because they often come with high repair costs and potential safety risks.
- Structural issues: Foundation cracks, roof damage or compromised framing.
- Safety hazards: Mold, water damage, outdated electrical systems.
- Major system failures: Heating and cooling breakdowns, plumbing leaks or sewer line problems.
- Pest infestations: Termites or rodents causing structural damage.
- Radon levels: Homes need systems to filter radon emitted from the ground. Colorless and odorless, radon left unfiltered can seep into a home, increasing the risk of lung damage.
What happens after a bad inspection?
If one of these major issues is discovered, it will be up to the buyer to decide how to proceed.
Repair requests
The buyer asks the seller to fix certain issues before closing. This is common, but sellers will also face the pressure of a deadline for closing. If you are asked to make repairs, don't skip comparing contractors.
“The best course of action is to be reasonable and act quickly,” Engle said. “Get comparable quotes from at least three different contractors to give you a ballpark figure in mind.”
When negotiating repairs, sellers should set priorities for what matters most for the sale.
“Only agree to fix safety issues, structural problems and systems that do not work,” said Andrew Fortune, a real estate agent with Great Colorado Homes in Colorado Springs, Colorado.
Requests to repaint or rip out old carpet are less important to the sale. General wear and tear is expected and not fixing these issues likely won't be a deal breaker.
Credits or price reduction
Taking on major projects in a short period of time can be tricky, so some sellers will get quotes for the repairs then offer to pay for them with credits or lower the sale price.
“Offer a credit at closing instead of doing the actual repairs yourself. This allows the buyer to hire their own trusted contractor,” Fortune said.
Deal cancellation
If problems are severe and negotiations fail, the buyer may walk away.
“Overall, sellers who prepare early, stay calm and focus on the bigger picture tend to keep buyers engaged and avoid unnecessary deal-breakers,” said June Lu, a mortgage loan officer at Churchill Mortgage based in Renton, Washington. “Though it is true that there is always another buyer, the longer the home remains unsold on the market the more it costs the seller, either through price reduction or more negotiation leverage for the buyers.”
Sell as is
In highly competitive markets, even after inspections uncover issues, buyers may be willing to move forward without help from the sellers because they want the home so much. This has become more common recently as housing stock dwindled in popular areas. Sometimes the inspection is just for the buyer to have information about the property, but it is not attached to a contingency of the sale.
“In a seller’s market, the dynamic is very different,” Lu said. “With strong competition and buyers worried about losing the home, many choose not to renegotiate unless the inspection reveals major issues — especially those that could affect financing, such as structural, health or safety concerns. Buyers may still ask for concessions, but sellers often have the leverage to decline.”
How to avoid failing an inspection
The goal is to not have major issues arise at the time of sale. Regularly doing maintenance on your home and keeping an eye out for issues is a smart way to prevent those major issues from taking root. Many experts also suggest getting a pre-listing inspection so you'll know what you are dealing with before buyers even make offers.
“By addressing issues ahead of time and providing full transparency, the transaction typically involves far less back-and-forth negotiation,” Lu said. “This approach saves time for both parties and helps minimize the risk of a buyer backing out due to unexpected inspection findings.”
Be sure to disclose prior issues such as water damage even if they've been addressed and repaired.
“In most cases, if you know about it, you should disclose it,” Engle said. “Especially when it comes to foundation repairs, past flooding or any insurance claims.”