Controversy: Would Ya', Should Ya' Ask For The Money Back

While mulling over the Sunday newspaper today, my wife read to me an article from the serious part of the paper. Personally, I was too busy reading, and looking at photos of, Britney, Lindsay and Paris, to waste my time on the business section. Anyway, the wife had an interesting article which expanded my world perspective.

It was a real estate column by one of the nationally syndicated writers. Someone had written in to him stating that they had purchased a home inspection. The inspector had found mold and other problems so they had walked from their deal. They had gotten the earnest money back from the seller.

Their next questions was this: "Should we ask the seller to reimburse us for the inspection fee?"

The columnist gave them the standard answer, that applies almost always -- "No, just move on and be glad you found out about thousands of dollars worth of damage for a mere $450.00."

That is, almost always the right answer. However, with all the hundreds of years of real estate experience at AR, I am curious if agents or inspectors have experienced situations where the buyer was justified in asking a seller for a reimbursement of the inspection fee.

Personally, I know that occurred after one inspection that I did and I know some questions in that regard were lurking n the background after another one. Here were the two scenarios and both involved failure to disclose on the part of the seller. In other words, the issues I found were things that would have, if reported in the seller's disclosure, immediately discouraged the buyer from submitting an offer. There was no doubt about it, these were deal killers going in.

Specifics:

1. Crawl space structure was dust, fully destroyed by anobiid beetles. No issues citing past pest problems had been disclosed. It was obvious sellers knew as there were signs of recent work, efforts to patch it up, and sellers had lived there for about 30 years. They knew and failed to disclose that the house was falling down.

2. Home was listed as a stick-built house. It was well-disguised but, during the inspection, I found definitive proof that it was a manufactured or mobile home, with additions. Buyer had zero interest in a manufactured home. This was, again, a failure to disclose. However, based on the fact nobody seemed to know this -- even the assessor -- maybe it was not the seller's fault that the information was not disclosed. Regardless, it was a major and significant piece of information that would have immediately turned off this buyer and probably any buyer who wanted a house.

I would be interested to hear your stories. Have those of you, particularly those who work mainly with buyers, ever demanded that the seller reimburse your client for inspection fees as a result of failure to disclose issues that were later found by the inspector? Obviously that would take extenuating circumstances but it seems to me it can be justified. 

Any personal cases that you would be willing to share, from either side of the coin, as a buyer or a seller's agent?

Steven L. Smith

Bellingham WA Home Inspections