Furnace and AC Problems on a Home Inspection Report

What do furnace and AC notes on a home inspection report mean?

A home inspector runs the furnace and the air conditioner with the thermostat, looks at the equipment, the venting, the filter and the condensate drain, and reads the data plates for age. It's a visual check, not a teardown. Most inspectors don't take the furnace apart to look at the heat exchanger, and many won't run the AC when it's cold outside because it can damage the compressor.

The notes you'll see most often:

• "Unit is near or beyond its typical service life. Budget for replacement." The equipment works, it's just old. Inspectors write this one often.
• "Recommend evaluation and servicing by a qualified HVAC contractor." Often paired with a dirty filter, no service tag, or rust in the cabinet.
• "Possible cracked heat exchanger" or "flame disturbance when blower started." This is the safety note. It needs a contractor, not a guess.
• "Unit uses R-22 refrigerant." An older AC with a refrigerant that's no longer made.
• "Temperature split outside normal range," "dirty evaporator/condenser coil," or "condensate line not properly terminated." Performance and maintenance items.
• "AC not tested due to outdoor temperature." Not a defect, but it means nobody has confirmed the AC works.

How serious is a cracked heat exchanger?

This is the furnace finding that matters. The heat exchanger is the metal chamber that keeps the burner's exhaust separate from the air blowing through your ducts. If it's cracked or rusted through, combustion gases, including carbon monoxide, can get into the house air.

The CPSC says more than 200 people a year die from unintentional, non-fire carbon monoxide poisoning tied to consumer products, and that heating equipment is among the top contributors. It urges a yearly professional inspection of every fuel-burning heating system: furnaces, boilers, water heaters, chimneys, flues and vents (CPSC Carbon Monoxide Information Center). It also recommends CO alarms on each level and outside separate sleeping areas, tested monthly (CPSC, 2024).

Home inspectors usually can't see the heat exchanger without taking the furnace apart. What they report are the signs: the flame jumps or changes color when the blower kicks on, rust or soot at the burners, a CO reading in the supply air. That's why the report says "possible." An HVAC contractor confirms it with a camera, a combustion analysis or by pulling the burners.

If it's confirmed, the furnace should be shut off until it's repaired. HomeAdvisor puts a heat exchanger replacement at $1,250 to $3,000, about $1,750 on average (HomeAdvisor, updated June 2026). The part may be under warranty while the labor usually isn't. On an older furnace, most people put that money toward a new furnace instead.

What does a dirty coil, dirty filter or condensate issue mean?

These are maintenance notes, and they're the cheap end of HVAC findings. The Department of Energy says replacing a dirty, clogged filter can cut an air conditioner's energy use by 5% to 15%, and that dirt on the coils reduces airflow and insulates the coil so it can't absorb heat well (DOE Energy Saver, Air Conditioner Maintenance).

Condensate is the water your AC (and a high-efficiency furnace) pulls out of the air. It has to drain somewhere: a floor drain, a condensate pump, or outside. DOE notes that clogged drain channels keep the unit from removing humidity and can lead to water stains on walls or carpet (same source). On a report, watch for:

• A condensate line that ends on the floor or in a crawl space instead of a drain.
• A condensate pump that's full, unplugged or not working.
• Water or rust in the bottom of the furnace cabinet, which can mean the coil drain pan above it is overflowing.
• A secondary drain pan under an attic unit with water in it.

The fix is usually a cleaning and service visit. Rust or water damage inside the furnace is the part to have the contractor look at closely. If the condensate line has been draining into a crawl space, see the crawl space moisture page.

Should I ask the seller to replace an old furnace or AC?

It depends on what the report actually says. A seller isn't obligated to give you new equipment because the old equipment is old. A system that's broken or hazardous is different. Here's how I'd approach each:

• Works but old: ask for a cleaning and service by a licensed HVAC contractor with a receipt, and consider asking the seller to pay for a one-year home warranty. Don't spend your strongest ask on new equipment.
• Confirmed safety problem (cracked heat exchanger, venting defect, CO): ask for repair or replacement by a licensed contractor, or a credit based on that contractor's written quote.
• Not working, or an R-22 AC with a leak: a credit or price reduction usually works better than having the seller pick the replacement. You choose the contractor and the equipment.
• Both units near the end of life: this is where a price adjustment can make sense, but only with a real quote behind it.

About home warranties: they're a reasonable ask for older equipment, but read the contract. ConsumerAffairs notes that most providers exclude pre-existing conditions, and known or easily detectable problems are usually denied. You'll also pay a service fee per claim, typically $75 to $125 (ConsumerAffairs, updated September 2026). A warranty covers the next failure, not a problem already on the report.

For how the response works in Indiana, see how the inspection period works.

I'm selling. Should I service or replace the furnace before listing?

Service it, yes. Replace it, usually no. A tune-up and cleaning with a dated sticker on the furnace is inexpensive and it answers the first question a buyer's inspector asks. Keep the invoice and put it on the counter for showings.

Replacing working equipment before you list rarely pays back dollar for dollar. If you already know about a problem, like a heat exchanger a contractor flagged, fix it or disclose it. More on that: what to fix before selling and the Indiana seller's disclosure.