Inspectors killed my deal -- 3 times, Any advice?

[Ruth Lyons]

Hi friends,

I rehabbed/renovated a single family home in Baltimore County. It was supposed to be my first fix and flip after getting 4 buy and holds finished. But I'm frustrated and just put it on the market for rent. I was unprepared for the havoc inspectors can cause. Here's what happened. 

I got a contract in March and the buyer hired an inspector who noted that "what looks like, could possibly be, not sure, but it might be asbestos insulation in the crawl space." I offered to have all the suspect insulation removed and proceeded to do so but the buyer backed out anyway, spooked by the word "asbestos" which isn't even a health threat unless it's disturbed and it was in the crawl space, not a livable area of the home.

Next contract, the inspector brought the code book and proceeded to list numerous nit-picky issues that were totally different (apparently missed?) from the first inspector's list. Said there might be mold in the crawl space. Again, I proceeded to move forward with mold remediation only to have that buyer back out because "mold is scary."

Finally, another offer and another nit-picky list of non consequential stuff to fix (including a small tear in a window screen and a front step that had settled and was now 1/4 inch lower and out of compliance)! This inspector noted that the chimney might be a problem down the road. Boom, buyer backed out even though their lender inspector found no issues.

So how do you all deal with inspectors????

Looking forward to insights. I plan on renting it for at least a year and then perhaps trying to sell. I can't afford to sit on it any longer not knowing what idiot inspector might walk through the door next and ding me for God knows what! Perhaps if it's not "newly rehabbed", the buyer won't be expecting me to build a new house! 

[Michael Knaus]

First I will apologize to all the home inspectors that read this.....They are PROFESSIONAL deal killers. They have killed more deals for me than I can count. All for absolute BS. Your post is a great example. For the sake of this argument I will assume that the insulation they are referring to as being asbestos was probably pipe wrap for a steam radiation heat system. Experts in the field actually don't recommend removing that. It becomes friable and therefore posing a bigger problem. They recommend wrapping (encapsulating) the insulation. Most home inspectors don't bother to explain what I just did, that it is NOT a heath problem. It's gonna be ok and you will not die. They get their fee and feel they have to justify that fee by scaring the living sh** out of a prospective buyer. Maybe they get some kind of kick out of it, I don't know. 

Most buyer's are not competent enough to understand a true hazard when they see one. That's why they hire a HI to begin with. They are trusting what they say as gospel though because they are the "expert". 

AS a real estate investor and seller, I ALWAYS ask to be notified when the inspection will be and I show up myself. It's quite funny when you call them out on their BS scare tactics in front of their customers. 

That being said, there are some issues that a HI does catch that can and will pose a problem for the buyer and for that, it works. They did their job and deserve that fee. BUT for every legit problem they "uncover" they report 10 "problems" that are total BS!!! Buyers trust that report and run for the hills. Sorry to rant. They just have killed too many deals (for BS reasons) to not be bitter.