First and foremost, I'm not trying to be snide, but seriously, you get what you pay for...and $250.00 for a home inspection pretty much gets you a walk through...which is probably why he missed the red flags. That said, lets talk about those red flags. The sealer alone is not a red flag...because bottom line is that chances are that at some point most basements will experience water intrusion even if they have gone for years and never had a drop. This is because things change....the most obvious is development, which creates more impervious coverage, so the water flows to places that it never did before...often entering basements. The weather pattern has also been very weird for at least few years now, in terms of sometimes raining for days on end, overwhelminmg even the driest of basements. This is why many places are enacting new storm water management measures etc. That said, it is pro-active to seal the basement walls with seller...so that is not necessarily a "red flag". It is also best to have a sump pump? Do you have one? If not...have one installed. A friend who has owned his house since new 15 years ago had a flood in his basement for the first time a few months ago...a sump pump would have saved him a lot of grief. Of course, IF the staining along the floor and walls were present on the day of inspection, and did not develop between the day of inspection and the day you closed, and IF it was not concealed by the sellers possessions...yes, he should have noticed this and reported it.. If he took pictures of the basement and you have them to prove that the staining was present, you can make a case for money back. Otherwise, probably not. The porch is whole different story, as all of that should have been reported. If he did not include that in his report, I would send him documentation of what he missed, and tell him you want him to refund the cost of the inspection for that reason alone, water intrusion or not. However, you may need to prove that the porch issue caused water to intrude. You still have not said what the waterproofing company plans on doing about the water main issue, and the unknown source. Until you have definitive info on all of this, IMO, he will probably not comply as he can say that you can't pinpoint the cause as being the porch. Before spending huge bucks on the WP company, hire a professional landscaper to check the grade...as that could be your problem. You may also want to hire a forensic HI, to see if he can determine where the problem is coming form...as water has a funny way of appearing no where near the actual source of entry. Expect to pay at least $500.00. Last but not least...what state do you live in? I can check for you to see if they regulate the HI profession..if so, you should report him to the licensing board..or at least tell him you will..as that has far more impact than the BBB. .

FannieMae and other GSMs choose AS-IS to avoid liability. This is a big racket as they don't have resources or funds to rehabilitate homes which they bought improperly in the past. So, now they try to flip it to unknowing buyers and if you surface defects with the home - they will simply take it off the market for 60-90 days and relist it with a different agent AS-IS. I would request a significant reduction in cost and provide report of what you find? They will respond with disclosures advising you are aware of possible issues which THEY alerted you of in the process. If you can't find financing they will record it as unqualified buyer. It is a very sick process and I haven't found the government official I can write about this but when foreclosures return to the market it will be another round of bad quality homes entering the market place to new home buyers looking for a deal which may end up in foreclosure again.

When we bought our house there was evidence of water instrusion in the unfinished basement.The basement had paneling, ceiling tiles but a cement floor. It is made of cement block walls, and there was like your house a grading issue that was easily fixed with adding soil to that area and around the house and removing three large shrubs that were very close to the house. The biggest issue I suspect was that the gutters were not kept clean. In May the area experienced the most rainfall in two hours that it had seen in over 100 years. Many waterproofed basements were flooded (two destroyed), as well as our neighbor's who had recently waterproofed her basement for the second time and added French drains. She had a foot of water in her basement. This was the second time that she had to rip out her "mother in law suite." We had a small puddle of water. When you ask how big the real problem is I think that is unknown. Did you see evidence of water marks on the wood panels? How long ago were they put up? Can you take one down to look behind it and see water marks on the studs? Can you live with having an unfinished basement that might have a puddle every so often after heavy rains? I would never trust a basement to not leak again after it has shown evidence of a leak which is why I removed the paneling, the ceiling tiles, and keep mine unfinished even though it is has been dry except for that one rain. If you are counting on the basement as true living space then it may be an expensive and ongoing problem.

Knowing what state you are in, county or city might help. You might go to your local building dept and talk to them. Even though most cannot (and should not) recommend a inspector, some do have information who NOT to use. Ex: Los Angeles county does what they call a occupancy inspection done by their building inspectors which are trained in most of what you cover. When we sold, the inspector picked by the buyer was at first reluctant to go around the property as it was rural mountain property. DH was a retired LA county inspector, introduced himself, ( I was not evolved), as we had built the house ourselves. Within a short period of time many of the questions were answered and we only had a few minor things to correct and the inspector was very grateful and appreciated any information DH gave him. In fact he thought he might look into changing jobs. Check the internet to find out more about home inspectors, some fair, but many not trained well as many are general contractors. Just do your homework.