Tag: First time homebuyer

As a first-time homebuyer, it can feel like there’s endless information about how to buy a home. You’ve probably heard advice about how much you need for a down payment, what credit score qualifies you for a mortgage, or whether it’s better to keep renting instead. It’s possible these home buying myths may be holding you back from becoming a homeowner.

In this Redfin article, we’ll debunk 11 common first-time homebuying myths so you can see what’s really standing between you and homeownership. Whether you’re looking at homes in Nashville, TN, or a condo in Chicago, IL, here’s the truth about buying your first home. 

Myth #1: You need a 20% down payment

You don’t need a 20% down payment to buy a home. It’s a common myth that might be preventing you from becoming a homeowner. Many loan programs allow you to buy with little or no money down. 

• FHA loans: As low as 3.5% down
• VA loans: 0% down
• USDA loans: 0% down
• Conventional loans: 3 – 5% down, depending on the lender

For conventional loans, keep in mind you’ll need to factor private mortgage insurance (PMI) into your budget. PMI is an additional cost your mortgage lender may require if your down payment is below 20% and the cost is factored into your monthly mortgage payment.

There are also down payment assistance programs that offer loans or grants that can reduce your down payment amount or closing costs. Down payment assistance programs are offered at local, state, and federal levels, so there are plenty of programs available. 

Myth #2: Renting is cheaper than buying a home

Renting isn’t always cheaper than buying a home; however, it depends on several factors. In some cities, the average rent may be equal to or more than a mortgage payment. Mortgage payments are stable over time, whereas your rent may increase each year. 

Additionally, if you plan to stay in a city for more than 5 years, buying a home can provide more stability and generate more equity in the long run. You can use a rent vs buy calculator to help estimate the difference in costs for your city.

Myth #3: You only need to save for a down payment

Even if you’re not putting down 20%, a down payment isn’t the only upfront cost to save for. You’ll need to account for additional expenses like closing costs, agent fees, inspections, and moving costs. 

• Closing costs: 2 – 5% of the purchase price
• Agent fees: 1.5 – 3% of the purchase price

For example, the median sale price for a single-family home in September 2025 was $435,495. In that scenario, the average closing costs could range from $8,709 to $21,774. Agent fees could range from $6,532 to $13,064.

Sometimes, the seller may cover a portion of the closing costs or the real estate agent’s fees, but that’s not guaranteed. Be sure to factor these additional costs into your budget.

>>Read: How Much Money Do I Need to Buy a House?

Myth #4: You need to pay off your student loans first

You don’t have to pay off student loans before buying a home, it all depends on your debt-to-income ratio (DTI). DTI is your monthly debt payments divided by your gross income. It shows lenders what percentage of your monthly income is paid towards your debts.

If your DTI is below 36%, you’re generally in a good position to buy a home even with student debt. Most lenders won’t approve a mortgage if your DTI is higher than 36%. So if you fall into that category, you may want to pay off your student loans first. 

Myth #5: Your credit score needs to be perfect

You don’t need an excellent credit score to buy a house. Having a higher credit score can help widen your loan options and possibly give you a lower interest rate and better loan terms. However, you don’t need a perfect credit score in order to buy your first home. 

Here are some of the credit score guidelines for certain loan types:

• Conventional loan: 620
• FHA loan: 580 (or 500 with 10% down payment)
• VA loan: No requirement, but some lenders prefer 620
• USDA loan: 620 – 640

If your score isn’t ideal yet, you can still work with a lender to find the best fit and create a plan to improve it over time.

Myth #6: You shouldn’t buy when interest rates are high

If now is the right time for you, a higher interest rate shouldn’t necessarily stop you from buying a home. Rates rise and fall, but home prices and inventory can change too.

If you find the right home and you’re financially ready, it can still make sense to buy now. If interest rates drop in the future, you can always consider refinancing your mortgage. 

Myth #7: All mortgage lenders offer the same rate

It’s a common misconception that every mortgage lender offers the same rates and terms. In reality, each lender uses different criteria to determine your rate, and even small variations can have a big impact over time. When shopping for a mortgage, it’s always a good idea to get quotes from several lenders. That way, you can find the one that’s best suited for your finances and homeownership goals. 

Myth #8: A pre-approval means your loan will be approved

A mortgage pre-approval shows sellers you’re a serious buyer, but it doesn’t guarantee your loan will be approved. Lenders can still deny an application if something changes – like your income, credit score, or the home’s appraised value.

Pre-approval is an important first step, but continue managing your finances carefully until you close on the home.

Myth #9: You don’t need an agent

Technically, you can buy a home without an agent. However, a great real estate agent can make the process smoother and help you avoid costly mistakes.

From helping you find the right home to making an offer that stands out, a great real estate agent is your advocate throughout the entire process. They also know the local market and can spot potential issues early on, which is especially helpful for first-time buyers.

Myth #10: Home inspections are optional

It’s important to get a home inspection, regardless of whether you’re buying the home with a loan or with cash. More often than not, your mortgage lender will require a home inspection before you buy the home. Even if your lender doesn’t require a home inspection, it doesn’t mean you should skip it. 

A licensed home inspector may uncover damage or issues with the house that you should be aware of before owning the property. If a home inspection does find significant damage, you may be able to negotiate with the seller to repair the issues, negotiate a lower asking price, or walk away if you have an inspection contingency.

Myth #11: The listing price is non-negotiable

The listing price is just a starting point. You can always negotiate an offer, whether it’s the home’s price or asking for seller concessions. In a competitive market, you may need to be prepared to spend more than the listing price, but your agent will know how to make your offer stand out. If it’s a slower market, you may be able to negotiate the price more easily. It’s important to keep in mind that the purchase price can rise or fall depending on market conditions, buyer interest in the home, and other factors.

Next steps for first-time home buyers

Don’t let home buying myths hold you back from buying your first home. If you still have questions about your finances or ability to buy a home, speak with a real estate agent, lender, or financial advisor who can help you start your home buying journey. You may find out you’re ready to buy a home sooner than you thought.

When you’re buying a home, the last thing you want in an inspection report is a potential structural or foundation problem. Some buyers may decide to walk away, but if you’re serious about the home, a structural inspection is the next step.

A structural engineer will look at the foundation, framing, and other load-bearing elements that keep a house safe and stable. Most of the time, the inspection can put buyers at ease and verify whether the issue is just normal settling or if further attention is needed.

Whether you’re buying in areas prone to foundation problems, like Philadelphia or Dallas, or in wetter climates like Seattle, understanding if and when you need a structural inspection is key to making a confident purchase.

What is a structural inspection?

While a standard home inspection looks at the interior and outside of a home for wear and tear or items of concern, a home inspector may only note if something seems off with the structure. A structural inspection by an engineer answers the harder questions: Why is it happening, and is it serious?

A structural engineer often has years of experience and understanding when it comes to the safe construction of homes and commercial properties. When they inspect a home, they’re looking to see how the house is holding up: the foundation, beams, joists, roof trusses, and load bearing walls. A licensed structural engineer’s inspection typically includes checking for:

• Cracks in the foundation
• Sloping floors or bowing walls
• Moisture damage that could affect the integrity of the house 
• Drainage, soil movement, and framing connections to assess stability

When you should get a structural inspection

Until a home inspector notes something concerning, many people don’t think about calling in an engineer for a structural inspection. Buyers are likely to hire a structural inspector if they want to know more about the bones of the home after the general inspection, and sellers or current homeowners might reach out for a structural inspection if they notice distinct signs of structural issues:

• Cracks in the foundation or walls: Small hairline cracks are normal as a home settles, but wide, horizontal, or stair-step cracks (especially along brick or concrete block walls) can point to foundation movement or pressure from the soil outside.
• Floors that slope or feel uneven: If you drop a marble and it rolls to one corner, it can signal issues with joists, beams, or subfloor framing that might be from long-term settling or wood rot.
• Doors and windows that stick or won’t latch properly: As the foundation moves, the frame of the house might subtly twist, and it can cause doors to jam or gaps to appear around windows.
• Bowing or bulging walls: Whether it’s a basement wall pushing inward or drywall upstairs rippling outward, that curve can mean the wall is taking on more load or moisture pressure than it should.
• Sagging ceilings or rooflines: A dip in the ceiling or a wavy roof ridge can hint at overloaded beams, truss damage, or weakened supports from leaks or age.
• Persistent moisture or water intrusion: Damp basements, musty crawl spaces, or standing water near the foundation can erode soil, compromise footings, and lead to structural instability over time.
• Rot, rust, or termite damage: Decay and pests feed off the materials that hold your home together, eating away at beams and supports. Small rot holes could actually be a much bigger problem inside the wood.
• After natural events: Earthquakes, floods, big storms, frost and thaw cycles, or even renovations that add more weight to the home can cause structural shifts that should be evaluated by a professional if something seems off.

