A heads up on the use of 3-light circuit testers.
Whether you are a home inspector or a real estate agent, you have likely either used or seen used, these common place 3-light testers. They are designed to give the user a quick diagnosis of circuit wiring and can find some of the common defects associated with receptacle outlets.
However, like any tool, the user must understand their limitations.
A common misuse of these testers is relying on the information given by the tester when testing receptacles that have something else plugged into the receptacle at the time of test.
When something else is plugged into the receptacle it can confuse the tester.
In this first picture, the tester tells us the circuit has reversed polarity---time to the electrician!
For example, a washing machine might be incidentally or intentionally grounded but not from the circuit it is plugged into. Being plugged into a three-prong receptacle improperly installed on an ungrounded circuit will feed that ground information to the receptacle and the tester will see that and will interpret the condition as “reversed polarity.”
When the washer is unplugged from the receptacle, the tester will correctly indicate that the circuit is “ungrounded," as can be seen in the second photo.
Understanding this difference is important because it means there is either NO issue (other than you might want to upgrade the older wiring) or an electrician gets called to fix something that isn’t there to fix.
So the person at home needs to make sure the right lights are on.
Charles Buell, Real Estate Inspections in Seattle