How to Read a Home Inspection Report: What Deficient Means

Page one of the Texas property inspection report form carries a short list headed "The inspector IS NOT required to," and the fourth entry on it is the reason the document in your inbox arrived in no particular order: "prioritize or emphasize the importance of one deficiency over another." The form is REI 7-6, promulgated by the Texas Real Estate Commission, edition dated 8/9/21, and §535.223(1) makes it the required report for any inspection performed for a prospective buyer or seller of substantially complete one-to-four family residential property. A cracked sidewalk and a gas line without bonding get the same checkbox, in the same typeface, with no ranking between them anywhere on the page.

So the sorting is yours to do, and it has a deadline on it. That much the form also says, in the section immediately below — the one headed RESPONSIBILTY OF THE CLIENT, misspelling and all, in the 8/9/21 edition.

The useful part is that you are not sorting without instructions. Four documents define severity for you — a state rule, two editions of a trade standard, and a standard contract — written by three bodies with nothing in common. On the one question that matters most, whether an old component is a defect, three of them say the same thing in three different vocabularies, and the fourth is the one that leaves it open. This piece reads the definitions in each, then puts them in the order that matters before a contingency expires.

Everything quoted below was read on 29 September 2026: REI 7-6 and its instruction sheet, the Texas standards of practice at 22 TAC §535.227 and the report-form rule at §535.223, the ASHI Standard of Practice in the version effective March 1, 2014 and the 2026 revision approved January 8, 2026, and Paragraph 12 of the Florida Realtors/Florida Bar residential contract, checked against both the December 2024 redline that produced form 7 and the February 2026 redline producing 7x.

One box, two completely different problems behind it

Texas is the state to start with, because it is the one that wrote the word down. Under 22 TAC §535.227(b)(5):

Deficiency — In the reasonable judgment of the inspector, a condition that: (A) adversely and materially affects the performance of a system, or component; or (B) constitutes a hazard to life, limb, or property as specified by these standards of practice.

Read the "or." A checked D box means one of two unrelated things happened. Either a component is not doing its job, or a component is dangerous. The dishwasher that will not drain and the panel with a double-tapped breaker both qualify, and the form gives you no way to tell them apart except by reading the sentence the inspector typed underneath.

Subsection (b)(6) then defines Deficient as "reported as having one or more deficiencies" — note the plural. A single box can be carrying six findings.

Three neighbouring definitions do more triage work than the deficiency definition itself:

• Cosmetic (b)(4): "Related only to appearance or aesthetics, and not related to performance, operability, or water penetration."
• Performance (b)(9): "Achievement of an operation, function or configuration relative to accepted industry standard practices with consideration of age and normal wear and tear from ordinary use."
• Inspect (b)(8): "To operate in normal ranges using ordinary controls at typical settings, look at and examine accessible systems or components and report observed deficiencies as specified by these standards of practice."

Age is inside the performance test, not outside it. A twenty-two-year-old water heater that heats water is performing, by the state's own definition, because the standard against which it is measured already accounts for its age. And §535.227(d)(2) closes the loop from the other direction by listing what the inspector is not required to report at all: "(A) past repairs that appear to be effective and workmanlike except as specifically required by these standards; (B) cosmetic or aesthetic conditions; or (C) wear and tear from ordinary use."

That is the first real sorting rule, and it is a subtraction: if an item's only stated problem is that it is old, the rule that governs the report did not require the sentence to be there.

The four boxes, and what two boxes at once are telling you

The instruction sheet TREC publishes for inspectors is two pages long and is the most practical reading guide available for the report, even though it was not written for buyers. Under §535.223(5), the inspector "shall indicate, by checking the appropriate boxes on the form, whether each item was inspected, not inspected, not present, or deficient," and must explain the findings in the corresponding section. If more than one box is checked, the rule requires an explanation of why.

The combinations are where reading skill pays, and the instruction sheet spells out four of them:

• I + D — inspected, and a deficiency found. The ordinary case.
• NP + NI — the component should be present, is not, and so could not be inspected. The sheet adds that the inspector "may also need to check (D) Deficient if absence of component or system results in a deficiency." A missing smoke alarm is not an empty line; it is a finding.
• NI + D — present, not inspected, and the reason it could not be inspected is itself a deficiency. This is the most easily skimmed past combination on the whole form. It is the inspector saying: something is wrong here and it prevented me from seeing how wrong.
• I + NI — partially inspected, with an explanation of which portions and why.