For buyers, structural inspections can make or break a home sale. An “all clear” brings peace of mind, while any concerning findings give buyers leverage to negotiate repairs with the seller or decide to walk away from the house.

How much does a structural inspection cost?

The cost of a structural inspection can vary widely depending on your local market, what the inspector is looking at, and if they are giving a professional opinion of an issue or writing and stamping a report. The cost of a residential structural inspection is often a flat fee ranging between $350 – $1500; but the average price homebuyers will pay for a structural inspection is about $550.

Usually, the cost of a structural inspection includes a professional opinion on a structural red flag that was noted on the home inspection report. A stamped and signed report isn’t usually required unless they find something seriously wrong or the inspection is renovation-focused. Then, the cost will likely go up for the extra time, paperwork, and liability for the engineer.

While many buyers might baulk at the price of hiring a structural engineer, structural issues in the home can be tens of thousands of dollars to fix—and it’s better to know before signing the final papers.

Common structural problems and what to do about them

The most common problems structural engineers find are foundation cracks, water damage, and rotted beams or sagging floors—but what do those issues actually mean when it comes to repairs?

Foundation cracks

Hairline cracks from natural settling are usually fine, but wide or horizontal ones may mean shifting soil or water pressure pushing against the foundation. A structural engineer can tell the difference, and if needed, recommend foundation repair methods like epoxy injection or underpinning.

Water damage 

Persistent moisture weakens concrete, rusts metal supports, and causes wood framing to rot. Fixing the source, whether that’s poor drainage, leaky gutters, or groundwater seepage, is key before repairing the structure itself.

Rotted beams or sagging floors 

These can be symptoms of long-term moisture exposure or overloading. Depending on the damage, repairs might involve sistering new joists to old ones, reinforcing beams with steel plates, or replacing damaged lumber altogether.

Structural inspections: bottom line

Structural issues don’t automatically make a deal fall through, but they can change the conversation between a buyer and seller. Even minor structural problems can affect the perceived value of a house since buyers often fear the worst for the bones of their future home.

That’s why a residential structural inspection by a licensed professional is crucial if any frame or foundation issues are suspected. At best, the inspection can put any worries at ease; and worst case, the report can be a strong negotiation tool or a reason to walk away and find a different home, saving you thousands of dollars in future repairs.

When buying, selling, or refinancing a home, an appraisal is almost always a required step in the process. An appraisal verifies the home’s fair market value so the lender can approve the right loan amount. Usually, the buyer pays for the home appraisal, but it can also depend on the situation — no matter if you’re buying a home in Charlotte, NC or Salt Lake City, UT.

Who pays for the appraisal fee?

In almost all financed home purchases, the buyer is responsible for paying for the home appraisal, even though the lender orders it to confirm that the property’s value is equal to or greater than the loan amount.

You’ll usually pay for the appraisal after you lock-in your rate but before closing. Sometimes, the fee or a credit for the fee is collected at closing, but most lenders require payment in advance before the appraisal can take place.

Average appraisal cost: $400–$900

Who orders it: Your lender

Purpose: To confirm the home’s value for the mortgage approval

Because appraisals happen early in the lending process, the fee is typically nonrefundable once the report is complete, even if your loan is denied, the deal doesn’t go through, or you switch lenders.

Why don’t sellers pay for the home appraisal before listing?

While it might seem like an appraisal would help sellers set an accurate listing price, they’re often considered an unnecessary expense for sellers—an appraisal is mostly a tool for lenders. A lender requires an appraisal to verify the home’s value for a loan, but sellers will use a real estate agent’s comparative market analysis (CMA) to set their listing price.

A CMA, referred to as comps, gives a free, data-driven estimate of a home’s market value based on similar recent sales, current listings, and local trends. It’s fast, flexible, and tailored to pricing strategy, while an appraisal is a more rigid, loan-based valuation—but both can be affected by the rapidly changing housing market.

That said, some sellers choose to order a pre-listing appraisal if:

For most sellers though, a professional appraisal before listing is an unneeded cost, especially since the buyer’s lender will require a new appraisal anyway once an offer is accepted.

Who decides the appraisal fee?

Buyers don’t actually choose their appraiser or shop around for a price. Most lenders work with an Appraisal Management Company (AMC), which functions as a middleman between lenders and licensed appraisers.

The AMC assigns a local appraiser to evaluate your property and sets the appraisal cost based on the home size and location, the type of property, and how complex or unique the process is.

These fees are standardized within each lender’s network to keep the process fair and compliant with federal lending laws. This setup helps prevent any potential conflict of interest between lenders and appraisers (for example, lenders can’t pressure appraisers to say the home is worth a certain value).

Because of this system, appraisal fees can vary slightly from lender to lender, but they’re not negotiable with the appraiser themselves. The appraiser will send the invoice to the lender who then passes it directly on to the buyer.

What happens to the appraisal fee if the deal falls through?

Basically, the appraisal is a nonrefundable step in the due diligence process, similar to a home inspection fee.

If the sale doesn’t close—whether due to financing issues, inspection results, or a change of plans—the buyer still pays for the appraisal if it’s already been done. Once the appraiser has looked at the home and issued a report, the service is complete, and the cost remains your responsibility.

Can you transfer an appraisal to another lender?

Buyers might switch lenders mid-transaction if they found a better rate elsewhere or were denied the loan. Sometimes it’s possible to transfer the appraisal over, but if a new appraisal is required by the new lender, the buyer pays again. The loan type and individual lender policies are what will determine if a completed appraisal will transfer.

• Conventional loans: Transfers may be allowed if the new lender accepts the same appraiser and management company (like if buying a house within the same area).
• FHA, VA, or USDA loans: These are usually assigned to the property and can be reused within a set time frame.

When the seller might pay for the home appraisal

Buyers almost always pay for the home appraisal, including if the first one expires or there’s a change in lenders. But if the appraisal comes in low and the buyer has an appraisal contingency, then the cost of a second appraisal will likely fall to the seller disputing the report. 

Sometimes the seller might agree to pay the appraisal fee in other special circumstances:

• Seller concessions: To attract buyers or close the sale, a seller might offer to pay part or all of the appraisal fee as a seller’s credit.
• Low appraisal negotiations: If the appraisal comes in lower than the purchase price, a seller may chip in for a second appraisal or towards the gap in appraised value and offer price to keep the home purchase on track.
• New construction homes: Sometimes builders include appraisal fees as part of a closing incentive or as a negotiation tactic.

Do you have to pay for the appraisal fee upfront?

Most of the time, yes—the buyer pays for the home appraisal before closing, at the time it is ordered to avoid any delays in payment or processing. However, the fee will be listed as part of the closing costs, with a credit saying already paid. If covering the appraisal fee is included in negotiations, the appraisal will still need to be paid for upfront with a credit offered at closing.

For refinancing, the homeowner pays the appraisal fee

When you refinance your mortgage, your lender will ask for a new appraisal to get an idea of your home’s current value. This helps your lender know that your property still supports the loan amount you’re applying for, especially if values in your area have changed or you’ve made upgrades to the home.

A refinancing appraisal shows how much equity you have and helps the lender calculate your loan-to-value ratio, which influences your refinance terms and interest rate. Just like with purchase appraisals, you’ll pay the fee upfront, and it’s nonrefundable once the appraisal is done.

