Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 2 years ago on . Most recent reply

User Stats

499
Posts
167
Votes
Jane S.
  • Flipper/Rehabber
  • Colorado Springs, CO
167
Votes |
499
Posts

HELP! Buyer dropped out but left damaging inspection report!

Jane S.
  • Flipper/Rehabber
  • Colorado Springs, CO
Posted

I'm selling one of my rentals and received an offer from a buyer along with their inspection report which is full of errors and lists many items as non-functional that ARE functional. I had some minor plumbing needing repair and it will be done today. The original buyer asked for return of earnest money and their agent didn't inform my broker until 3 days later. Meanwhile no one could view the property. I have now taken it off the market temporarily. BUT ...

When I asked my broker NOT to give this erroneous inspection report to a new buyer he says he must turn it over since it's "Material Fact" and he is legally bound to do so as a new buyer has to "know what I know". He says "we can maybe write a short letter to explain my view". A lot of good that will do. Short letter vs. 50 pages of errors??????

I've never seen such a damaging inspection report in the 16 years I've been an active investor! It will kill any sale. It's even hard to read because the captions for the photos dont even match up.

Before I listed it FS, I tried to rent it but none of the applicants could qualify. I had rental offers but their credit scores and financials disqualified them. It's a C neighborhood, but I remodeled the house so it's a B quality. 

I'm stuck with an exclusive license with this broker until the end of the year. I never thought it wouldn't sell within a couple weeks. But many RE folks agree the sellers market here "done got up and went."

The inspection report has the same effect as a big sign on the front of the house that says "DONT BUY THIS PLACE"!

The broker might agree to cancel the listing contract if I pay him I dont know how much. He's gonna discuss it "later today" but I dont know what that means. He's usually vague when it comes to respecting my schedule.

The other possibility is to list it as a flip and just get rid of it to a wholesaler. I dont know if the MLS would allow that!

Most Popular Reply

User Stats

11,752
Posts
13,639
Votes
Bruce Woodruff
#1 Contractors Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
13,639
Votes |
11,752
Posts
Bruce Woodruff
#1 Contractors Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
Replied

@Theresa Harris is correct. The person that paid for the report actually owns it. When they 'shared it' with you, they made you aware of material defects, which you are required to report during the sale. But it should not include aesthetic items or opinions, only actual provable material defects. I do not think you are required to share the report with other prospective buyers, but you must disclose those defects that are actual in the sale contract.

Alleged defects that are not real in your opinion do not need to be disclosed IMO. Maybe a quick call to a RE attorney in your area can provide clarity.

Loading replies...