Three-prong outlets with no ground, old two-prong outlets, and hot and neutral swapped are common electrical notes on older houses. They're real shock hazards, but the fixes are usually small, and one of them is a cheap GFCI the code specifically allows.
I'm Wes Johnston, a Realtor with Trueblood Real Estate in Fishers. Before real estate I earned a construction engineering management degree from Purdue and spent about ten years designing custom homes and running their construction in Hamilton County. I'm not a home inspector, electrician, plumber or engineer, and this isn't a substitute for one. It's how I explain these findings to my own clients. Sources are linked as you go.
Short answer: an open ground or reversed polarity is a real shock-safety item but usually an inexpensive repair. The code allows a GFCI, labeled "No Equipment Ground," as the fix for an outlet with no ground wire. Reversed polarity has to be traced and corrected by an electrician. Ask for the repair or a modest credit.
Cost source: HomeAdvisor GFCI cost guide and HomeAdvisor electrician cost guide, both updated June 2026, national figures
An open ground is a three-prong outlet whose round ground hole isn't connected to anything. The outlet works, so you'd never know. The inspector finds it with a plug-in tester, which lights up "open ground."
It usually happens one of two ways. Somebody replaced old two-prong outlets with three-prong ones so modern plugs would fit, without any ground wire in the box. Or the ground wire is there but came loose or was never connected. The first is far more common in older houses.
Typical report wording:
The ground wire gives a fault in an appliance with a metal case somewhere safe to go, so the breaker trips instead of the case becoming live. Without it, a fault can sit on the case until someone touches it.
An honest two-prong outlet isn't hiding anything. You can see it has no ground, and you know a three-prong plug doesn't belong there. The bigger problem is the three-prong outlet with no ground, because it looks protected and isn't. Surge protectors and some electronics also count on that ground to work as designed.
Older wiring systems like knob-and-tube never had a ground wire at all, so they can't properly serve three-prong appliances (InterNACHI). If your report mentions knob-and-tube, read the knob-and-tube wiring page too. Aluminum branch wiring is a separate finding with its own fixes; see the aluminum wiring page.
Yes, and it's a common fix. The National Electrical Code (406.4(D)(2)) gives three choices where there's no ground wire in the box (Mike Holt in EC&M):
A GFCI watches for current leaking where it shouldn't, through a person for example, and cuts power. It doesn't need a ground wire to do that, which is why the code allows it here. It doesn't create a ground, though. That's what the "No Equipment Ground" sticker is for: a surge protector or a computer power supply still won't have a ground path.
One limit: that permission covers replacing existing outlets. Adding a new outlet from an ungrounded box is an extension, and the new outlet needs a real ground connection (same source). For how GFCIs work and why one might not reset, see the GFCI page.
Reversed polarity means the hot and neutral wires are swapped, at the outlet or somewhere before it. The outlet works and everything plugged into it works, which is why it goes unnoticed (Structure Tech Home Inspections, June 2021).
It matters because appliances are designed with the switch on the hot side. Swap the wires and two things change. A switched-off appliance like a toaster still has live parts inside. And the metal shell of a lamp socket, which is supposed to be neutral, becomes live. Both are shock hazards (same source).
The fix is an electrician, and it's usually simple. But swapping the two wires at the outlet isn't always the right repair, because the mistake may be upstream. The electrician should trace it (same source). A plug-in tester can only confirm polarity on a properly grounded outlet, so after the ground is fixed, retest.
A bootleg (false) ground is a jumper from the outlet's ground screw to its neutral. Someone does it to make a plug-in tester show "correct" on an outlet with no ground wire. It works on the tester, which is the problem: a three-light tester can't tell it from a real ground (Mike Sokol in EC&M, 2013).
It's worse than an open ground. It puts the neutral, which carries current, onto the metal case of whatever you plug in. If the outlet also has reversed polarity, the hot wire ends up on the case, a potentially deadly shock that a GFCI downstream may not catch (same source).
Inspectors who look for these use a voltage tester or meter, not just the plug-in tester. If your report mentions a bootleg ground, assume there are more than one and have the electrician check every outlet that tests "correct" on ungrounded wiring.
When I look at a report and see three-prong outlets in a 1950s or 1960s ranch with no mention of grounding, I ask whether the inspector checked for open or bootleg grounds. In a house wired before grounded outlets were standard, it's common for someone to have swapped in three-prong outlets along the way. On new construction, every receptacle box gets a ground wire, and the local inspector sees it at rough-in before drywall. In an older house, you can't see behind the cover plate, so the test is all you have.
I tell buyers this is a whole-house question, not an outlet-by-outlet one. One electrician visit can sort which outlets get GFCIs, which go back to two-prong, and which rooms are worth running new grounded wiring to.
It depends which fix you choose:
| Fix | Typical cost (national) | Source |
|---|---|---|
| GFCI outlet installed by an electrician | $130 to $300, about $210 average | HomeAdvisor, updated June 2026 |
| Replace an existing outlet | $100 to $200 | HomeAdvisor, updated June 2026 |
| Install an outlet | $200 to $300 | HomeAdvisor, updated June 2026 |
| Electrician's minimum visit charge | $100 to $200 | HomeAdvisor, updated June 2026 |
| Rewire a whole house with grounded wiring | $6 to $10 per sq. ft., or $12,000 to $20,000 | HomeAdvisor, updated June 2026 |
Reversed polarity is usually a correction at one or two outlets and fits inside a service call. Open grounds are where the choices matter. One GFCI at the first outlet on a circuit can protect the outlets after it, so a few GFCIs can cover a lot of outlets. Running new grounded wiring is the bigger job, and usually only worth it in kitchens, baths, or rooms you're already remodeling.
Reversed polarity and bootleg grounds: yes, always. They're hidden shock hazards and the fix is small. Open grounds: yes, ask for the code-allowed fix, not a rewire.
Whoever does the work, check their credentials locally. There's no statewide electrician license in Indiana; cities and counties handle it, and Indianapolis issues electrical contractor licenses through its Department of Business and Neighborhood Services (City of Indianapolis, Contractor Licenses, read October 2026). Get the license number on the invoice, and keep the invoice with your closing papers. See how the inspection period works in Indiana for timing.
Yes. A plug-in tester costs an inspector almost nothing and they'll test outlets in every room. Have an electrician correct polarity, remove any bootleg grounds, and add GFCI protection with the right labels on ungrounded three-prong outlets. It's a modest bill that removes several report lines at once. Keep the invoice.
More on what's worth doing before you list: what to fix before selling. If you know about electrical problems, they go on the Indiana seller's disclosure.
A home inspection report runs dozens of pages, and almost every item ends with "recommend evaluation by a qualified professional." That wording is there for the inspector's protection. It doesn't tell you which items are a quick fix and which ones change the deal.
I spent about ten years designing houses and running their construction before I sold them. When my clients get their report, we go through it together and sort it into what to ask for, what to take as a credit, what to just fix yourself later, and what needs a specialist before the inspection deadline. If you're buying or selling in central Indiana, I'm happy to do the same for you.
Construction engineer turned Realtor. Straight answers before you sign.
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General guidance from a Realtor with a construction background. Hire the licensed trade for the diagnosis and the fix.
General information from a Realtor with a construction background, not electrical or legal advice. Cost ranges are national figures from HomeAdvisor (updated June 2026); Indianapolis-area quotes vary. Code references are from published explanations of the National Electrical Code; check the edition your city or county enforces. Have a licensed electrician evaluate and repair outlet wiring.