Bottom line

Most of the time, the buyer or homeowner pays for the home appraisal, even though it protects the lender. It is a typical borrower expense and part of the cost of securing a mortgage. You might be able to negotiate for the seller to cover the appraisal fee, but it’s best to budget for it upfront — and remember, once the appraisal is completed, it’s nonrefundable.

Tip: Want a head start before paying for an appraisal? Check your home’s value with Redfin’s Home Value Estimator to see how it compares to similar homes in the area.

FAQs: Who pays for the home appraisal

What happens if I don’t pay the appraisal fee?
If you don’t pay the appraisal fee, your loan process can’t move forward. Lenders require an appraisal before approving or funding a mortgage, and most won’t schedule it until the fee is paid. By failing to pay for the home appraisal, you could delay your closing or even cause your loan application to be canceled.

Why do you have to pay for a home appraisal upfront?
Buyers pay for a home appraisal upfront because the lender needs the report early in the loan process to move things forward on time. The fee covers the appraiser’s work and can’t be rolled into your loan balance since the appraiser is an independent third party. Paying before the appraisal means the report can be completed on schedule, the loan amount can be verified, and the appraiser is compensated even if your loan doesn’t close.

Do I still pay for the appraisal if my loan is denied or I don’t buy the house?
Yes. The appraisal fee must be paid if the service was completed, even if your loan isn’t approved or the deal falls through.

Who pays for a second appraisal?
The buyer is usually responsible for appraisal costs, unless the seller wants to order another one to challenge a low valuation.

Who decides the appraisal fee?
The appraisal management company sets the cost based on property type, market conditions, and turn-around time.

How can I get a house appraised for free?
You can’t get a formal home appraisal for free, and a licensed appraisal is required for lending purposes. But you can use free tools like the Redfin Home Value Estimator or request a comparative market analysis from a real estate agent to get an idea of what a home is worth. If you’re refinancing, sometimes less expensive appraisal options are available, like desktop or drive-by appraisals.

Key takeaways

• Renting vs buying depends on your finances, long-term goals, and lifestyle.
• Buying a home helps build equity, has tax benefits, and gives you pride of ownership.
• Renting gives you flexibility to move, stable monthly payments, and no repair costs. 

Making the leap from renting to buying is a big decision that depends on factors like your long-term goals, finances, and lifestyle. Whether you’re moving to a new city or your lease is coming to an end, you may be wondering if you should rent or buy a house.

In this Redfin article, we’ve partnered with Kinda Frugal, a veteran-owned personal finance and lifestyle brand, to help weigh the pros and cons. If you’re moving to San Diego, CA, or looking at homes for sale in Richmond, VA, here’s what to consider when renting vs buying a home this year.

Renting vs. buying: pros and cons

As you decide whether you should rent or buy a house, consider the pros and cons of each.

Andreas Jones, from Kinda Frugal, says the biggest difference comes down to flexibility and control. “Renting gives you flexibility; you can move without the headache of selling, and if something breaks, you just call the landlord,” he explains. 

“Plus, you’re not dropping tens of thousands upfront. The downside? Your rent money disappears every month instead of building equity. And your landlord can raise rent or decide to sell whenever they want.”

5 pros of renting a house

1. Home repairs: If something breaks in a home you’re renting, it’s typically the landlord’s responsibility to fix it. So when the air conditioning unit stops working in the middle of summer, you don’t have to spend thousands of dollars to fix it.

2. Monthly housing expenses: For the most part, when renting a house or apartment, your monthly housing costs will stay the same, aside from minor fluctuations in utility costs. Your base rent doesn’t change month to month after you’ve signed a lease, and you likely won’t need to budget for any emergency repairs, maintenance costs, or property taxes.

3. Flexibility: You can move out when your lease is finished or relocate to another city without having to worry about selling your home. Renting a house also allows you to see which home styles you like, which floor plans you don’t like, and if a neighborhood is the right fit, before buying a home.

4. Investment opportunities: Renting can free up some of your income, since you won’t be spending it on repairs or upgrades. You may have extra funds, also called disposable income, to invest in building your finances or saving for a down payment.

5. Time to improve credit: Renting also gives you the opportunity to pay off debts and help improve your credit score. A better credit score can give you better loan terms, so doing this can help you in the long run.

5 cons of renting a house

1. Temporary: As Andreas points out, “the biggest pro of renting is also the biggest con.” If you’re planning to live in a city for years to come, renting may not be the best option. Most leases last for only a year.

2. Uncertainty: There’s no telling when the property’s owner may decide they don’t want the responsibility of being a landlord anymore. They may decide to sell the property, which means you’ll need to relocate. Similarly, when your lease is up, your rental may not offer you the option to renew your lease.

3. Possible rent increases: As a renter, it’s possible that your rent will increase every time you renew your lease. Depending on whether you negotiate rent, the new cost may be out of your budget. In that case, you’ll likely need to find a new rental.

4. No home equity: As a renter, you don’t build any equity. Home equity is the percentage of the home’s value you’ve paid for, rather than what your lender still owns. When you pay your rent each month, you’re helping someone else build equity.

5. As-is home: You usually don’t have the option of modifying a rental to suit your needs. Some landlords may allow you to make small changes like painting the walls in your living space, but you’ll probably have to paint them back to the original color when you move out.

5 pros of buying a house

1. Building equity: When it comes to homeownership, Andreas says, “buying means you’re building equity with every payment, and it’s yours to paint, renovate, whatever you want.” You have the opportunity to potentially increase your home’s value over time. More equity can mean greater profits when selling and the ability to borrow for major expenses.

2. Customizable: Buying a home means it’s yours. You can paint it, remodel it, and customize the space to your liking without having to follow a landlord’s rules.

3. Stability: You won’t have to worry about a landlord who may decide to sell the home once your lease is up. You have the freedom to decide how long you want to stay in the home, and ultimately, if or when you want to sell.

4. Mortgage payments: When you own a home, you’ll have stable mortgage payments each month, as long as you have a fixed-interest mortgage. This stays consistent over time, and you won’t have to worry about a landlord raising your rent each year.

5. Tax benefits: There are several tax benefits of owning a home. Some homeowners qualify for tax breaks, which are reductions in federal or state taxes. Many first-time buyers can receive tax deductions, such as on their mortgage interest, which can save money at tax time.

5 cons of buying a house

1. Closing costs: Buying a home comes with closing costs, like inspections, title insurance, lender fees, and other costs, typically 2%–5% of the home’s purchase price. There are downpayment assistance programs that may help you cover these costs.

2. Home value: Ideally, your home’s value will increase between the time you buy and the time you sell, but it doesn’t always. Events outside of your control, such as a change in the economy, can potentially reduce your home’s value.

3. Home maintenance expenses: With owning a home comes the responsibility of home maintenance. If there’s a leak in the roof, it’s up to you to deal with and pay for repairs. You’ll also need to be prepared for emergency repairs, such as a burst pipe or broken heater.

4. Investment limitations: Buying a home ties up most of your money in one asset, leaving fewer funds for other investments. However, some home improvements can add value and pay off when you sell.

5. Property taxes: As a homeowner, another important cost to factor in is property taxes, which can be substantial depending on where you live. If you’re renting an apartment, you won’t pay property taxes (however, they may be factored into your rent).

Should I rent or buy a house? 4 questions to ask yourself

Everyone has a unique lifestyle, financial situation, and set of long-term goals that impact their decision whether to rent or buy a house. Consider the following four questions to help you decide:

1. Does renting or buying work with your timeline? If you’re not sure how long you’ll stay in one place, renting may make more sense. Andreas shares a practical guideline: “If you’re planning to stay somewhere for at least five years, buying usually makes sense financially. You’ll have time to recoup those hefty closing costs. 

However, if there’s a decent chance you’ll move in the next few years, renting is probably smarter (selling a house quickly can actually lose you money).”

