What is a "Deal Breaker" in a Home Inspection?

aaronwest241
Jul 7
2 min read

When buying or selling a home, many people fear the dreaded “deal breaker” inspection issue. But is there really such a thing as an unfixable problem?

Cartoon house with melting roof and walls, surrounded by a grassy yard. Blue ice drips over the edges, under a bright, cloudy sky.

Not exactly.

In reality, every home inspection issue can be solved—given enough time, money, or both. What makes something a true "deal breaker" typically relates to its impact on the lending process, especially with stricter financing options like FHA or VA loans.

How Your Financing Affects the Inspection Outcome

Different loan types have different requirements. Conventional loans tend to be more forgiving, while FHA and VA loans have stricter property standards that must be met before closing. If these standards aren't satisfied, it can delay your closing or prevent financing altogether until repairs are completed.

Potential Deal Breakers for FHA Loans:

FHA loans require the home to meet minimum property standards. Key points that can become hurdles include:

Roof: Must be leak-free and typically have at least two years of expected life remaining.
Structural Integrity: No major foundation cracks, termite damage, or severe water intrusion.
Electrical and Plumbing Systems: Must be safe and fully functional without exposed wires or leaks.
Safety Hazards: Issues like missing handrails, peeling lead paint, or poor drainage must be addressed.

When FHA standards aren’t met, repairs must be made before the transaction can proceed.

Potential Deal Breakers for VA Loans:

VA loans also have strict property requirements to ensure homes are safe and livable:

Structural & Safety Issues: The home must be structurally sound and sanitary—no active infestations, major damage, or significant safety hazards.
Electrical Systems: Must be safe and modernized. Exposed wiring or outdated panels often need immediate repair.
Functional Utilities: Plumbing, heating, and electrical systems must work effectively.
Appraisal Concerns: Homes must meet appraised values, or the buyer may have to renegotiate or cover the difference.

Like FHA, VA appraisal conditions typically must be fixed before loan approval.

Takeaway:

Home inspection findings rarely represent truly insurmountable problems. Instead, what people commonly refer to as “deal breakers” are often manageable—provided you understand your financing type and take appropriate steps.

The key to a smooth transaction is being proactive. Addressing potential deal breakers early can save time, money, and unnecessary stress during your home-buying journey.