Could this be a scam?

[GOPFighter]

When my daughter decided to attend college in a mid-size southern city, she decided she would rather buy a house and pay a mortgage than rent a place off campus. We hoped she might be able to sell it at a slight profit after four years. We helped her with the down payment and she got roommates to help pay the monthly mortgage.

She got her degree this summer and moved back to Maryland where she got a teaching job. She put the house on the market and after a couple of months she finally got a buyer. The buyer put up some earnest money, but the sale was contingent upon a satisfactory house inspection.

After a long wait, the home inspection came back and it was three handwritten pages long with three legitimate problems and about 40 of the most nit-picky items I've ever seen (e.g, "the cement garage floor has spots where water puddles"). So the buyers backed out of the sale, got all of their money back, and now my daughter is required to either fix all these problems before listing it again (at a cost of about $4,000), list it and reveal the inspection to prospective buyers (a sure turn-off), or re-list the house "as is" at a much lower price.

Because of the large number of nit-picky items in the home inspection and the fact that it was handwritten on notebook paper, plus the fact that my daughter is a young seller who obviously doesn't have the means to pay a mortgage on an empty house, I'm wondering if this isn't a scam. A person writes a contract on a house with earnest money contingent on an acceptable house inspection, they then get their brother-in-law to inspect the house knowing they can find enough problems to allow the buyer to back out and get all their money back. They know the seller will most likely re-list the house as-is at a much lower price. Then they get an accomplice to submit a new contract on the house a month or so later for thousands less, knowing the buyer will probably be desperate enough to take a much lower price just to get it of her hands.

This seems to be an easy way to knock the price of a house down easily, especially in a city where the housing market isn't booming.

Am I being particularly paranoid here?

[LynneSin]

1. Could she just rent it out for a bit

and use the money she makes off of rental to help fix these so-called problems.

:shrug:

[skypilot]

2. I'd be suspicious...

...if, in fact, the "inspector" is the potential buyer's brother-in-law.

[nini]

3. notebook paper?

who recommended the inspector?

This whole thing sounds a bit odd to me...

[Kadie]

4. In California

when we sold our house a few years back, when the inspection report came in we fixed some things, and refused to fix others. The inspection report was mostly used as a negotiating tool for the final sales price.

Seems like some of the things listed are just normal wear and tear on a home and not a big issue. Can you hire your own inspector? Maybe you can counter the first report with one of your own.

[mopinko]

5. probably not a scam, but

certainly a crummy realtor to let a deal die over this. she should list it with another realtor, for the same price, but make sure they have a copy of the inspection, so they can be prepared. there is not such thing as a perfect inspection. you should not be able to walk from a contract for such piddly crap. usually, it would just necessitate an adjustment to the price.

[wolfgirl]

6. Have a REAL inspector

come out...cross-checking what they find w/the handwritten document.

Fix what you determine to be legitimite problems, find a new realtor and start over.

[markdd]

7. It's been done before

There could be a sweetheart deal going on here. There is a national organization of inspectors, you may want to contact them and get a professional referral for that area. It may cost as much a $1,000 to get it done yourself, but it might save a lot.

You may have to take a short trip down there to handle the piddly stuff. My last house had a short list of stuff to be fixed, and they wanted me to get a professional to change the f'ing furnace filter ($0.98 at Home Depot).

Good luck

[GOPFighter]

8. 2nd question:

Are home inspectors licensed in most states?

[Wapsie B]

12. No.

That's the one reason there's been such an influx of people wanting to be home inspectors, the lake of regualtions.
From what I can find it's about half the states require licensing and the other half don't.

http://www.hometraining.com/certif.htm

[MsUnderstood]

9. I don't know your laws

But in California, a home inspection is just a chance for a professional to look over the house.

The seller can agree to fix things or say no and the buyer can agree on the seller's decesion or get out of the deal.

She DOES NOT HAVE TO FIX ANYTHING to sell the house again. Is she using a realtor? The realtor should be protecting/advocating for her agains this if it is a scam.