2. Where do you see yourself in 5 years? Do you want to move to a new city or state? Or are you looking to stay in your city for the foreseeable future? Answering these questions can help you determine whether to stay renting or consider buying. “If you’re in a settle-down phase, buying works,” Andreas says. “If everything still feels up in the air, don’t lock yourself in.”

3. How much can you afford? The costs of renting and buying vary, and your budget plays a big role in deciding which is right for you. “Don’t just compare mortgage to rent,” Andreas advises. “Factor in property taxes, insurance, and repairs as they add up fast. You’ll want 20% down plus a solid emergency fund, because homeownership throws curveballs.”

• Buying a home requires upfront costs like a down payment and closing costs, which depend on your loan, lender, and housing market. You’ll need to budget for mortgage payments, maintenance, utilities, and homeowners’ insurance.
• Renting typically has lower upfront costs, like an application fee, security deposit, and first and last month’s rent. You’ll need to budget for rent payments, utilities, and renters’ insurance.

4. Will renting or buying a home fit your lifestyle? Beyond finances, renting vs. buying is also a lifestyle choice. “Do you dream of renovating a kitchen, or does staying flexible sound better?” Andreas asks. “Can you handle surprise $5,000 repair bills? There’s no wrong answer; it depends on your priorities.”

• Buying a home is a long-term commitment that allows you to build wealth over time. You can customize your space, whether that’s remodeling, painting, or making upgrades. If you want stability and to put down roots, homeownership may be the right move.
• Renting offers flexibility and fewer responsibilities. You don’t have to worry about maintenance or unexpected repair costs. It can be beneficial if you move frequently or have a busy lifestyle.

Is it better to rent or buy a house?

Whether you make the decision to rent or buy a house, it’s a personal decision and one that means taking a look at different aspects of your life. From your finances to lifestyle, job situation, and long-term goals, many factors influence whether you should rent or buy a house. If you’re still unsure, calculate the cost of both options and speak with a mortgage lender or real estate agent who can help you understand what’s realistic for your budget and goals.

You would think once your homeowners policy is active, the hard part’s over. But more and more homeowners are finding that’s not the case, whether they’re buying a condo in Miami, FL or a starter home in Detroit, MI. Many insurers are ordering inspections, or even driving by homes, and requiring repairs before they’ll continue or renew coverage.

These days, you might be able to get homeowners insurance without an inspection — at first. But the reality is, most insurance companies require some form of inspection when applying for a policy or even renewing an existing one. Whether that’s done through drone imagery, a drive-by inspection, a 4-point inspection, or even a virtual visit, most policies have an inspection requirement — even if you don’t always see it coming. 

Why do insurers usually require a home inspection?

When you apply for homeowners insurance, you’re protecting your home—but your insurer is taking on the financial risk of anything that could go wrong.To manage that risk, a lot of insurance providers require an inspection before finalizing your policy, during the policy period, or if your policy is up for renewal. 

Sometimes the insurance company will ask for a copy of your home inspection report to assess risk. Other times, they will conduct their own 4-point inspection, which focuses on your roof, electrical, plumbing, and HVAC.  The goal is to understand the age of the home, overall condition, any potential hazards, and how any issues might impact your eligibility for insurance or your premiums.

Assessing risk based on age and condition

A new construction home carries very different risks than one that’s 70 years old. Inspections help insurers understand the overall condition of your property and whether it’s been well-maintained, needs updates, or has issues that could become a claim sooner rather than later.

Identifying potential safety hazards

Homeowners insurance companies are also looking for red flags that might increase the likelihood of damage or accidents. Common high-risk areas are the roof (for leaks or storm damage), electrical systems (fire hazards), plumbing (water damage risk), and the foundation (structural stability).

Determining insurance eligibility and premiums

What the inspector finds directly impacts how much you pay for your insurance, or if you even qualify for coverage at all. Recent upgrades and a home that’s been well-maintained could equate to a lower premium. Finding repairs like outdated wiring, a worn-out roof, or even missing handrails might raise your rates or mean coverage is denied or delayed until the issues are fixed.

When insurance companies don’t require an inspection

More and more insurers are tightening their rules and requiring inspections before issuing or renewing policies. Still, there are some situations where you might be able to get coverage without someone coming out to look at your property.

The home is new or recently renovated 

Older homes come with more risks like aging plumbing, outdated wiring, worn roofs that insurers want to check before offering coverage. But if a home is newly built or has just gone through major upgrades, insurers already know those systems are less likely to fail. For example, a new construction home in a suburban neighborhood with modern safety features is less likely to have a surprise claim than a fixer-upper from the 1960s. In those cases, some insurers are comfortable issuing a policy without an inspection.

The home is lower in value

Insurance is about risk and replacement cost. If your home would be less expensive to rebuild, the financial risk to the insurer is smaller. That sometimes means they’ll ease up on inspection requirements. A 1,200-square-foot bungalow in the midwest may not get the same scrutiny as a large historic home in Boston with custom finishes, simply because the potential payout is lower.

The property is low risk

Where a home is located can be just as important as its age or condition. A modest house in a safe neighborhood with low exposure to natural disasters or theft may not raise the same level of concern for insurers. On the other hand, that same house in a wildfire zone or within an intercity zipcode would likely provoke an inspection. The lower the overall risk, the more likely it is that an inspection might be skipped.

There has been a recent inspection

If the home has already been inspected within the last year or two, insurers sometimes accept that documentation instead of requiring a new inspection. For example, if you just bought the home and had it professionally inspected during the sale, an insurer may consider that report “good enough” to proceed. But if big issues were found on the inspection report, they would likely still need to be fixed before getting approved for coverage.

Using digital, remote, or delayed inspections

Instead of sending someone in person, insurers might rely on satellite imagery, tax records, or photos you upload yourself. Some even issue coverage right away and schedule an inspection within 30–90 days to confirm your details. This is convenient if you need proof of insurance quickly, like to close on a mortgage, but it also means the company can change your rate, require repairs, or even cancel coverage if issues show up later.

What to expect from a home insurance inspection

When an insurance company inspects your home, the goal is simple: to identify risks that could lead to future claims. Depending on the insurer and your property, the inspection might be quick and simple or more detailed. Drive-by inspections and 4-point inspections are the most frequently used methods insurers use to determine coverage.

• Drive-by inspection: An exterior review where the inspector checks the roof, siding, and overall upkeep from the street. They’re looking for signs of neglect, like missing shingles, peeling paint, or overgrown trees that could be risky. You may not even know it happened until you get a notice in the mail.
• 4-point inspection: Focuses on four major systems: the roof, plumbing, electrical, and HVAC. These inspections are especially common for homes that are around 20-30 years or older. Inspectors want to know if the home’s systems are safe, in working order, and that liability is limited.
• Full interior and exterior inspection: The most thorough option, covering everything from the foundation to the attic. Inspectors check for structural issues, water damage, safety features like smoke detectors, and exterior condition. This gives insurers the clearest picture of your home but can reveal issues to fix before coverage is finalized.
• Virtual or photo inspections: With the rise of online-first insurers, virtual inspections are becoming more common. Homeowners upload a series of photos or do a live video walk-through with a representative, instead of having an inspector come out to the home. These inspections are convenient and quick, but the insurer may still follow up with an in-person visit if something seems unclear or in need of a more thorough inspection.

What home insurance companies are looking for:

• Condition of the roof: the age, any leaks, storm damage
• Electrical safety: outdated wiring, old or faulty panels
• Plumbing risks: leaks, outdated pipes, water damage
• Foundation and structural soundness: cracks in the foundation, rot, decay
• Fire risks or visible hazards: wood stoves, missing safety equipment, proper ventilation, etc

How to get homeowners insurance without an inspection

Most insurers want to inspect your home before or soon after issuing a policy, but there are ways to improve your chances of getting coverage without a full in-person review. 

Be upfront with basic home details

Before you start insurance shopping, pull together the essential information: home age, square footage, construction type, and any upgrades or renovations. Being able to point out things like a new roof, updated wiring, or a modern HVAC system helps show insurers your home is a safer bet.

