Beyond title defects (i.e., open permits), there can be other issues that prevent a closing from occurring, such as out-of-possession property lines, seller's non-ownership status, restrictive covenants preventing an intended use or just the efficient use of the property, existing liens against the real estate, current tenant issues with estoppel letters not being forthcoming--and many others.

You also have a duty to disclose known deficiencies of a property to an appraiser as well as to any lender, significant deficiencies can affect the collateral value and any loan decision, omission of facts known can be fraud.In all cases a seller who fails to disclose hidden or latent defects is liable for the value of such defects and is grounds for the termination of any offer or contract to purchase or lease.  

Sometimes I wonder why new construction is so riddled with defects. 

However, how many of them have stopped to questions whether what they are reciting is the correct verbiage or even if it is necessary at all.The difference between the person who wants to tell me why my comps are wrong and the person who wants to point out defects in the property are negligible.

I researched and found out that most homes in the '70s are lead free, anyway, so I might consider it again with testing, but easier to stick with newer properties where you just have to worry about mold, Chinese drywall, and defective pipes.

If, in rare instances, the inspector misses a major defect in the home, their errors and omissions insurance will cover the loss.

Defective coil leaked after a year.

No way I'd get into the defects=discounts game, you can't win that one.

You guys have been watching and reading too many conspiracy programs.The ability to pass marketable (insurable) title is typically restricted by one or more of several issues: Defective title at point of origination.

:-) Hi Marco: I agree with you about CA; I've been here almost 30 years and am just about to sell my last 2 properties and defect to North Carolina.