Also, we believe this moisture in the basement was a latent defect that was not initially disclosed in the contract.

About like selling a car after putting sawdust in the transmission so it will run a few more miles, you're selling a defective "thing".Then there are others who simply deal in the dark, they don't advertise what they are doing, they simply sell the brief case that has the drugs in it in the back alley. 

Because sellers are known to lie about condition; and some will just overlook defects and problems that would be readily noticed by buyers.

Turns out it was full of defective drywall and owner--now a seller--will lose money!

The point of the recording system is to put you on inquiry notice of any defects in the properties record, and is exactly why you found the liens.

A vast majority of my cases come from landlords who use defective lease agreements, especially involving security deposits.

However, I would be lenient depending on the circumstance and do what is necessary to get it resolved correctly.NOTICE OF DEFECT:Lessee agrees to notify the Lessor or his agent, in writing, of any defects in, or complaints about the leased premises including any and all plumbing leaks and failed caulking around tub.

Re-negotiation is for hidden defects in my opinion.Unless you mean "earnest money deposit" by higher down payment, the buyer isn't really going to care how much money you put down (say, for your bank loan).  

The deal fell apart on the inspection because of hidden defects.  

There is a flavor of this being thought of as more of a defect than it actually is.