Shop online or call insurers offering instant coverage

Many online-first insurers and some traditional carriers offer “instant coverage” or “same-day policies” relying on public records, satellite images, and your application details instead of a home visit. Checking online platforms and calling insurers directly can uncover options that aren’t always obvious, but you might pay a premium or have more limited coverage.

Ask about conditional coverage policies

It’s not always possible to skip the inspection, so ask whether the company offers conditional or provisional coverage. These policies work by starting coverage right away, but allow the insurer to schedule an inspection within the first 30 to 90 days. For example, you might close on a house and get coverage immediately to satisfy your lender, but the insurer will still schedule an inspection after you have moved in. Use that window to prepare your home and avoid surprises that could affect your rates or coverage.

Tips for passing an insurance inspection

Insurers want to know that the home is safe, maintained, and ready for the long haul. The more proactive you are, the fewer surprises you’ll face when your policy is finalized. A little prep work could even help you lock-in a better rate.

• Tidy up the exterior: Clear away debris, trim overgrown trees or bushes, and make sure gutters are clean. Inspectors often notice signs of neglect first, and first impressions are important.
• Check the roof and gutters: Replace missing shingles, fix leaks, and make sure gutters are properly attached and draining. A roof in good condition is one of the biggest factors in passing an inspection.
• Update safety features: Test smoke detectors, install carbon monoxide alarms, and replace expired fire extinguishers. Missing or broken safety devices are easy fails.
• Review electrical and plumbing systems: Take care of obvious issues like leaky pipes or outdated wiring. If you’ve had recent upgrades, keep documentation handy to show the inspector.
• Take care of small repairs: Patch cracks, secure loose railings, replace broken steps, and address any visible water damage before the inspection. Problems that look small can actually be a sign of bigger issues.
• Document recent upgrades: Save receipts or permits for major improvements like a new HVAC system, roof, or electrical updates. This evidence can support your case for lower premiums.

FAQs: Home insurance inspections

What happens if your home is uninsurable?
If an insurer decides your home is too risky to cover, you may have to make repairs before reapplying. In some cases, you can turn to state-run FAIR Plans or surplus-line insurers, which provide coverage when standard companies won’t. The trade-off is usually higher premiums and fewer coverage options.

Can I refuse a home insurance inspection?
You can say no to a home insurance inspection, but most insurers will cancel or deny coverage if you won’t allow an inspection. Since inspections are how insurers confirm the home’s condition and risk level, declining the process leaves them with too many unknowns. If you’re worried or don’t want the hassle, you can ask about alternatives like providing recent photos, repair receipts, or a past inspection report.

Is it normal for home insurance to take pictures of your house?
Yes. Inspectors will take photos during a drive-by or walk-through to document the home’s conditions. Sometimes insurers also use satellite images or aerial photography to aid in their inspection. The goal is to confirm that the property matches what’s listed in your application and to identify any risks that could lead to claims later on.

What is considered high-risk for home insurance?
“High-risk” can mean different things, but it usually includes older homes with outdated or damaged systems, properties in disaster-prone regions (like wildfire, hurricane, or flood zones), or houses with a history of frequent claims. Even cosmetic issues like missing shingles, peeling paint, or overgrown landscaping can flag a property as higher risk because they can suggest deferred maintenance.

Will an inspection raise my premiums?
An inspection can raise your premiums, but it can also lower them. If the inspector finds problems like a worn-out roof, old wiring, or signs of water damage, the insurer may adjust your rate upward or require repairs. On the other hand, if the inspection confirms your home is well maintained with modern upgrades, you could actually qualify for a discount. The inspection’s goal is to make sure your premium matches your home’s real level of risk.

Buying a home comes with its fair share of stress, but building one adds a whole new layer of moving parts. Whether you’re building your dream home in Boise, ID, or watching a new construction rise in Atlanta, GA, one thing stays the same: you want confidence that it’s being built right.

When building a home, you’ll still want to get your new home inspected—not just before move-in, but at many different stages in the construction process. That’s where phase inspections come in.

What are phase inspections? 

A phase inspection is specifically for new construction homes, when an inspector goes through the house at specific stages during the building process. Also known as a 3-phase inspection, this inspection process is used when building a home to catch problems early and while they can still be addressed. 

Each inspection phase ensures that what is being built meets building codes, follows approved plans, and avoids mistakes that could get hidden as construction moves forward. Even brand-new homes can have issues with the framing, electrical, plumbing, or drainage that are harder to catch once drywall and flooring go in. 

What are the phases in a new construction phase inspection?

Phase inspections are broken down into 3-4 phases, depending on if you’re buying a custom-built or production build home. 

Phase 1: Pre-pour/pre-foundation
Before pouring the foundation slab, an inspector will look at the site prep, footing trenches, rebar, pipe sleeves, drainage, and plumbing stub-outs. This phase is meant to make sure the foundation is built correctly before the concrete hides any defects.

Phase 2: Framing/pre-drywall
After framing and mechanicals, but before insulation and drywall, you’ll want to get another inspection. This time, the inspector is checking the framing, structural connections, plumbing and electrical rough-in, HVAC ductwork, roof structure, fire blocking, and flashing. Ever wish you could open the walls of your home and see what could be wrong? Now is the time to get the behind-the-wall parts of the home inspected.

Phase 3: Final/pre-closing
When the home has mostly been completed, but before move-in, an inspector will do a full-system check, similar to a regular home inspection. They’ll be checking what is visible and operable, like the plumbing, electrical, HVAC, appliances, site grading, and exterior components, while also making sure everything is up to code. This inspection is separate to the blue-tape walkthrough you’ll do with the builder to check finishes and the final build.

Phase 4: 11-month warranty
This optional but valuable one-year warranty inspection takes place near the end of your builder’s warranty period. By this point, you’ve lived in the home long enough to notice small issues that might come up as the house settles. A licensed home inspector will perform a full review, similar to a standard home inspection. If they uncover any problems related to the original build, you’ll still have time to request repairs under the builder’s warranty before it expires.

How much does a phase inspection cost?

New construction phase inspections vary in price depending on the location, size of the home, and the number of inspection phases you schedule. On average, you can expect to pay between $100-$500 per phase, or around $800-$2000 for a full three or four phase package that covers your build from start to finish.

When to schedule each inspection

It’s a good idea to book your inspector early (ideally before construction starts) and share your builder’s timeline so they can pencil in tentative inspection dates. Inspectors often get busy during peak building seasons, and missing your inspection window can mean important areas get missed (like foundation footings or the systems behind the walls).

• Pre-pour inspection: Schedule before the foundation concrete is poured (usually a one or two day window).
• Pre-drywall inspection: After framing, plumbing, electrical, and HVAC rough-ins are complete, but before the insulation and drywall go in.
• Final inspection: Schedule when the home is nearly finished, before your final walkthrough or closing.
• One-year warranty inspection: Get the inspection between 10-11 months after the build has been completed, before the builder’s warranty expires.

What inspectors look for during each phase

A good phase inspector knows that every stage of construction reveals different potential issues. Their job is to make sure each part of your new home is built correctly, before it’s covered up or becomes expensive (or impossible) to fix later. 

Pre-pour foundation phase

Before concrete is poured, the inspector looks at the groundwork that supports your entire home. The aim of this inspection phase is to help prevent long-term problems like foundation cracks or drainage issues.

They’ll look for:

• Proper footing depth and width
• Correct placement of rebar and post-tension cables
• Plumbing and electrical conduit set and secured in the right locations
• Adequate grading and drainage to prevent water pooling under the slab
• Signs of poor soil compaction or improper vapor barriers

Pre-drywall framing phase

Once the framing, roofing, and systems are in place, but before the walls are sealed, inspectors will look at everything that lives within the frame of the house that can be expensive and complicated to fix later.

