It’s much easier to encounter defect notes and missing papers, etc.

Warranty the work and be on the hook for defects that could be out of their control or product failures that result from cost cutting from the owner.  5.

Somebody wanting to sue for you backing out of a bad deal or accusing you of selling them a property with defects like unknown termite damage).

My realtor says he has occasionally seen this at the time the contract is written, but not as part of an inspection report, that the inspection is intended to identify major defects, this is not a major defect, and could be crossed off if we desire.

The best contractors will also honor their warranty requirements (in MN that's 1 year on cosmetics, 2 years on mechanicals (HVAC/electric/plumbing) and 10 years on structural defects).

It also posses another problem which is when you need to return product or material that is defective or damaged you are working with suppliers who have insanely high volumes and little relationship with the purchaser.

The home inspection report shows some defects in the Electrical, heating system, and AC duct defect.What is next step?

@Shantal Lawrence I don't know whether CT is a caveat emptor state or not and that will be relevant.My guess is that if you can show that the seller took active steps to conceal a material defect, you may have ammunition for a lawsuit.  

On HUD, distressed properties I suggest cash, Heloc, revolving etc to get around appraisal, inspection, defects. 

However as the SELLER you may be liable to the buyer for hidden defects.