However, it appears they submitted incorrect paperwork, and what they did submit was fraudulent, incomplete, and misleading.

Plumber came out to say the entire plumbing system was done incorrectly and there is also constant water running through the meter (even though nothing was turned on in the house).

Incorrect, garage is connected to the house, and he just wants to turn the 2 br into a 3 br house, If so that is where I got the 100 from.

I incorrectly assumed that, because he was new at this, that he didn't want to do rehab, wholesale or other 'value add'. 

It's a way to enforce serious inquiries only and I wouldn't worry about it too much.If the property is truly in marginal shape and priced incorrectly, it will go under contract frequently and the buyers will back out.  

@Zerimar Perez Nate is absolutely incorrect.

With all written about the coaching and seminar industry here on BP I will just say this: the information given is often either elementary or incorrect, the 'coaches' are often reading from a script and are former salesman for the guru who were not successful, and the background of the guru being worshipped as a real estate god has often been massaged, rewritten, or recreated.  

@Jason H.Mine is with Harris (now BMO Harris) which is how I learned that they can be reported incorrectly.

I was under the impression (perhaps incorrectly) that if you bought a property you would only be required to factor in the principal (and closing costs) when you sold the property.

(the original owner did the roof and insulation incorrectly) So long story short.