They’ll check for:

• Framing quality: Straight, level, and properly braced walls and beams
• Structural connectors: Missing or misaligned hurricane ties, joist hangers, or fasteners
• Plumbing and electrical rough-ins: Proper placement, labeling, and support
• HVAC ducts: Correct sizing, sealing, and routing
• Fire blocking and insulation prep: Ensures code compliance and energy efficiency

Final completion phase

As construction wraps up, inspectors will do a full walkthrough of the finished home, similar to a standard home inspection to confirm the house is move-in ready and everything works as it should. 

Inspectors will look over:

• Major systems: HVAC, plumbing, electrical, and appliances
• Roofing and exterior elements: Gutters, flashing, siding, and grading
• Interior finishes: Doors, windows, flooring, cabinetry, and paint
• Functionality checks: Outlets, switches, water flow, heating and cooling performance
• Safety items: GFCI outlets, handrails, smoke detectors, and ventilation

One-year warranty phase

Before your home hits the 12-month warranty expiration, it’s a good idea to have an inspector return to evaluate how your home has settled. If they spot any defects linked to the original build, you’ll still have time to request warranty repairs before coverage ends.

They’ll look for:

• Cracking or shifting in walls, ceilings, or foundations
• Leaks or drainage issues that developed after seasonal weather changes
• Mechanical wear in HVAC or plumbing components

How to use phase inspections during construction

Once each phase is complete, you’ll receive a detailed report with photos, notes, and recommendations for any issues found at each step. 

1. Coordinate with your builder early

If you’re working with a builder or general contractor, share your inspection plans upfront, ideally before construction starts. Most builders are accustomed to third-party inspections and will schedule work around them. Confirm that your builder will pause work, if needed, to address any problems that were identified during inspection before proceeding to the next construction phase.

2. Include inspection contingencies in your contract

When you’re under contract for a new construction home, consider adding inspection contingencies that allow you to review findings and request repairs before closing.

• For custom built homes, include a clause that lets your inspector access the site during the key construction milestones mentioned earlier.
• For builder developments or spec homes, your contract may specify when new construction inspections are allowed; review this carefully with your agent before signing.

3. Use inspection findings to request repairs or holdbacks

Once your inspector delivers the report, it’s important to communicate the findings with the builder. Some processes are similar to when requesting repairs from a seller in a regular real estate transaction, but in the case of a custom home, you have the right to address everything on the report—ideally in a collaborative manner. In some cases, you can also use the findings to negotiate a holdback, setting funds aside in escrow until the builder completes specific repairs.

• Start with the facts: Reference specific items in the inspection report and share photos or page numbers, so there’s no confusion about what needs attention.
• Keep everything in writing: Follow up verbal conversations with a quick email recap. This creates a paper trail of what was discussed, agreed on, and when fixes are expected.
• Prioritize major issues: Focus first on safety, structural, or code-related concerns. Builders are more likely to act quickly on items that clearly affect performance or compliance.
• Ask for realistic timelines: Most builders will need time to coordinate subcontractors for repairs. Confirm when each issue will be addressed and how it may affect your build schedule.
• Stay professional: Avoid emotional language or placing blame. Approach your builder as a partner on a project with the goal being you both want the home finished correctly.
• Request confirmation: Once repairs are complete, ask for photos or documentation showing the fix, or schedule a short site walk to verify it in person.

New doesn’t mean perfect

Just because a home is new, it doesn’t mean it’s perfect. Mistakes happen all the time, and the best way to protect your future home is to use phased inspections to check in at crucial points during the build process. The cost of getting your home inspected at each phase is minimal compared to the amount of protection it offers. Plan inspections ahead of time with your builder and inspector, and then rest easy knowing that your home has been thoroughly looked over—from the foundation to the finishes.

FAQs about phase inspections

Do phase inspections replace the municipal building inspections?
No. Municipal inspections are required by your city or county to ensure the home meets local building codes. A phase inspection is an independent, third-party check that goes beyond minimum code requirements to verify quality and workmanship. It’s an extra layer of protection.

Can a builder refuse a phase inspection?
Most reputable builders won’t (and shouldn’t) refuse a phase inspection. But it’s best to discuss your plans before construction begins and include inspection access in your contract. Some builders may require advance notice or request that inspections occur at specific stages to avoid delays in construction.

Are phase inspections mandatory or optional?
Phase inspections are optional but highly recommended for new construction homes. While municipal inspectors check for code compliance, a private inspector works solely for the buyer, identifying issues that could affect quality, safety, or long-term performance.

“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 indicate trouble 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.

You can’t change your mind on a home after closing, but you can rethink the deal after the inspection. When a report turns up more than you planned for, it’s normal to wonder if this is still the right house at the right price.

But when to walk away after a home inspection can be personal. We’ll help you weigh the risks of repairs, factor in your budget and timeline, and ultimately, decide when it’s best to trust your gut — whether you’re buying a home in Madison, WI or Sacramento, CA.

First, protect yourself with a home inspection contingency

A home inspection contingency is the safety net for homebuyers. It says, in writing, that you can inspect the property within a set window and either renegotiate repairs/credits or cancel and recover your earnest money if you want to walk away after the home inspection. 

In a lot of markets, buyers have between 5-10 days to get the home inspected and get back to the seller. If you want the option to walk away after the inspection without legal or financial risks, a home inspection contingency is highly recommended.

What should your contingency cover?

• Clear response deadline. Your contract will state how the “days” are counted (calendar vs. business days). Note this and set reminders.
• Buyer’s sole discretion to cancel. Strong inspection clauses let you withdraw after the home inspection and keep your earnest money, as long as you give notice on time and as the contract states.
• Right to seek further evaluation. If the inspector notes foundation, roof, electrical, plumbing, or moisture issues, you may want to bring in specialists and get repair estimates.
• Repair/credit options. Ask your real estate agent to include that you may request seller credits at closing (they can be cleaner than pre-close repairs) or a re-inspection if the seller completes the repairs. 

Know when to walk away after a home inspection

A home inspection is when a licensed inspector thoroughly goes through a home, flagging any visible issues both inside and outside of the property. Most of the time, minor maintenance and cosmetic items will be jotted down and aren’t anything to worry about. But when big repairs come up in the home inspection report, it can give many buyers a reason to pause and reconsider the deal. 

Home inspection red flags — like structural issues, septic problems, HVAC replacement, and more — can be dealbreakers for a lot of buyers, but there are often other clear signs it might be time to walk away.

1. Needed repairs are out of your budget

Updating outlets to meet current code could be a minor financial inconvenience, but when issues start to stack up, like needing to upgrade both the electrical and the roof, it might mean the home you’re buying is suddenly out of budget. If going into the deal already puts you on the top end of your budget, there might not be any money left for repairs — and negotiations could be out of the question if it’s a seller’s market and there are back-up offers waiting.

2. Repairs feel like too much to take on

Even if you can negotiate repair credits with the seller or have extra money budgeted for home maintenance, sometimes it just might be too much work. If the foundation needs to be repaired, it could mean delaying move-in by weeks or months. If the septic system is due for replacement, that can involve having the water shut off or potentially even financing issues with your lender, all of which is extra time, stress, and money.

3. Researching the property turned up more than you bargained for

While it’s best to research a home as much as you can before putting in an offer, sometimes timelines don’t allow for it. That’s why during your due diligence period, you should be doing as much as you can to learn about the property. Whether that’s finding out someone passed away in the house, or that power outages in the area can be frequent and you work from home, knowing as much as you can about a home before sealing the deal can save you from unpleasant surprises after closing.

4. Seller dishonesty or a bad gut feeling

Finally, as much as we want to see the best in people, the reality is sometimes sellers won’t tell you (or their listing agent) everything they know about the home, even items they might be required to disclose. If a note turns up in the home inspection report that raises personal alarm bells, it can be best to trust your gut feeling. If something doesn’t feel right, it’s ok to walk away, even if it seems minor in the moment. There will always be another house — maybe one that’s an even better fit.

Other reasons a buyer might walk away

Home sales can fall through for reasons not just related to the home inspection. Buyers could also walk due to:

• Not liking the neighborhood at certain times of the day.
• The home isn’t listed in a flood zone but still prone to flooding or other climate risks.
• The home not meeting individual buyer needs (i.e. number of outlets, capacity of water heater, etc).
• Disagreements or conflicts with neighbors before closing.
• Repairs or fixes were not done or up to buyer standards during the final walkthrough.

