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I Don't Want to Hear It - It Will 'Kill the Deal'...

Every now and then I get a call from a mortgage company to go out and re-evaluate an issue that that an appraiser found while nashville tn home inspections

doing a re-fi. Yesterday was one of those days. It seems that because of the 'mortgage meltdown' lenders are scrutinizing issues that were not so important a few years back. It seemed as if everyone from the lender, the mortgage broker and the home owner were freaking out over an area of mold, the size of a softball. I was called out to verify that the area was 'cleaned up' and there was no mold present.

What I found was an area of the basement that that had been painted out with a 'water proofing' paint that was allowing water to seep through, a major structural failure in the foundation wall, failed drains in the window wells, poor yard grading and more. But no mold... (it had been bleached out of existence) but then that is fodder for another blog.

I called the broker to tell them that there were major nashville tn home inspections; nashville tn home inspectors

structural failures and other issues that were compromising the structural integrity of the property and that I was surprised that the appraiser did not comment on these. The brokers response floored me...

"Is there any mold present? That is ALL we want to know. The rest of the issues are between you and the home owner. Any thing more than that will 'Kill our Deal'."

So where does that leave me? Am the the one who needs to reveal the real truth about the actual condition of this property and be the 'Transaction Assassin'? What ever happened to truth in lending or are they just meaningless words. Is it really ALL about the money? I hope not. Needless to say, I feel bad for the home owner as I did what my conscience guided me to do. And, that was, "Do the right thing." I called the home owner and told them what I really observed and gave him the names of contractors that could resolve these issues.

Even though this was not what the home owner wanted to hear, they were grateful for my honesty and help. I slept well last night...

Wishing all my fellow drips and tweeps a G-r-r-r-reat day... 8-)

If you or someone you know is purchasing a home in Brentwood, Franklin, Nashville, Spring Hill or Thompson's Station in the Davidson or Williamson county area of Middle Tennessee and would like more information about getting a home inspection, give us a call at 615.661.0297. You can visit us online at www.completehomeinspectionsonline.com - Check out our monthly newletter

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Posted by Michael Thornton - Nashville, TN area Home Inspector on 04/02/2009 06:54 AM

Comments (65)

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Originally posted at: Michael's View: I Don't Want to Hear It - It Will 'Kill the Deal'...

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65 Comments on I Don't Want to Hear It - It Will 'Kill the Deal'...

APR

Great job. . .preventing a future liabilty for you and many others. .

I'm not sure why this would kill the deal as it can be repaired and the drainage corrected. Tell the sellers to duct off the checkbook MR Broker. Honesty and integrity above all!

Michael, some real estate agents and mortgage people only care about their paycheck not about the client

Michael...

In Georgia ...once the broker had actual knowledge of the defect, there was an obligation to disclose. Deal, or know deal, it has to be done.

Unfortunatly what Russ said above is true. When you make a living off of commissions some will do whatever it takes to get the paycheck. By doing the right thing you have made all of us home inspectors proud. Great job!!!

Mike, If the "condition of the house" kills the deal, so be it. Rich

Basement conditions and water ANYWHERE ought to be a homeowner HEADS UP...Too often the commission is all that drives the transaction...condition before commission ought to be the rule.

Richard, You knew the right thing to do and did it. But very disturbing comments by the mortgage broker.

You're surprised?

ToulaRosebrock.com Hi Michael:

It's all about doing the right thing.

I guess we all come across this, one time or another...

Richard, the appraiser found the issue, they called you, you found more than the appraiser did?

Gee not sure what to think about this but you did the right thing, since this was a refinance hopefully the homeowners can get this repaired. We deal with cracks in basements all the time up here, regrading solves most of it. Sometimes some support beams do and that can be expensive.

Hi Michael

The best policy is to do what right, and to be honest.

Good luck and success

Lou Ludwig

Good post. And you are right about lenders. We did a sale where the property was abandoned and the gas tank outside had been removed. We had to have an inspector come in with a Gas cannister, hand held and make sure all the heaters worked before the folks got the loan

You did the right thing and you can sleep at night. That is what counts.

I think that there may more to this than just the mold issue.

Since the issue was the presence or lack thereof of mold, seems to me that the mold issue is what the lender wanted addressed.

The lender quite simply may not have requested info about structural matters because they had

already been addressed

value had been adjusted accordingly

was following up on mold mitigation orders.

