But they're not compelled to stay or accept the rent increase either.

We offered and they accepted.

This happens periodically and could end up with you either accepting the same sub par returns on your REITS as your rental portfolio. 

I am about to graduate from Stamford UConn with a Finance degree and hope to start investing in rental properties in either Norwalk or Stratford.

Is the Only Way to Negotiate a Lower Price with Builders is to have a pain in the butt inspector find a laundry list of problems and meaningless in the grand scheme defects to compel them to cut their numbers to move to acceptance and closing?

Is it fraud , no they are telling you the cost up front , you accept or decline . 

Let her know what you know, that it's not acceptable, and tell her she can go the easy way or the hard way.

Will admit I'm escalating to some degree because I'm frustrated she escalated so quickly and didn't make an attempt to work through issues.

Both of these options "should" drive your premiums down a good amount, and hopefully to a more acceptable level. 

Buyer ultimately pays it all, anyway, as seller factors in costs before accepting offer.