Homebuyer due diligence tips:

• Drive by the property at different times of day and in various weather conditions.
• Research the property as much as possible.
• Make sure the home is meeting your needs and expectations; and if not, that it can be reasonably addressed.

How to back out after the home inspection

If your report reveals deal-breakers, or the fixes, timeline, and stress exceed your comfort, you want to make sure you can exit the transaction cleanly and protect your deposit.

1) Confirm your deadline. Recheck the inspection contingency deadline and how days are counted. If you need more time for bids, have your agent request a short written extension, or addendum, before the deadline; the seller must agree in writing. 

2) Decide whether to negotiate or cancel. If you want to try negotiating first, send a single written request bundling the largest items and asking for a closing credit or specific licensed repairs. If the seller refuses or offers too little, you can still walk away, as long as you’re within the contingency window.

3) If you’re canceling, give notice in writing. Your agent will typically deliver a contract form or written notice that cites the inspection contingency and states you’re terminating based on the report. Keep proof of delivery through both email and the brokerage system. When you cancel properly and on time, you should recover your earnest money. 

4) Release the deposit. Escrow may require a mutual release or specific instructions from both parties. Ask your agent which form your state uses and how long it typically takes. 

5) Close the loop with your team. Notify your lender and insurance broker that you’re canceling so they can stop their orders. If the seller made repairs or you negotiated briefly, keep your inspection, bids, and notes as they might come in handy with the next home.

How to walk away if you waived the inspection contingency

If you waived the inspection contingency, your only clean exits are usually another clause like financing, appraisal, title/HOA review, or a negotiated mutual release. Otherwise, you can still back out of the contract but will likely forfeit your earnest money, so it’s best to talk to your agent and a local real estate attorney first.

When to walk away after the home inspection: bottom line

Not every problem found on an inspection report will be a deal-breaker, but some items on the list could mean it’s time to move on. It might be in your best interest to walk if you’re experiencing:

• Immediate and major safety hazards.
• A water/structure combo like active leaks plus foundation/roof issues.
• Opening up walls.
• First-year costs that drain your cash reserve.
• Friction with financing or insurance lenders due to issues.
• A seller who won’t budge on credits, repairs, or a brief timeline extension. 

If you’re already at the top of your budget and your gut says “not at this price,” trust it.

If you’re on the fence, get a few estimates for the biggest items, prioritize safety over cosmetic fixes, and ask for a closing credit or a short inspection extension to finish your due diligence. If the numbers still don’t work, or you can’t get the answers you need within your timeline, use your inspection contingency to cancel in writing before the deadline and protect your earnest money. The right home will fit your budget, risk tolerance, and timing.

The short answer: Yes. Even new homes can have defects, ranging from misinstalled appliances to roof damage to grading problems.

New construction single-family home sales have been rising since the pandemic, with builders frantically trying to keep up with the housing demand uptick that began in 2020. Builder incentives, mortgage-rate buydowns, and cash toward closing costs have also made new builds more enticing, especially as the gap in sale price between new construction and older homes starts to close.

Many buyers think that investing in new construction means they’re moving into a home with zero problems. But “new” doesn’t necessarily mean “perfect” — something that many new build homeowners may discover if they opt to skip a new construction home inspection, whether buying a house in Washington, DC or Dallas, TX.

Is a home inspection needed for new construction?

Yes, almost always. When you buy a pre-owned home, it’s practically a given that the buyer will get a home inspection. With new construction, many buyers assume that municipal building inspections or builder warranties make an additional inspection unnecessary — but what it comes down to is builder goals vs buyer expectations.

“Builders are under a lot of pressure to deliver as many houses as they can, as fast as they can, to fulfill their financial obligations with their shareholders,” says Fred Rodrigues, owner and inspector at Damngood Inspection in South/Central Florida. “The builders’ goals are to deliver the house as fast and as efficiently as possible; the expectation buyers have is that what you are buying is a great quality product.”

When to schedule a home inspection for new construction

When you’re getting an inspection on a new construction home, there are a few key timing points to keep in mind: depending on whether you’re building and buying a new construction home, or closing on a newly completed spec house.

1. From the ground up

If you’re involved during construction, a 3-phase inspection is when a home inspector looks at the house during three crucial parts of the building process, with an optional check after move-in:

• Foundation inspection: after the concrete is poured.
• Pre-drywall inspection: before walls are sealed up.
• Final inspection: when the home is nearly complete, before closing.
• 11-month warranty inspection: before the builder’s warranty expires (optional).

2. Buying a finished “spec house”

If the home is already built or nearly done, schedule an inspection before closing. This is your chance to request repairs or negotiate with the builder, says Rodrigues. “The builder wants to close on the house to get the money, but you as the buyer need to make sure the product they are delivering is as promised.”

What inspectors look for in new construction homes

As long as the home is almost ready, an inspector will be checking for the same things they would on any other house.

On a new construction home, inspectors will check the house’s:

• Foundation
• Exterior walls
• Roof
• Garage, crawl space, & attic
• Electrical panels
• Plumbing
• HVAC
• Appliances

“One of the first things we do in a new construction inspection is to inspect the roof,” Rodrigues says. That’s where a lot of problems can start, either from improper installation or sustaining damage throughout construction.

Common problems to watch out for in new construction homes

The pressure to build quickly and the large number of sub-contractors working on a new build are often the biggest factors in construction mistakes. Some of the most common issues Rodrigues finds during new construction inspections are missing insulation, drainage issues, and small leaks that could turn into expensive repairs if not caught and remedied early on.

A 2022 survey revealed the most common problems found during new construction home inspections:

• HVAC system issues
• Safety issues
• Problems with finishes
• Drainage issues
• Structural problems
• Leaks or water damage
• Foundation problems
• Drafty doors / windows
• Roof problems
• Non-functioning electrical outlets

The same survey found that nearly 9 in 10 new homes still required maintenance sooner than expected, with the most frequent issues tied to electrical, HVAC, plumbing, flooring, foundations, and drywall.

Bottom line: don’t skip the home inspection 

New construction homes have a lot of moving parts, tight deadlines, and profit margins to consider. Even with new materials and modern construction, errors happen. A professional inspection helps catch problems early, so they can be fixed before closing or under warranty.

That’s why it’s important to hire both an inspector and a real estate agent that will be on your side, says Rodrigues. If buying a new construction home, a Redfin agent can help you find a trusted inspector, guide you through phase inspections, and help protect you, and your investment, every step of the way.

FAQs about new construction home inspections

How much does a new construction home inspection cost?
A standard new construction home inspection typically costs $300 to $500, depending on the size and complexity of the property. Larger homes or houses with basements, crawl spaces, or special add-ons can cost $600 or more.

If you choose a 3-phase inspection package (foundation, pre-drywall, final, and optional 11-month warranty check), many inspectors charge $800 to $2,000 total. Each inspection phase can run between $100-$500, and some inspectors offer discounted rates if you book the full package upfront. These are typical estimates and can vary by location and provider.

What is the biggest red flag in a home inspection?
The biggest red flag in a home inspection is usually structural, like foundation cracks, uneven floors, sagging roofs, or framing problems. These can mean serious problems that are expensive to fix. Other major issues could include water intrusion, faulty electrical systems, and plumbing or HVAC failures, which can create both safety risks and ongoing maintenance headaches.

What is the final walk through inspection for new construction?
The final walkthrough on a new construction home is also called a “blue-tape walkthrough,” and is the last inspection before closing. Buyers walk the property with the builder to make sure all the work has been completed as planned, the systems and appliances work, and all the finishes meet expectations. Blue painter’s tape is often used to point out any flaws or unfinished details, otherwise known as a “punch list” of items the builder needs to fix before move-in.

Making an offer is one of the most important steps in the homebuying process. It’s the point where you find out if the home will be yours or not. From deciding how much to offer to choosing contingencies and earnest money, and preparing for negotiations, there’s a lot to consider. 

