Buying a House with Ungrounded Outlets

Buying a House with Ungrounded Outlets

Ungrounded outlets are a safety hazard that not only can result in electric shock for individuals living in the home, but it increases the chances of an electrical fire.

Buying a house with ungrounded outlets is okay if you or the seller take the necessary steps to make the electrical system safe before moving in.

Problems When Buying a House with Ungrounded Outlets

Buying a house with ungrounded outlets can be more dangerous than buying a home with aluminum wiring. You may experience some or all of the following problems during the transaction.

  1. Fail the Home Inspection – A home inspector will immediately determine that the home has ungrounded outlets. The inspection would be considered to be a failure and he/she will recommend the problem be mitigated before closing.
  2. Difficulty Finding Homeowner’s Insurance – Most homeowner’s insurance companies will not insure a home if it has ungrounded outlets. Those who do will charge a higher premium for coverage to offset the additional risk.
  3. Lender Denies the Mortgage – Your lender may deny the mortgage despite having adequate homeowner’s insurance in the event of a fire.
  4. Selling the Home in the Future – If you purchase the home and put some measures in place to make the home safe, you may still have difficulty selling the home if there is no ground wire going from the outlets and switches to the electrical panel.

How Do You Know if the House has Ungrounded Outlets?

There are two primary ways to determine whether a house has ungrounded outlets and you do not need to be an electrician to figure this out.

First, if any of the outlets appears to be a two prong outlet, then it is likely not grounded. Below you will see the difference between a two prong and a three prong outlet. On the three prong outlet, the round hole is the ground. If an outlet is missing that, then it is not grounded.



Second, you can use a receptacle tester (as seen below) and plug them into each outlet. You can do this with every outlet even if it seems to be a three prong outlet. Sometimes outlets are not installed properly. Not only can a tester like this quickly tell you whether the outlet is grounded, but it will also let you know whether the load and neutral wires were connected properly.

receptacle tester






How to Buy a House with Ungrounded Outlets

The first thing you must do when purchasing a home with ungrounded outlets is to have an in depth inspection. Hire an inspector and maybe even an electrician who can do a full evaluation of the electrical system and grounding.

You will be provided with three options when purchasing the home:

  1. New Wiring – Seller or buyer run new wires throughout the entire home. This will cost thousands of dollars but will provide peace of mind that the home is safe.
  2. Install GFCI outlets – You can install GFCI outlets throughout the home. If a GFCI outlets should be installed at the first outlet where the wiring ties into when coming from the electrical panel. The GFCI outlet will protect that outlet plus any other outlet or device that is tied into the same wire. The GFCI will act like a breaker and will trip to prevent shock or fire.
  3. Search for a Different Home – Your final option is to avoid buying a home with ungrounded outlets. If this is your dream home, then move forward with the purchase and mitigate the grounding problem. Otherwise, fall in love with another home in the area that has grounded outlets and is safe.

If you still need help and would like to speak with someone about a mortgage to purchase the home with ungrounded outlets, just complete this short form and one of our specialists will call you.

Will an Ungrounded House Pass Inspection

If you are buying a home with ungrounded outlets, it will not pass inspection. If you are buying a home with an FHA loan, the situation would need to be mitigated prior to closing. The exception to this would be an FHA 203k rehabilitation mortgage loan where the repairs can be made after closing.

If you are buying a home using conventional financing, you can still purchase the home but it is advised to ground the outlets or install GFCI outlets immediately. Suggested reading [Problems that Must be Fixed After a Home Inspection]

Can You Sell a House with 2 Prong Outlets

If you are selling a home with 2 prong outlets that are not grounded, you can expect this to become an issue with the buyer prior to closing. It will be discovered during the inspection and you will likely be asked to fix the grounding issue or provide the buyer with a credit to complete the work after closing.


You can purchase a home with ungrounded outlets, but it is imperative to take action and make corrections immediately.  Leaving the outlets ungrounded will be extremely dangerous which means you should bring in an electrician to help deal with the issue.