Home Inspection Guide for San Francisco Buyers

I'm Christopher Lee, San Francisco Realtor (DRE #02120811). The inspection phase is where the most leverage exists in any San Francisco purchase — and where the most buyers make expensive mistakes by either over- or under-reacting to what an inspector finds.

This guide is the inspection playbook I walk every buyer through. It covers what to inspect (it's more than you think), what's normal versus what's a real problem in SF, how to read inspection reports, and how to negotiate effectively after the inspections come back.

Already in contract? Schedule a call and I'll walk you through the negotiation. If you're earlier in the process, start with the First-Time Buyer Guide.

The seven inspections every SF buyer should order

A general home inspection alone is not enough in this city. Here's the full menu I recommend, with rough costs:

Specialty inspections to consider:

• Soils / geotechnical for hillside properties
• Asbestos & lead paint for pre-1978 properties
• Mold air-quality test if visible water staining
• HVAC if forced-air system is older than 12 years

Total cost in a typical SF SFH purchase: $1,500–$3,500 in inspection fees. Money well spent on a $1.5M+ home.

San Francisco–specific issues to look for

These are the items that come up in this city far more than the rest of the country.

Foundation and structural

Many SF homes were built between 1880 and 1940. Foundations evolved from brick, to unreinforced concrete, to reinforced concrete. Common findings:

• Unreinforced masonry / URM foundation. Brick foundations on Victorians. Should be retrofitted; reduces earthquake risk dramatically.
• Cripple wall (soft-story). First-floor wood-framed walls under a building, often with garage openings. Pre-1991 buildings often need bracing.
• Sagging center beam. Common in long railroad-style flats. Sometimes structural, sometimes cosmetic.
• Settlement cracks. Diagonal cracks at door corners are common; horizontal cracks across foundation walls are not.

Always get a structural engineer (not just a general inspector) on pre-1940 properties.

Sewer laterals

Every SF property has a sewer lateral — the pipe from the building to the city main. They are the homeowner's responsibility. Common findings:

• Tree roots intruding through joints (especially in pipes that pass under trees)
• Bellies (sags) holding standing water
• Offsets at clay-to-clay or clay-to-cast-iron transitions
• Complete failure in pre-1960 clay pipe

Repair cost: $5,000–$25,000 depending on length, depth, and city street disruption. Always scope the lateral, even on newer construction.

SF has a Sewer Lateral Inspection Ordinance requiring compliance certification when properties are sold or substantially renovated. Familiarize yourself before negotiating credits.

Drainage and water intrusion

SF's microclimates and hillside lots produce specific water issues:

• Outer Sunset / Richmond — sand-based soil, generally good drainage but coastal moisture
• Bernal Heights / Twin Peaks / Diamond Heights — hillside, drainage matters
• South of Market / Mission Bay — historically lower water table, basement seepage common
• North Beach / Telegraph Hill — older buildings, varied drainage

Look for: efflorescence (white mineral deposits) on basement walls, sump pumps, French drains. None are deal-breakers if functional, but all should be investigated.

Electrical: knob-and-tube and federal pacific panels

Many pre-1950 SF homes still have knob-and-tube wiring in walls and ceilings. Insurance companies are increasingly refusing to insure homes with active K&T. A full rewire on a 2-flat building can run $25,000–$60,000+.

Federal Pacific Stab-Lok panels (1950s–1980s) have a documented failure history. Plan to replace.

Plumbing: galvanized supply lines

Pre-1960 homes often have galvanized steel supply lines that corrode internally, reducing water pressure and dumping rust into your water. Partial repipes from galvanized to copper or PEX run $10,000–$40,000 depending on size.

Soft-story compliance

San Francisco's Mandatory Soft-Story Program requires wood-framed buildings with 5+ residential units built before 1978 that have a soft, weak, or open-front story (typically over a garage) to be seismically retrofitted. Buying a soft-story building? Verify retrofit completion before close.

Knob-and-tube / lead paint / asbestos

Pre-1978 properties almost certainly have lead paint somewhere. Pre-1980s properties often have asbestos in popcorn ceilings, pipe wrap, floor tiles, and HVAC ductwork. Neither is a deal-breaker — both have disclosure and remediation rules.

The 3R report and 3R Compliance

San Francisco's 3R Report (Report of Residential Building Records) is a city-issued document showing all permit history, building violations, and zoning info for a property. The seller typically provides it.

