The former Hole singer, who looked around Kate's north London property once before, backed out of plans to purchase the mansion after a second inspection left her "horrified".
Courtney is said to have told friends the three-bedroom house wasn't worth the £3.5 million price tag because it is in such poor condition.
One pal told Britain's Sunday Mirror newspaper: "Courtney had a viewing and wasn't convinced, but Kate persuaded her to take a second look. That was when Courtney noticed the house was in a state - with scratched floors and old-looking plug sockets. She said it was a mess and she would need to clean it up.