Example. My wife and I buy the home of our dreams. We salivate over moving in. We set aside and pay deposits on new furniture for several rooms. We place $2,000 earnest money in the hands of our agent because we know we want that house. Then, the termite inspector comes in and finds out there is extensive damage in the roof of the house. The City inspector comes in and determines that the ceiling in an upstairs is too low to qualify as a bedroom and you have too many children to be able to occupy what remains to be granted an occupancy permit.
There are such things as hidden damages. There are some things such as item is not as presented. There are some things such as........... I can not find fault for management discovering after a deal was signed that the product was not what we believed we were buying and thus demanded, and hopefully received, their ernest money back. Also, in the case of the house, if I as the buyer had paid for a whole house inspection at my expense (our merger and acquisition outfit) and the deal fell through because we would have been left holding the bag so to speak, then the cost for the inspector would have been well worth the final result and possibly, even if we had to forfeit our earnest money, we'd come out ahead in the long run.
Hopefully the experience did not cost us any more than our auditor/inspectors fee. Actually that outfit possibly charges a fee of a certain percentage based of the final acquisition cost. May not have cost us a nickel since it fell through.
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