You really need your business to be zero-defect, efficient and high touch before you acquire as those owners will be looking carefully whether to stay or go. 

This could lead to a future event that optionee comes up and buy my property at a stipulated price.Currently, I have heard a few things:- Title company: they say there have been a few transactions after this Option, there should be no issue, but this is not covered by insurance- an unpaid legal advice from a local lawyer: this is a defected title, should cancel the purchase- Realtor: we will try to remove this, but this is not an important issue- Realtor friends: No.

While many people disagree with me, I recommend to newer investors to either buy a performing note or JV with someone on their first deal if its non-performing because you will realize there is a lot of time involved and ancillary costs (such as you order the title report and there is a fatal defect on title - you may have just dropped $250 and not bought an asset).

While due diligence is always necessary, disclosure of known defects is and should be required. 

Basically, the chain of title is unbroken and free of defects and transfer of title can take place with little to no additional work involved above and beyond a normal closing.

In one such case from Texas, the jury held sellers liable for failing to disclose the existence of foundation defects revealed in a prior prospective buyer's engineering report, where the prospective buyer terminated the earnest money contract based on the report.”

Inspector happened to find defective substrate in the asphalt shingles; a major defect not visible from the ground. 

It's too easy for the novice to miss something such as a defect in the title chain or a lien (mechanic's, municipal, etc.) on the property. 

Hello, everyone, My new construction house will close on 9/24, but the builder refused to fix the defective works behind the drywall, deposit $25000, Arbitration clause on the contract, what should i do?

In the end they provided him with terrible quality work and the building was  discovered by the buyer/owners to have many defects and sued the seller in court and won a $1,750,000.00 award from the court.