When Your Inspection Report Contradicts the Seller Disclosure

The seller checked "No" on the disclosure form. The inspector found something different. Here's what to do next.

You read the seller's disclosure before making your offer. Everything looked fine — no major issues reported, no history of water damage, no foundation problems. Then the inspection report arrives, and it tells a completely different story.

This is more common than you might think. In California, sellers are required to disclose known material defects on the Transfer Disclosure Statement (TDS). But "known" is doing a lot of heavy lifting in that sentence. Some sellers genuinely don't know about problems. Others know and choose strategic answers.

The gap between what the seller disclosed and what the inspector found is where your negotiating power lives.

What Counts as a Contradiction?

Not every difference between the disclosure and the inspection report is a contradiction. Inspectors examine things sellers aren't asked about, and sellers disclose history that inspectors can't see. But certain patterns should get your attention immediately.

Clear Contradictions

These are cases where the seller specifically answered "No" to a question, but the inspection found evidence to the contrary.

• Seller checked "No known water damage." Inspector found water staining on basement walls, efflorescence on foundation, or moisture readings above normal in subfloor areas.
• Seller checked "No known foundation issues." Inspector documented cracks wider than 1/4 inch, uneven floors, or doors that won't close properly due to structural settling.
• Seller checked "No known roof leaks." Inspector found active moisture in attic sheathing, patched areas on the roof surface, or water damage on ceiling drywall below the roofline.
• Seller checked "No known plumbing problems." Inspector found corroded galvanized pipes, evidence of past slab leaks, or improper drain configurations.

Suspicious Omissions

Sometimes the contradiction isn't what the seller said — it's what they left blank or marked "Don't Know."

• Marking "Don't Know" on items the seller should know. If someone lived in a house for 15 years, they should know whether it has ever flooded or whether the HVAC system works.
• Leaving sections blank. California law requires sellers to complete the TDS fully. Blank answers are not neutral — they're a red flag.
• Vague answers where specifics are expected. "Some settling" when the inspector finds significant structural movement. "Minor cosmetic issues" when there's evidence of past repair work.

How to Document Contradictions

Before you bring contradictions to the seller, you need to build a clear case. Vague complaints like "the seller wasn't honest" won't get you anywhere. Specific, documented contradictions will.

1. Create a side-by-side comparison. List each TDS question alongside the relevant inspection finding. Use the exact question number from the TDS form and the exact page/section from the inspection report.
2. Photograph everything. If you attended the inspection, you should have photos. If not, your inspector's report should include them. Match photos to specific disclosure answers.
3. Get repair estimates. For each contradiction, get a rough cost estimate. This transforms "the seller wasn't honest about the roof" into "the seller said no roof leaks, the inspector found active leaking, and repair costs are estimated at $8,000-$15,000."
4. Note the timeline. If the seller has lived in the home for years, certain problems (like recurring leaks or ongoing foundation movement) are very difficult to claim ignorance about.

What to Do With Contradictions

Option 1: Negotiate a Price Reduction or Repair Credits

This is the most common path. Present the contradictions to the seller through your agent, with documentation and cost estimates. Most sellers will negotiate rather than risk the deal falling through — especially if you can show they knew about the problem.

Your leverage is strongest when the contradiction involves a material defect (something that affects the home's value or safety) and when there's evidence the seller should have known. A seller who claims "no water damage" in a home with clearly visible water staining on the basement walls has a weak position.

Option 2: Request Specific Repairs Before Closing

For safety issues — electrical hazards, structural problems, active gas leaks — you may want the seller to fix the problem rather than give you money. Be specific about what you need: "Licensed contractor repair of exposed knob-and-tube wiring in the attic" is better than "fix the electrical issues."

Option 3: Walk Away

If the contradictions are severe enough, this might be the right call. Multiple disclosure contradictions suggest a pattern of dishonesty, and you have to ask: what else might the seller not be telling you? During the contingency period, you can cancel the contract and get your earnest money back.

Option 4: Proceed With Eyes Open

Sometimes the contradictions are minor, or the house is worth it despite the issues. If you proceed, document everything. The contradictions become part of your record in case problems worsen after closing.

The California Legal Context

California has some of the strictest seller disclosure requirements in the country. Under Civil Code §1102, sellers of residential property (1-4 units) must complete the Transfer Disclosure Statement honestly and completely.

If a seller knowingly misrepresents the condition of the property, the buyer may have legal recourse even after closing. This doesn't mean every contradiction is fraud — but a pattern of contradictions, combined with evidence the seller knew about the problems, creates significant liability for the seller.

During the contingency period, contradictions give you negotiating power. After closing, they can form the basis of a legal claim if the problems turn out to be serious and the seller clearly knew about them.

How OfferWise Helps

Manually comparing a 40-page inspection report against a multi-page TDS form is tedious and easy to get wrong. OfferWise does this automatically — you upload both documents, and the system flags every instance where the inspection findings don't match what the seller disclosed. Each contradiction gets a severity rating and a cost estimate, giving you a clear picture of your negotiating position.