In this Redfin article, we’ll outline how to make an offer on a house in six steps. Whether you’re buying a home in Minneapolis, MN, or a townhouse in Austin, TX, here’s what you need to know about making an offer on a home so you have the best chance of getting it accepted. 

6 steps to make an offer on a house
1: Decide on how much to offer
2: Choose your contingencies
3: Decide on earnest money amount
4: Write up the offer letter
5: Submit your offer and wait
6: Negotiate the terms of the sale

What to do before making an offer

Before making an offer on a home, there are a few things you should do that can help make the process smoother. Let’s explore them.

Get a mortgage pre-approval

A pre-approval letter tells you how much a lender will loan you to buy a home. Most sellers won’t take an offer seriously without pre-approval, so having one ready lets you move fast when you find a home.

Keep in mind that a pre-approval is different from a pre-qualification. A pre-approval is the more serious of the two, as a lender examines your finances to decide how much to lend. A pre-qualification only uses the information you provide.

Learn about the local housing market

If homes are selling quickly and above the list price, you’re likely in a competitive market. You could end up competing with other buyers or get drawn into a bidding war on a home. Knowing the market can help you decide what price to offer. Look up housing trends in your area and ask your real estate agent for their expertise.

Get insight from your agent

Your real estate agent may also know information about why the sellers are selling their home. If the sellers are in a hurry to sell, you may be able to submit a slightly lower offer. However, if the sellers aren’t in a rush, they may be more likely to wait for a higher offer.

Understand the basics of an offer

Your real estate agent will put together your offer using a standard template that includes all the key details:

• Your offer price
• Your down payment amount
• The amount of earnest money you’ll deposit
• A copy of your pre-approval letter
• Any contingencies you want to include
• A breakdown of the closing costs and who will pay each one
• When you hope to close (i.e., complete the purchase)
• The offer’s expiration date

We’ll cover some of these, but your agent should be able to walk you through them all and help you decide how to make an offer that works for you.

How to make an offer on a home

Once you’ve learned what to do before making an offer on a house, you can move on to the steps of making an offer.

Step 1: Decide on how much to offer

If you’ve already been pre-approved, you probably have a good idea how much you can afford to spend on a home. But the price you decide to offer will depend on many factors – the competitiveness of the housing market, the home itself, your budget, and more. 

Housing market conditions: 

• Buyer’s market: More homes for sale than buyers – you may have the opportunity to offer lower than the home’s listing price.
• Seller’s market: Fewer homes for sale than buyers – you may need to offer above the listing price to stand out above the competition. 

Budget: Your budget is often the biggest factor in determining how much to offer on a house. Even if you’re approved for a larger mortgage, that doesn’t mean you should buy more than you can afford. Consider offering less than your mortgage amount to leave room for negotiation.

The home: There are circumstances where it makes sense to offer an amount above or below the list price, and others where you should meet the list price. Your agent can help you determine the right offer for you. Some factors include: 

• Time on the market: The longer the home has been on the market, the more likely the seller is to consider a lower offer.
• Necessary repairs: If the property needs lots of repairs or is turnkey, it can affect how much you offer. 
• Comparable homes in the area: Your real estate agent can pull comparable homes, also called “comps,” which are similar homes for sale or recently sold in the area. This gives insight as to whether the home is fairly priced. 
• Competition: Competition for a home can highly influence your offer. Talk with your agent about handling a bidding war or making a backup offer if the seller has already accepted one.

Step 2: Choose your contingency clauses

Contingencies protect you as the buyer by giving you a way to back out of the deal if certain conditions are not met. When you use a contingency to cancel the deal, you can usually recover your earnest money. 

Sellers prefer offers without contingencies, so use them sparingly if you can. The contingencies available depend on your location and the current housing market, but here are the most common ones:

Step 3: Decide on the earnest money amount

The third step is deciding how much to offer in earnest money. Earnest money is a deposit, usually 1-3% of the home’s sales price, that you pay after your offer is accepted. It shows that you’re committed to purchasing the home.

If the sale goes through, it’s applied to closing costs. If you back out of the sale due to a reason covered in your contract, such as a contingency that isn’t met, earnest money will be refunded to you. The seller keeps the earnest money if you withdraw from the sale for another reason.

Step 4: Write up the offer letter

This refers to the legal offer document, not a personal letter to the seller. Personal letters to sellers are discouraged as they can violate Fair Housing laws.

Your real estate agent will draft up the offer letter for you, but if you’re working without an agent, here’s what you’ll need to include:

• Address of the home you’re offering to buy
• Your name and anyone else’s name that will be on the house title.
• Your offer price
• Any contingencies you want to include
• Any seller concessions you’re asking for, like repairs or closing costs
• Your mortgage pre-approval letter
• Items you want in the sale, such as appliances
• Earnest money deposit amount
• The date you anticipate the loan closing
• The date you expect to move in
• Deadline for the seller to respond to the offer

Step 5: Submit your offer and wait

Once your offer is ready, your real estate agent will submit it on your behalf. If the seller has received other offers or expects to, you may have to wait a few days for an answer. 

Step 6: Negotiate the terms of the sale

It’s common to negotiate with the seller, and having an experienced real estate agent is crucial. Discuss ahead of time which aspects of the offer you’re willing to negotiate and which are non-negotiable. Here are three scenarios you may face after submitting your offer. 

Scenario 1: The seller accepts your offer

If the seller accepts your offer, then you’ll move on to the next steps. This means signing the purchase and sale agreement, gathering your earnest money, and applying for a mortgage. 

Scenario 2: The seller makes a counteroffer

The second option is that the seller makes a counteroffer. It’s up to you and your real estate agent how you’d like to proceed. The negotiations are typically informal and help you come to an agreement – or walk away from the deal.

Here are some things to consider:

• You don’t have to negotiate the purchase price: While it may be that the seller’s counteroffer is a higher purchase price than you offered, that doesn’t mean you have to accept that. You can consider negotiating repair costs or other concessions. 
• Learn what the seller is looking for: Your real estate agent will reach out to the sellers and their agent to determine what the sellers are looking for. Do they want you to remove contingencies? Were they looking for a higher price? This information can help you determine what to negotiate. 

Scenario 3: The seller rejects your offer

The final scenario is that the seller rejects your offer. Maybe your offer was too low, or there was a cash buyer. If your offer is rejected, then you can begin looking at other homes on the market. 

What happens after your offer is accepted?

Congratulations, your offer was accepted. Here’s what you can expect next:

• Sign the contract: Read it carefully, and make sure you understand the details before you sign.
• Secure your mortgage: You’ll need to apply for your home loan. Your lender will conduct a deeper financial review, finalize your loan terms, and order an appraisal to confirm the home’s value. 
• Schedule your inspection and appraisal: Be sure to have a home inspection to uncover any issues with the property and arrange a home appraisal.
• Close on your new home: When any contingencies are met and your mortgage is ready, you can sign the paperwork and close on the home. Your lender will transfer your funds to the attorney or title company to finalize your purchase and receive the keys.

FAQs about making an offer

How much should I put down?

How much your down payment is will vary depending on your loan type and budget, but here are some things to consider. 

• 0% down – VA or USDA loans
• 3-5% down – FHA and some conventional loans
• 10-20%+ down – Helps avoid private mortgage insurance (PMI) and lowers monthly payments. 

What if I’m caught in a bidding war?

A bidding war happens when a seller receives multiple offers in a short amount of time. Because buyers are competing against each other, they may raise their offer price, give up contingencies, or make other “concessions” to make their offers more appealing. Your agent can give you advice to help you avoid bidding wars when possible, and navigate them wisely when you can’t.

How much is too low to offer on a home?

Offering a lower offer on a house than the list price depends on several factors. Your real estate agent will have insight as to what is too low to offer. 

How long does it take to close on a home?

Closing on a home with a mortgage can take anywhere from 30 to 60 days. There are things you can do to prevent delays and speed up the closing process.