The mold matter is an entirely separate issue from the structural issues, although clearly the structural issues and moisture intrusion no doubt led to the mold issue in the first place, but without a complete history, may not have been pertinent to what the lender was seeking.

Michael, So many of our Southern friends in activerain have homes that are on a concrete slab, but many of us northerners have basements and if they were built with cinder-blocks you are going to have some water period. This photo is a known defect that is more than some seasonal wetness, kill the deal until repaired properly.

I think we all must report ALL the facts that are found. What somone, lender, seller, buyer, does with those facts is their job, not mine, I report the facts. You did it correctly in my opinion. At least your report will show you did report all known facts. and you can sleep well knowing you did a great job. A person who reports the facts is not guilty of killing ANY deal, the facts kill the deal if that happens.

Great post and I am so with Lou, honesty is the best policy and when it kills the deal it kills the deal.

You did what you thought you needed to do. The buyers appreciated it, I'm sure. The real estate agent, if she referred you, will get a thank you from the buyers for suggesting your service. The other side of the coin is that the agent may not use you again - do you care? You were in a tough spot!

Michael, congratulations on doing the right thing. I think when people feel desperate either for business, income, etc. they lose focus and need that back up reinforcement even if it does kill it for now. It won't come back to bite even harder at a later date.

Michael, you should be commended for doing the right thing. Regardless of whether or not it "killed the deal" at least you know you can sleep well knowing you did the right by the home owner. As far as the bank and the agent goes....well, like you said, that's fodder for another blog.

Personally, I would rather an inspector killed a deal than have my buyers get into something that will eventually become a problem for the down the road.

You received a featured post for this blog and it is WELL deserved!

Good job my friend!

Michael,

I'm glad to see this was featured! You did the right thing. Now go sign up to attend a Tea Party on the 15th! :) (Another "right thing.")

Mike in Tucson

It amazes me the head in the sand people we come up against. The appraiser probably missed what your sharp trained eyes discovered. Keep up the great work!

Michael, you just have to love long horizontal, open cracks in CMU----PLUS water-----ouch.

Michael, Sometimes doing the right thing is not popular but I'm glad there are still many who do the right thing even if it hurts. You very well may have saved a homeowner much grief down the road. Good for you.

Michael - all you can do is what you know to be the right thing. Whether representing a buyer or seller, I do like a thorough and objective inspection.

Great post as always Mike!

I have pondered the issue of inspections and how they should be important to lenders. The lender uses the property as collateral, so wouldn't they want sound collateral? Also, a home that has many issues may put a financial strain on the buyer, which is the lender's borrower.

Amazing what can be found.

All a home inspector can do is point it out.

Home inspectors don't kill deals, houses do.

Don't shoot the messenger.

Great post! It was the right thing to do. I'm disappointed at the other members of the transaction. Shame on them!

I have noticed in 20 years of real estate that there is a hostility netween Realtors and inspectors way too often. There are bad inpsectors just like there are bad Realtors, and bad in any business. I would prefer an inspector like you, that is fair, honest, and tells me what I need to know to avoid liability, and the buyer who you represent. I haven't run up against refi issues, but although I can't specify only one inspector to choose, I have a recommended list of inspectors who are experienced, detailed, and not ego-centric that makes the transaction all about them. Wish you were in Oklahoma City.

Hi Michael, You certainly did do the right thing. Well done. I also believe that once the " material " condition was known to the agent it must be fully disclosed !

The right thing to do usually isnt the easiest, good job sticking with your conscious.

Michael,

With a falling market, some buyers came be really creative looking for an exit.

Wouldnt the buyer notice it and have a probably with the structural issues?

You did the only thing you could and should have done. The fact that a mortgage broker wanted to brush in under the rug so to speak is so shocking to me that I have no words. And me, having no words is not an easy thing to do.

Amazing. I think I would WANT structural issues to kill the deal, don't you? It would be nice if the mortgage companies were scrutinized like the homes...

If a material fact can indeed kill the deal then all sides privy to the transaction should be made aware of the new information. I don't see any gray area here.

Mold is a big issue in South Florida. In my opinion, once a mold issue has been recgonized, it should be rectified immediately. In the case with mold on the wall, by simply cutting the area off and replacing with new sheetrock should be no more problems. I think that the appraiser made a big issue over the material facts of the presence of mold although he was doing his job, of course, to disclose the issue however we as Realtors need to be ready when structural home problems arise to help the buyer or homeowner ease these issues and worries.

