TL;DR
Not every home inspection finding is a dealbreaker. But seven categories consistently separate the $3,000-fix from the $30,000 headache: (1) foundation cracks wider than 1/4 inch, (2) roofs older than 20 years, (3) Federal Pacific or Zinsco electrical panels, (4) signs of recurring basement water, (5) galvanized or polybutylene plumbing, (6) furnaces older than 20 years with no service records, and (7) active or past knob-and-tube wiring. This guide walks through what each one actually means, when it’s a “walk away,” and when you can negotiate it down. In Michigan specifically, basement water and roof age are the two most common deal killers.
Intro
Home inspections in Michigan generate reports that run 40–80 pages. For a first-time buyer, that’s overwhelming — and the #1 way buyers either (a) kill a good deal over a cosmetic issue or (b) miss a truly expensive problem buried on page 37. This guide is the Saward Team’s working cheat sheet for separating the two. It focuses on what actually matters structurally, electrically, and mechanically — not the caulking suggestions that pad the report.
1. Foundation Cracks
What to look for: Horizontal cracks in poured concrete or block foundations, stair-step cracks wider than 1/4 inch, or cracks you can fit a pencil into.
What it means: Hairline vertical cracks are almost always normal settlement and cosmetic. Horizontal cracks, wide stair-step cracks, or any crack showing water staining or efflorescence (white mineral powder) can indicate real structural movement or water infiltration.
When to walk: Active horizontal displacement, bulging walls, or evidence the foundation is separating. A structural engineer’s inspection (~$500) is always worth the cost if anything looks serious.
When to negotiate: Hairline cracks, dry stair-step cracks on older homes, or minor settling can often be handled with a $500–$2,000 seller credit for monitoring and sealing.
2. Roof Age
What to look for: Curled shingles, visible wear at valleys and eaves, granules in the gutters, and — critically — the date of last replacement in the inspection report.
What it means: Most asphalt shingle roofs in Michigan last 20–25 years. Metro Detroit weather (ice storms, freeze-thaw cycles) pushes the lower end of that range. A 22-year-old roof in “decent” condition is still a roof on borrowed time.
Typical replacement cost (Downriver Michigan 2026): $9,000–$18,000 for a standard single-family asphalt roof.
When to walk: You can’t. Every house needs a roof. But a roof over 20 years old should be either replaced before closing (seller pays), credited at closing (buyer pays, seller reduces price), or factored hard into your offer.
When to negotiate: Roofs 15–20 years old with no active leaks and decent shingle condition. Ask for a 5-year homeowners warranty or a modest credit ($1,500–$3,000) for peace of mind.
3. Electrical Panel Brand
What to look for: The manufacturer name on the panel — usually on a metal label inside the door.
What it means: Two panel brands are actively dangerous:
- Federal Pacific “Stab-Lok” — known to fail to trip during overcurrent, leading to fires. Not grandfathered safely. Replace.
- Zinsco (also sold as GTE-Sylvania) — similar breaker failure pattern. Replace.
Some insurance companies will refuse to write policies on homes with either brand still in place.
Typical replacement cost: $2,500–$4,500 for a 200-amp service upgrade.
When to walk: You don’t usually walk, but either the seller replaces before close or you get a full credit. Don’t let this one slide.
4. Basement Water
What to look for: Efflorescence on walls, water staining at the floor/wall joint, tide lines on stored items, rust on metal legs of shelving or appliances, recent paint over staining, damp-smelling finished walls.
What it means: In Michigan, basement water is the #1 thing I see cause buyer regret after closing. A dry-looking basement in April doesn’t always stay dry in May after a week of heavy rain.
Ask for: Disclosure of any past water events, the last time the sump pump ran, service records for the drain tile or exterior waterproofing, and any insurance claims.
Typical fix costs:
- Sump pump replacement: $400–$900
- New sump + battery backup: $1,200–$2,000
- Interior drain tile system: $4,000–$10,000
- Exterior waterproofing: $8,000–$18,000+
When to walk: Documented recurring flooding, cracked foundation walls leaking actively, or a seller reluctant to disclose history.
When to negotiate: Minor dampness with no structural issue. A credit for a sump pump upgrade and a downspout extension often fixes 80% of basement dampness in Downriver homes.
5. Plumbing Material
What to look for: Dull gray steel pipes (galvanized), gray or blue flexible plastic pipes (polybutylene / “PB”), or any visible lead pipe sections.