[TNDemo]

10. Usually each buyer gets their own inspector.

I had my house up a few years ago and had a contract. They had an inspector come. Ultimately their financing fell through and we got another contract and they had their inspector come (a different one). Whoever pays for the inspector owns the report so the next buyer should not have access to it. Each inspector found completely different things - and the ones we thought they would find. Just put it back on the market and see what the next contract brings. However, if there are legitimate things you may need to fix those. When the inspection report comes back, you can agree to fix certain things and refuse others. May have to dicker a little with the price but maybe not.

[tjwash]

11. Been there done that, as a buyer and a seller.

Only three pages? Damn, that inspector must have flown through that place.

She should be working with a Realtor in the first place, it is because of these situations, that they are worth the commission. Out here in CA it is pretty much required to have a building inspector go through properties on the market. First of all let me tell you, nothing will let you feel like your property is worthless than having a building inspector go through it. As a buyer, I will try to get them to fix everything, and as a seller who has gotten those pages from the inspector, I don't want to fix a DAMN thing.

There are certain required items from that will need to be fixed by law to sell the property, but you are under no obligation to fix everything the inspector has on his list. As with all things, negotiate. Anything critical, like a plumbing leak, or an electrical problem, get it fixed. Little nit picky things, don't worry about. If they persist in wanting everything fixed, explain to them you are selling a house, not renting them an apartment, and pull even the repairs you originally promised off the table. You will only fix the required by law items, and nothing else. I have had to do just that in the past, and believe me, another buyer will be around soon.

Hey, houses fall out of escrow for a myriad of reasons, but that is part of the work you do on your investment. Stay your ground, and don't get pushed around by these people. Good luck!! :hi:

[GOPFighter]

15. She has a realtor, but ....

...this is not a big house so the realtor won't get a big commission. Plus we don't know much about the realtor. I hate to be paranoid, but I suspect there are places where collusion between realtors and: inspectors, title insurance co., lenders, etc. and in collusion, especially when the seller is moving out of the area and there is little chance of being caught.

[tjwash]

Remember that...

...the Realtor is there as her representative to the buyer. The actual negotiations are on the sellers shoulders, through the Realtor. IOW the Realtor is there to give advice, HOWEVER, they must do exactly what their client wants to, bottom line.

Any licensed Realtor will give you EVERYTHING in writing, to avoid the suspicion of collusion, from the initial offers, to requests for repairs. Always review and save the paperwork, and read it several times.

Actually I don't think this is a scam. This sounds like the normal wheeling and dealing that is done when properties are moved. I have had places fall out of escrow before, and for stranger reasons than repairs. I was a week away from having a loan fund on a condo I was selling, and the buyer, an African-American single father, pulled out at the last minute because someone shouted a racial slur at him from their car driving down the street.

It's a pain, but, if managing property was easy, everyone could do it...

[eyesroll]

13. Not sure what state you're in, but I don't think you have

to disclose everything the inspector finds, especially cosmetic and small maintenance-type stuff.

Yes, if the inspector finds the roof is improperly installed or the electrical's shot, you have to put that.

But water spots on the floor, I'd think, are cosmetic rather than structural. (Correct me if I'm wrong.) So are things like burned-out bulbs, dead batteries, ugly wallpaper, fading/peeling paint (unless it's lead) and aging systems. (You don't need to list "plumbing is old" on the inspection form, unless it's so old it's falling apart or it's not up to code.)

Fix the three legitimate problems and talk to the realtor if you have one about what you're legally required to disclose.

[GOPisEvil]

14. The inspector should be licensed and have that information

on the report.

As for me, my inspector found lots of stuff wrong with my house too, but nothing major. I used his information to extract a repair allowance from the seller and used that to fix a few things.

Of course, my inspector provided a computer-generated report with digital pictures and a narrative. He posted it on his website and gave me a password to view it. I shared that with the seller and we agreed on the repair allowance.

If I were your daughter, I would note the major repair items needed on the seller's disclosure, and possibly bargain on the price a little. Shouldn't her realtor be giving her this advice?

[GOPFighter]

16. Yup!

I don't think her realtor is working very hard on this sale. Plus we don't know much about Tennessee laws governing the selling of houses. It does seem like the realtor should have tried to negotiate the selling price. Maybe she did and the buyers declined to negotiate.

[bearfan454]

17. It's a scam.

The inspector will have stationary with the company name on it. Try a different real estate agency.