A potential buyer might want everything to current code as a negotiating point but you don't have to change anything, just move on to the next buyer.
I held a Wisconsin real estate brokers license from 1973 to about 2005, spent 35 years in the mortgage business and watched 10's of thousands of home sales go by.
Most people, including myself until I found this Forum, don't really understand what "code compliance" really is. For new construction or substantial rehab ... its probably pretty straightforward and easier (note "easier" and not "easy") to understand.
But for an existing house ... many things are "grandfathered" back to when the house was built or to when certain changes were made. Some municipalities codify the NEC for example ... some municipalities go beyond it ... and some (albeit smaller municipalities) are silent.
So when a buyer or RE agent says "we'd like to ascertain that the house is code compliant" ... most of the time I don't think they know what they mean or are asking for.
If the house was built in the 1910's, has a 30 amp electrical service, had a gravity feed furnace in the basement, lead water pipes, is service by a sand point well, and no one really knows where the waste plumbing goes ... making it "code compliant" probably isn't a bad idea.
But if the house was built in the 1950s and 1960s "code compliance" probably isn't necessary ... other than to try to ascertain the house was "code compliant" when it was built.
Basically, I'm curious if there was any truth to my realtor's claim that a home inspection report has to go on the sellers disclosure?
This will likely vary from state to state. There could be case law, statutory law, or RE licensing agency regulations that mandates any and all inspections (regardless of who they were performed by, regardless of how valid they were) must be disclosed to potential buyers.
Or the state could be silent on the matter.
This is a darned if you do and darned if you don't.
If there is an erroneous, poorly done home inspection that isn't disclosed to a buyer and nothing happens ... no harm no foul. But even if the home inspection was junk and something happened, any good attorney will use the undisclosed inspection as leverage.
So where does this leave us. A poorly done home inspection with alleged erroneous problems and non-existent code "violations" could taint the subsequent sale of the house down the road. Which I believe is wrong.
If I were counselling a mortgage applicant about these issues I would try to put the buyers in a frame of mind to want things to be adequate and typical for the market without being substandard or putting their family at risk. For a modest sized house with gas heat, gas water heater, gas dryer, and limited electrical appliances .... 100amp should be fine ... in spite of "Uncle Harry" declaring they should NOT buy a house with less than 200amp service. Obviously extension codes for wiring and garden house for water supply lines are NOT acceptable under any circumstances.