Two-prong outlets with no ground wires were common throughout Seattle until 1963. From that time on, grounded three-prong outlets have been the standard. Two-prong outlets are rather inconvenient, and can possibly pose a safety hazard. The third prong on a plug is designed to give a fault path in the event the hot wire, or device that is connected to should short out. The absence of a ground path can lead to an electrical shock. For example, a metal light fixture could become energized on its exterior, and the lack of grounding will not allow the breaker to trip. The problem is that you can't necessarily just replace them with a three-prong plug. If the wiring system is not bonded to the ground, then that would be an illegal fix. In some cases, the wiring is grounded and they just didn't put three-prong plugs, because back when three-prong outlets were introduced they were more expensive. In many cases, there is no wire or other grounding path. Older two-wire clothe wiring is not uncommon in houses 60 years old or so. It is likely that your old two-prong plug is so loose that cords fall right out of it, or it is brittle and cracking. Either way, it should be replaced. At this point, you have two choices that are legal. Replace it with a new two-prong receptacle is one. The other is to replace it with a three-prong plug, but only after verifying that you have a ground path.
However, to provide accurate disclosure to buyers, you should have the system checked by a licensed electrician. Working on any electricity in the State of Washington requires a permit. Regardless of whether the outlets are grounded or are wired in conduit, you are not required as a seller to upgrade the wiring. Your essential obligation is to accurately disclose your knowledge of the electrical system to buyers. And this leads to your question about whether the outlets “will be a problem when buyers hire a home inspector.” Problems you already know about should not be left for some home inspector to discover, while you hold your breath in suspense. If you disclose the problem up front, it can become an as-is part of the sale. If the home inspector reveals it to the buyers, it can become an expensive subject of negotiation. Worse still, the buyers could hire an incompetent home inspector who says nothing about the problem. If the buyers were then to learn about it after the close of escrow, you could have a sticky liability issue on your hands. The best approach when selling a home is to disclose everything you know. Don’t wait to see what the buyer's home inspector discloses. This is the best way to have a clean, smooth transaction, without repercussions after the sale is completed. If you have the outlets and wiring evaluated by a qualified electrician, you may find that the outlets can be grounded at a nominal expense. Then there will be no outlet problem to disclose and no need to sweat the home inspection.
Knob and Tube Wiring - The EMF issue
The most important issue to many of our inspection clients, who are concerned with magnetic fields is the fact that Knob and Tube wiring emits high and far-reaching low-frequency AC (Alternating Current) magnetic fields. The separation of the “hot” and “neutral” conductors by as much as 12-15 inches causes a significant increase in the magnetic field around the wiring. Although the health effects of high AC magnetic fields are in dispute, many people are concerned about them and prefer to create a low magnetic field environment in their homes and especially in their sleeping areas.
The knob and tube also do not shield against Electric Fields induced by the wiring.
If you have a home built before 1965 it is a good idea to have your wiring inspected. Has it been updated? With what type of wire? Was ALL the Knob and Tube removed, or was the modern wiring just spliced in?
Do you still have a fuse box? Or has your service been upgraded with circuit breakers? Upgrading to circuit breakers is safer and much more convenient especially when a circuit overloads and trips a breaker rather than blows a fuse.
PNWIG highly recommends that any and all Knob and Tube be removed and replaced with modern wiring. Many times modern wiring is installed but the legacy Knob and Tube is disconnected but left in place, to save a few bucks. It does take a little extra effort to remove the old Knob and Tube wiring. If the older wiring is not removed it can be confusing to a future electrician and some of it may still be active. During our inspections, we have found some of it to still be active and live a definite fire and electrocution hazard. Fortunately, always assume all wires are live and test any wire before working on ANY wiring.
Fully removing and replacing your old Knob and Tube can be difficult and expensive but is easier if you have an accessible attic and crawl space. We assure you the benefits are well worth it, and it should add to the value of your home, as well as add to your electrical safety and capacity.