Look for:

• Unpermitted additions (very common on SF properties)
• Open building permits
• Notices of violation
• Inconsistencies between actual layout and permitted layout (a "3-bedroom" that's permitted as a 2-bedroom)

This is a major value-and-risk issue and gets glossed over by most buyers. Read the 3R yourself.

Reading an inspection report like a pro

Most reports are 60+ pages and look terrifying. The right way to read them:

1. Read the summary first. Inspectors flag items as Safety, Major Defect, Maintenance, or Minor.
2. Focus on Safety and Major Defect. These drive negotiation.
3. Cross-reference with photos. A "cracked stucco" can mean anything; the photo tells the story.
4. Group findings by system. What's wrong with the roof? The foundation? The electrical?
5. Identify recurring themes. Five plumbing items often mean a whole-house plumbing question.
6. Estimate cost ranges. Get rough bids before negotiating, not after.

Christopher's Take: Buyers panic at long reports. The mature read is: every old SF home has issues. The question is which issues are systemic (whole-house plumbing, structural, electrical) and which are maintenance (caulking, GFCI outlets, regrading). Negotiate the systemic stuff; absorb the maintenance.

Negotiating after inspections: three approaches

After inspections, you typically have three options:

1. Request repairs

Seller fixes specific items before close. Pros: things are fixed when you move in. Cons: seller chooses contractor, often does cheapest job; in a competitive market, sellers may walk.

2. Request a credit

Seller credits you money at close to handle repairs yourself. Pros: you control the work, no rushed scheduling. Cons: needs lender approval, capped at certain LTVs.

3. Request a price reduction

Reduces the purchase price (and your loan amount). Cleanest mechanically.

My usual recommendation in SF: credits or price reductions, not repairs. You get better work done by contractors you trust, on your schedule.

What to ask for vs what to absorb

Always negotiate:

• Sewer lateral if scope showed bellies, breaks, or roots
• Active leaks
• Roof at end of life
• Failed water heater, HVAC, or panel
• Foundation/structural issues confirmed by an engineer
• Safety items (electrical hazards, gas leaks, etc.)
• Anything not disclosed that's material

Usually absorb (or split):

• Cosmetic items
• Minor caulking, weatherstripping
• Older but functional appliances
• Aesthetic deferred maintenance

In a competitive multiple-offer market, asking for too much can get a deal canceled. In a slower market, sellers expect to negotiate post-inspection.

Contingencies and timing

A standard California Residential Purchase Agreement gives the buyer 17 days of physical inspection contingency by default — but most SF offers are written with shorter contingencies (7–10 days) or no contingency at all to compete.

No contingency = no leverage post-inspection. You can still inspect, but you can't renegotiate or walk without losing your deposit.

This is why pre-offer inspections have become common in SF. If a listing comes with a pre-listing inspection report and you trust it, you can write a no-contingency offer with reasonable confidence. If you don't trust it (or there isn't one), an inspection contingency is worth giving up some price competitiveness for.

Read more in the Understanding Contingencies guide.

Pre-listing inspection packages

Many SF listings come with a pre-listing inspection package: general inspection, pest, sometimes sewer scope, sometimes structural. Read them carefully:

• Inspectors hired by the seller may pull punches.
• Reports may be 30–90 days old; conditions can change.
• The PEST report (Section 1 / Section 2 items) is especially important and often glossed over.
• You can — and often should — order your own inspection even when a package exists.

What to do BEFORE you write an offer

If you're seriously interested in a property:

1. Read the seller's disclosure packet completely (TDS, SPQ, NHD, etc.).
2. Read the 3R report. Cross-check permits to actual layout.
3. Review any pre-listing inspection reports.
4. Call your inspector and ask for an initial walkthrough opinion if time allows.
5. If condo: read the HOA docs, two years of meeting minutes, reserve study, and budget.

Common SF inspection mistakes

• Skipping the sewer scope. I've seen $20K sewer surprises in homes that looked perfect.
• Hiring a non-SF inspector. Out-of-area inspectors miss URM foundations and SF-specific issues.
• Trusting only the seller's reports. Always at minimum review your own.
• Negotiating from the report instead of from contractor bids. Numbers carry more weight than findings.
• Walking on cosmetic issues. Every SF home will have some.

Next steps

1. Read the First-Time Buyer Guide.
2. Read Understanding Contingencies in California.
3. Read Multiple Offer Strategy.
4. Schedule a consultation — if you're in contract, bring the inspection report and I'll walk you through negotiation.

The inspection phase is where I earn my keep. The right inspector, the right pre-offer due diligence, and the right post-inspection negotiation routinely save my buyers $15K–$75K on a single transaction.