Anything that came back NI belongs in a different pile from everything else, because the standard behind the report expects a default set of NI items on every house — the ones a general inspection is written never to reach.

Twenty-nine items, forty-seven findings, and where the extra count comes from

The number at the top of a modern report ("47 items," "12 major concerns") is not a number the standard produces. Count the form: REI 7-6 has 29 named items across its five required sections — 11 under Structural Systems, 2 under Electrical, 3 under HVAC, 5 under Plumbing, 8 under Appliances — plus an "Other" line in each section, plus six named items under Section VI, Optional Systems. Four boxes apiece. That is the entire state-mandated severity scheme: 29 lines, each either flagged or not.

A 47-line summary is therefore 47 comments distributed among 29 or fewer checked items. Three observations about the same crawl space produce three lines in the summary and one checked box on the form. This is not a criticism of the software; it is the reason a report length tells you almost nothing about a house.

It also explains where the colour coding comes from. Texas §535.223(3) lists, item by item, the changes an inspector is permitted to make to the standard form: change the typeface, change the colour of the typeface and checkboxes, add a cover page, add subheadings under items, attach extra pages of comments. Subsection (3)(O) permits the inspector to "attach additional reporting information produced by computer software so long as the standard report form is provided before that information." Nothing in the list authorises adding a severity column to the 29 standard items, and the form's own not-required list says prioritising is optional.

So the priority ratings live in the attachment, behind the form, in the part the state does not regulate — and the form says so in capital letters:

INFORMATION INCLUDED UNDER "ADDITIONAL INFORMATION PROVIDED BY INSPECTOR", OR PROVIDED AS AN ATTACHMENT WITH THE STANDARD FORM, IS NOT REQUIRED BY THE COMMISSION AND MAY CONTAIN CONTRACTUAL TERMS BETWEEN THE INSPECTOR AND YOU, AS THE CLIENT.

None of which makes a "Major Concern" label worthless. An experienced inspector's ranking is often the most useful page in the file. But it is that inspector's judgment, offered voluntarily, using words no rule defines, and it is not what the state or your contract will measure the item against.

ASHI uses four words for condition and, in the version still in force, defines one

Outside Texas, most general inspections run on a private standard adopted by reference in the inspection agreement, and the most widely adopted is ASHI's. Its central reporting duty, Section 2.2.B.1 of the 2014 text still in effect, requires the report to state:

those systems and components inspected that, in the professional judgment of the inspector, are not functioning properly, significantly deficient, unsafe, or are near the end of their service lives

Four conditions, one sentence. The 2026 revision keeps all four at Section 2.4.B.2 and stretches the last one to "near, at, or beyond the end of their normal useful lives." That is a severity vocabulary — four rungs where Texas has one — and it sits in the most important sentence either document contains. Read the 2026 file's first page before leaning on it: "the newly approved changes are not yet effective," and the cover line still reads "Effective tbd, 2026." Whatever arrived in your inbox this week was written under the 2014 text.

Now go looking for the definitions. The 2014 glossary runs alphabetically from Automatic Safety Controls to Wiring Method, twenty-five entries, and there is no entry between Shut Down and Structural Component. Of the four condition words in that reporting sentence, exactly one has an entry. "Significantly deficient" is not defined in the standard currently in force. Unsafe is:

A condition in a readily accessible, installed system or component that is judged by the inspector to be a significant risk of serious bodily injury during normal, day-to-day use; the risk may be due to damage, deterioration, improper installation, or a change in accepted residential construction practices.

The 2026 revision fills the hole, and it fills it in the exact place the older glossary skipped — the new entry sits between Shut Down and State, one line above Structural Component. The definition it adds is worth more to a buyer sorting a report than anything else in either edition:

Significantly Deficient means a condition that in the professional judgment of the inspector significantly affects the value, habitability, or safety of the dwelling and/or occupants but does not include decorative, stylistic, cosmetic, or aesthetic aspects of the system, structure or component. The fact that a system or component is near, at or beyond the end of the normal useful life is not by itself significantly deficient.

Two exclusions in three lines: cosmetics are out, and age is out. Which puts the fourth rung of the reporting sentence in an odd position — the inspector must report a component near the end of its useful life, while the standard's own definition says being there is not a deficiency, and the exclusions at Section 15.2.A.2 say the inspector is not required to determine "the age, life expectancy or remaining useful life of systems and components" in the first place. The text in force excludes less at the same spot: 13.2.A.2 covers only "the remaining life expectancy of systems and components." So the edition governing your report asks for the end-of-life note while declining to work out how far off the end is.