I think that home inspectors have the same requirements that appraisers should have: accuracy, objectivity, and integrity. If any of these are missing, what good is the home inspection or appraisal. I'm wrestling with this very issue in my post today, as it relates to appraisers.

Michael, being there, done that. Hear you loud and clear. Great post.

~ Life is Good

Do what you think is right for all parties concerned and will let you sleep at night.

No debate necessary: Choose the harder right over the easier wrong.

I do like the phrase "transaction assassin". Do you have that trademarked?

Reminds me of some of tenants of Rotary, "Will it be beneficial to all concerned?", "Will it build goodwill and better friendships". Integrity allows benefits you. Glad you rested well.

Mold has become a real issue in the last few years, some states requring mold disclosures to be filled out by the seller at the time they list the home. I have seen mold that is easily remedied & then I've seen mold that was very complicated to get rid of- determining the source of the mold & addressing it properly is key in a small or large remediation.

Michael, Good Post and Good Job - like I tell my kids "I can look myself in the mirror!"

Thanks, Kathy

Glad you had a great nights sleep. If only everyone was that ethical. I use the mirror test. If I can look in the mirror and be proud of who I see then I am happy. Customers and clients come and go but I have to look at that person in the mirror everyday.

I say follow the "Golden Rule" and tell them what you would want to know. Plus, here you would need to disclose any material fact.

Disclose! Disclose! Disclose! That is our motto around our office. What were those people thinking....about theie paycheck I'm sure. That is the scenario of somebody who may not be in the business long term.....don't ya think? Trust, honesty and integrity are earned.

I could go on about the other subject that I just commented on Richard's bored post......but I've got to get back to work. These 'times' seem to be bringing the worst out in the bad practioners.

Michael - I am not surprised to hear that you did the right thing here. You clearly have integrity, and it shows.

I guess I'll have to side with Lenn Harley (when don't I?) and ask what the scope of your assignment was. It appears that you were hired by the lender to address the mold remediation only. Your opinion about the appraiser's inspection doesn't seem to be within the scope of your assignment.

Michael: You did the RIGHT thing.. Home Inspectors are there to tell what the TRUE condition of the property. Sleep well my friend

Congratulations on the feature. It was a good blog and the deal was probably killed but you did what was right.

I must not have understood the article becuase I'm not sure why telling the homeowner about the issue would kill a re-fi deal. The lender was concerned with mold. There was none. Your additional findings should have been reported to the homeowner just like you did. What is the issue?

Hi Michael -- Congrats on doing the right thing. When one does the right thing, one never has to worry. I'm still amazed at the stupidity of lenders.

Arghhhhh - I would hate to see an unsuspecting buyer get stuck with broken basement walls...when it's time to resell, then reality hits. I'm facing that now with sellers all the time. Someone herded them through a sale without looking out for their interests. Good job Michael.

APR

Great post Michael. This really shows you how ethics can come into question when it comes to the bottomline of various brokers making their money. I understand things are tough, but even when things were better such unscrupulous actions still existed. Kudos to you for standing your ground and those things should not be a deal killer. They are just issues that need to be addressed and then the refi can continue should the client choose to.

Sincerely,

Bilal Qizilbash

Sincerely,

Bilal Qizilbash

Michael,

I'm with you , better to tell the facts..it is what it is and then it can be dealth with fairly and honestly!

Sometimes helping people means doing something that might not be in the job description.

Michael I am proud to be your friend. It is so much easier to go with the flow but you stood up for the right thing and hopefully this homeowner will find a way to repair the issues and get the mortgage refinanced on a home that won't be hurting them. The mold would be back and the foundation could deteriorate so much as to be unsafe after a while.

As an aside regarding appraisers -

Is it my imagination or are the bank's appraisals coming in real low on normal sales but real high on short sales?

Michael - You reported what you found. If that's all the lender needed, that's the way it is. I also feel like the whole story should be told, not just the part that people wamt to hear. Our current government seems to be in the partial story mode, and it's really pissing me off.

APR

Michael, It was good of you to report all that you found to the home owners, since they are refinancing they obviously intend to stay and should know what defects need to be addressed. I have a hard time believing that the owner or contractor that did the waterproofing were not aware of this issue.

I think the mortgage broker was a bit misguided and it is good your better judgment prevailed and you reported what you found to the home owners.

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