It sounds like typical problems for a house this age. The panel ground should have been caught during the permit inspection when it was replaced, but maybe they were just careless. Splices inside the panel box should be allowed if done properly to extend wires. Improperly grounded outlets are very also common, but there are options for how to fix them.

We bought a house about 4 years ago that had similar wiring issues. Most of the receptacles were grounded through the metal shielding on the 1940 vintage wiring, which is not considered an acceptable ground (FYI - the old metal cable looks like current BX cable, but is not the same). However, we only had seven circuits for the entire house, so it also needed a lot of additional wiring to be fully habitable.

I can't really give you a cost estimate, since most of our changes were embedded in bigger projects. However, working on old houses is time-consuming, and that means you will pay quite a bit for electricians and other contractors. In many cases it will be cheaper to completely open up walls and fix everything, although I cringe at the thought of ripping out vintage plaster and moldings just because its easier and cheaper for the contractor.

In most cases I did not try to ground the existing receptacles,but just added new 12 gauge wiring and receptacles wherever needed. I first had an electrician upgrade the panel to 200 amp, and treated the wiring of each floor a little differently (explained below).

2nd floor - We ran four 12/3 cables from the basement up to the attic, using the chase around the main plumbing stack as a path to the attic. One 12/3 cable was used as a 240 volt circuit for a new A/C air handler in the attic, number two was wired as a MWBC and used for the bath GFCI and a new bath heater/fan, number 3 was used to connect to A/C powered smoke detectors on the 2nd floor, and number 4 was wired as an MWBC to provide two 20 amp circuits to serve wall receptacles in the three bedrooms.

1st floor - I disconnected and stripped out all existing wiring I could see from the basement, and replaced it with new 12/2 to the panel. Its time consuming, but not really difficult if you have access from the basement. This grounded the receptacles on the 1st floor, but I had to leave some of the old cable in the walls that ran to the ceiling lights on the 1st floor. During our kitchen renovation the contractor opened up the walls and ran all new circuits for the kitchen, so that area was completely rewired.

Basement - since all basement walls were open/unfinished, we replaced existing wiring with new 12/2 and added GFCI's where required for the laundry room and utility area.

The new breaker panel, kitchen renovation and the basement wiring upgrades were permitted and everything passed without any issues.

Bruce

Splices in the panel are not wrong. Perhaps sloppy, but not barred by code. Use of grounded outlets when no ground is present isn't kosher at all (and unsafe). You can get away with it if you protect these receptacles with GFCI (and mark them appropriately). I have no idea what you mean by "ground box" (correct or otherwise).

Cost to rewire is going to vary widely based on your exact location and how accessible things are (attics, basements). Get multiple bids and references (preferably from people you trust).

Most home inspectors are absolute idiots when it comes to anything technical. With concerns like these, I'd have a licensed electrician come in and do a proper evaluation.

Whoops meant sub panel.Here's a couple of the remarks. Luckily we have a good electrician but can not get a hold of him for a few days.

" The basement sub panel is not properly wired as a sub panel with all neutrals and grounds separated and ground bar bonded to the box"

"Numerous un grounded 3 prong outlets and outlets wired with reversed polarity were observed throughout the building."

"Neutrals spliced into grounds and hot wires were observed in the main panel box."

These seemed like the biggest issues with the electrical. There was a lot of smaller things but these bothered me the most. Thanks for all of your opinions. We are kinda just taking the plunge without looking on this one but hoping for the best!

"Numerous un grounded 3 prong outlets and outlets wired with reversed polarity were observed throughout the building."

This means that his stupid plug tester told him that but he didn't follow up to figure out what was really wrong. The conclusion may be completely wrong, but bears looking into.

"Neutrals spliced into grounds and hot wires were observed in the main panel box."

This is non-sensical. Again, wires are allowed to be spliced in the panel (main or otherwise). Connecting either a neutral or ground to a hot wire is going to be readily apparent (either the breaker is going to trip or the wire is going to burn up).

Get your trustworthy electrician to come in and find out what the situation really is. If you still have questions after that, write back.

" The basement sub panel is not properly wired as a sub panel with all neutrals and grounds separated and ground bar bonded to the box"

Not very hard to fix as long as the sub-panel feeder cable has two hot (ungrounded) conductors, a neutral (grounded conductor), AND a ground (grounding) conductor.

"Numerous un grounded 3 prong outlets and outlets wired with reversed polarity were observed throughout the building."

NEC 406.3 (D)

http://freenec.com/T235.html

(3) Non–Grounding-Type Receptacles. Where attachment to an equipment grounding conductor does not exist in the receptacle enclosure, the installation shall comply with (D)(3)(a), (D)(3)(b), or (D)(3)(c).

(a) A non–grounding-type receptacle(s) shall be permitted to be replaced with another non–grounding-type receptacle(s).

(b) A non–grounding-type receptacle(s) shall be permitted to be replaced with a ground-fault circuit interruptertype of receptacle(s). These receptacles shall be marked "No Equipment Ground." An equipment grounding conductor shall not be connected from the ground-fault circuitinterrupter-type receptacle to any outlet supplied from the ground-fault circuit-interrupter receptacle.

(c) A non–grounding-type receptacle(s) shall be permitted to be replaced with a grounding-type receptacle(s) where supplied through a ground-fault circuit interrupter. Grounding-type receptacles supplied through the groundfault circuit interrupter shall be marked "GFCI Protected" and "No Equipment Ground." An equipment grounding conductor shall not be connected between the grounding type receptacles.

"Neutrals spliced into grounds and hot wires were observed in the main panel box."

Splicing is not a problem if done properly. "Neutrals spliced into grounds" sounds odd. Neutrals and grounds are supposed to be bonded together at the main panel, but splicing the neutral and ground together before they terminate in the ground bar would be wrong because there would be a chance of too much current for the wire size. This can probably be fixed easy enough with a longer or additional ground or neutral bar.

Is this a home you are considering but have not yet bought, or have already bought?

We have not yet bought it. We just got the inspection report back and supposed to close at the end of September. Luckily we talked to our trusted electrician and he is heading over to the house this afternoon. Hopefully it won't be too bad because their are a lot of other issues on the inspection report.