An end-of-life note is not the standard failing to make up its mind. It is a category of its own, and reading it as a defect is the single most expensive misreading available in a report. Two further clauses pin it down:

• 15.2.A.5 / 13.2.A.5: the inspector is not required to determine "methods, materials and costs of corrections." The 2014 text puts that reminder in parentheses inside the reporting duty itself, at 2.2.B.2, so nobody can miss it.
• 15.1.B.2.b / 13.1.B.2.b: inspections under the standard are not required to identify or report "cosmetic imperfections that do not significantly affect a component's performance of its intended function."

And ASHI's own two-speed triage is built into the reporting duty. Section 2.2.B.2 requires "recommendations to correct, or monitor for future correction, the deficiencies reported in 2.2.B.1, or items needing further evaluation." Correct, monitor, or send someone else — three outcomes, named in the standard, and the verb the inspector chose for each item is a stronger signal than any colour badge above it. The 2026 revision drops the middle one: 2.4.B.3 asks for recommendations "to repair or replace, or to obtain further evaluation and analysis by a qualified professional, tradesman or service technician," and monitor is gone from the list. On a report written today it is still a live category, which is worth knowing before treating every flagged item as work to be priced.

Further Evaluation is itself a defined term: "Examination and analysis by a qualified professional, tradesman, or service technician beyond that provided by a home inspection." When that phrase appears, the severity of that item is formally unknown, and only a specialist visit inside your remaining days will resolve it.

The hazard list that shows up on every house built before the rules changed

If your report on a 1978 house came back with a dozen electrical and safety flags, there is a specific page explaining why, and it is printed on the form. REI 7-6 carries a "Notice Concerning Hazardous Conditions, Deficiencies, and Contractual Agreements" which states that conditions may exist that "did not violate building codes or common practices in effect when the home was constructed but are considered hazardous by today's standards," that such conditions "may not be required to be updated to meet current code requirements," and that nevertheless the potential for injury "is significant enough to require inspectors to report them as Deficient (D)."

Then it names nine of them:

Reading that list changes the shape of a long report. These items are on it because a rule requires the box to be checked, not because the inspector judged the house to be failing, and the same notice says plainly that nothing obliges anyone to update them: "The decision to correct a hazard or any deficiency identified in an inspection report is left up to the parties to the contract for the sale or purchase of the home."

They are also, as a group, the cheapest and most concrete things in the file, and the most likely to be genuinely worth attention if a child will live in the house. Low severity for the transaction and high severity for a Tuesday afternoon are different axes. The report tracks neither.

Your contract may have already classified these items, in words you did not choose

Here is the part that decides outcomes, and it is not in the report at all. Depending on which standard contract you signed, the classification that matters may already be written and may disagree with your inspector's labels.

The Florida Realtors/Florida Bar residential contract does this more explicitly than any other widely used form. Paragraph 12(b)(ii) sets two different standards for two different groups of items:

• Free of leaks, water damage or structural damage: ceiling, roof (including fascia and soffits), exterior and interior walls, doors, windows, and foundation.
• Working Condition, defined as "operating in the manner in which the item was designed to operate": that list plus pool and pool equipment, non-leased major appliances, heating, cooling, mechanical, electrical, security, sprinkler, septic, and plumbing systems and machinery, seawalls, dockage, and watercraft lifts.

Then it names what the seller does not owe, and defines it:

"Cosmetic Conditions" means aesthetic imperfections that do not affect Working Condition of the item, including, but not limited to: pitted marcite; tears, worn spots and discoloration of floor coverings, wallpapers, or window treatments; nail holes, scrapes, scratches, dents, chips or caulking in ceilings, walls, flooring, tile, fixtures, or mirrors; and minor cracks in walls, floor tiles, windows, driveways, sidewalks, pool decks, and garage and patio floors. Cracked roof tiles, curling or worn shingles, or limited roof life shall not be considered defects Seller must repair or replace, so long as there is no evidence of actual leaks, leakage or structural damage.

That last sentence is the third document in a row saying that age is not a defect — after the Texas rule's exclusion of ordinary wear and tear and ASHI's 2026 definition. Three bodies with nothing in common reached the same line.