What it means:
- Galvanized steel: Corrodes from the inside, restricting water flow and leaching metals. Common in homes built before 1970.
- Polybutylene (PB): Recalled in the late 1990s because it fails catastrophically. If you see gray PB pipe, plan to replace.
- Lead service lines (from the street to the meter): A Michigan disclosure item. If present, the municipality may be replacing them on a schedule — worth checking.
Typical re-pipe cost: $5,000–$15,000 for a full residential PEX re-pipe in a 1,500–2,000 sq ft home.
When to walk: Active leaks, brown water, or low flow throughout the house. Otherwise plan and budget.
6. Furnace & Water Heater Age
What to look for: The manufacturer date on the furnace and water heater labels. Most inspectors note these explicitly.
Typical lifespan:
- Furnace: 15–20 years
- Water heater: 10–12 years (tank); 15–20 (tankless)
When to negotiate: A furnace at 17 years or a water heater at 11 years is a reasonable credit request ($1,500–$3,500 for furnace; $1,200–$2,500 for water heater). Don’t expect sellers to replace before close unless the unit has actually failed.
7. Knob-and-Tube or Aluminum Wiring
What to look for: Inspector notations of “K&T” or “aluminum branch wiring.” Usually found in homes built before 1950 (knob-and-tube) or between 1965–1975 (aluminum).
What it means: K&T isn’t inherently dangerous but it can’t handle modern load and insulation around it creates fire risk. Aluminum branch wiring at outlets is the more common issue — aluminum-copper connections loosen over time and create fire risk.
Typical remediation: $3,000–$8,000 for “pigtailing” aluminum connections; $10,000–$20,000+ for full K&T replacement in an older home.
Insurance note: Some insurers won’t write a new policy on a home with active K&T. Verify with your insurance agent before waiving inspection.
The Saward Team’s Inspection Rule
Every inspection report has three buckets:
- Safety items — anything that threatens occupants (electrical, gas, structural). Non-negotiable. Seller fixes or credits.
- Big-ticket items — roof, foundation, HVAC, plumbing over $2,500 to fix. Negotiate hard.
- Everything else — caulking, minor paint, filter changes. Leave these alone or you look like a nit-picker and lose leverage on the real items.
A good buyer’s agent helps you focus on the first two and skip the third.
Frequently Asked Questions
What are the biggest red flags in a home inspection?
The biggest structural red flags are horizontal foundation cracks, active basement water, and load-bearing wall changes made without permits. Mechanical red flags include roofs over 20 years old, Federal Pacific or Zinsco electrical panels, galvanized or polybutylene plumbing, and furnaces or water heaters near end-of-life.
Should I walk away from a house with foundation cracks?
Not necessarily. Hairline vertical cracks are usually normal settlement. Horizontal cracks, wide stair-step cracks, or cracks with water staining warrant a structural engineer inspection (approximately $500) before deciding.
How much does a new roof cost in Downriver Michigan in 2026?
A standard asphalt shingle roof on a 1,500–2,000 square foot single-family home typically costs $9,000–$18,000 in the Downriver area, depending on pitch, layers, and decking condition.
What is a Federal Pacific electrical panel and why is it dangerous?
Federal Pacific “Stab-Lok” panels are known to fail to trip during an overcurrent event, creating a fire hazard. They should be replaced, and some insurance companies will not write policies on homes that still have them.
Is polybutylene plumbing a dealbreaker?
Polybutylene pipe was recalled due to sudden catastrophic failures. It is not a dealbreaker if you plan and budget for a re-pipe (approximately $5,000–$15,000 for PEX), but it should factor into your offer price or negotiated credit.
How do I negotiate inspection repairs in Michigan?
In Michigan, buyers typically submit a written request after inspection listing the items they want addressed. Sellers can agree, counter, credit at closing, or decline. Focus on safety and big-ticket items; let cosmetic items go.
Do I have to get a home inspection?
Legally, no — you can waive an inspection. Practically, you almost never should. Even on new construction, an independent inspection catches builder misses. Inspection cost in Michigan is typically $375–$550.
CTA
Under contract and worried about your inspection? Send us your report — we’ll review it with you, tell you what actually matters, and help you draft a smart repair request. Text 734-977-1405 or use our contact form. We’ve been through hundreds of these and know the difference between a real issue and a report padded with noise.
Chris Bujaki with The Saward Team, brokered by eXp Realty