Two details in that paragraph cut the other way, and they are easy to skim. A cosmetic condition is the seller's problem when it "resulted from a defect in an item Seller is obligated to repair or replace" — stained wallpaper under a leaking roof travels with the roof. And three items that look cosmetic are carved in by name regardless: "Torn screens (including pool and patio screens), fogged windows, and missing roof tiles or shingles shall be repaired or replaced by Seller prior to Closing." Fogged double glazing reads as cosmetic to most buyers for a defensible reason: it is a failed seal between two panes, the window still opens and still keeps weather out, and nothing has stopped working. In this contract it is a named seller obligation anyway, in the same sentence as torn screens and missing tiles.

The same contract puts ceilings on all of it in Paragraph 9(a): separate limits for General Repair Items, for WDO treatment and repairs, and for closing out open or expired building permits — 1.5% of the purchase price each if the blanks are left empty. Three caps, three buckets, and that third one matters when a report mentions unpermitted work, because it turns an offhand comment about a converted garage into a line with its own budget.

Paragraph 12 also runs on its own clock: an Inspection Period of 15 days after the Effective Date if the blank is not filled, and if the buyer "fails to timely deliver to Seller a written notice or report required by (b), (c), or (d)," the buyer "shall have waived Seller's obligation(s) to repair, replace, treat or remedy the matters not inspected and timely reported."

Paragraph 12(b)(ii) is word-for-word identical in the December 2024 redline producing form 7 and the February 2026 redline producing 7x, so the language has been stable across revisions — but the revision your own contract uses is printed in the footer of every page, and that is the copy to read.

Plenty of contracts contain nothing like this. A Texas option period, a North Carolina due diligence period, a Florida AS IS contract: these buy an unconditional exit rather than a repair obligation, so there is no contractual list against which to sort, and the sorting question becomes whether to continue rather than what is owed. Which of those two shapes you are in is decided by the paragraph covered in what each contingency actually buys, and it determines whether classification is worth an afternoon or is merely interesting.

Four piles, and the document that assigns each one

With all four definitions on the table, the sort takes about an hour and produces four piles rather than a ranked list of 47.

The order the piles are built in matters more than the piles. The Unknown pile is the only one with an external clock — a sewer camera, a structural engineer, a licensed electrician all have their own schedules — and REI 7-6 says so in the client's own section: obtaining further evaluations and cost estimates is "the responsibility of the client," and it "is recommended that any further evaluations and/or cost estimates take place prior to the expiration of any contractual time limitations, such as option periods." Work out what remains of your due diligence window before reading a single comment closely, then spend the first hour only on deciding who else has to come.

Two cross-checks are worth running at the same table. Every finding on the report should be compared against what the seller wrote on the disclosure form, because an item the seller marked as unknown and the inspector marked as deficient is a different conversation from one nobody knew about — the blanks and "unknown" boxes carry their own meaning. And the roof or the exterior stair that the inspector called deficient may also be about to appear in a second document with a different vocabulary entirely: the appraiser's, where a condition rating can stop the loan regardless of what anybody negotiated.

The report describes one afternoon, and it starts going out of date immediately

Two sentences on REI 7-6 set a limit on how much weight the document can carry, and they are easy to miss because they sit in the paragraph most readers skip.

The first: evaluations performed by specialists in response to items reported as Deficient "may lead to the discovery of additional deficiencies that were not present, visible, or accessible at the time of the inspection." The Unknown pile does not resolve into the piles you already have. It can also produce new findings that never appeared on the original report at all, which is why sending a specialist out on the last available day is a worse plan than it looks.

The second: "Any repairs made after the date of the inspection may render information contained in this report obsolete or invalid." The report describes the house on the date printed at the top of page one, and it was already describing the past by the time it reached you.

There is a matching asymmetry at the other end. TREC's instruction sheet states that the standard form is not required when an inspector reinspects a property that was the subject of the original inspection for the same client — so a follow-up visit produces a document that need not look anything like the first one: no 29 items, no four boxes, no fixed sections. If the plan involves verifying something later, the comparison you expect to make between two reports may not be available in the form you expect it in.

Which leaves the original document doing exactly what its own first page says it does: a visual survey and a basic performance evaluation, on one date, unranked, obliging nobody. The ranking was always going to be assembled from somewhere else — a state rule's two-part definition, a trade standard's four words, a contract's list of what counts as working — and the only part of it with a deadline attached is deciding which items need a second person to come and look. Everything in the age-and-cosmetic pile will still be true next year, and next year is when it needs a decision. The two weeks you actually have belong to the pile nobody can yet classify, and to checking those findings against the deadline map your own contract set the day it was signed.