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).

This means that it doesn't always matter if the tenant knew about certain defects.

Seller further warrants that there is no material or other known defects or facts regarding Property, which would adversely affect the value of Property.NO JUDGMENTS: Seller warrants that there are no judgments threatening the equity in Property, and that there is no bankruptcy pending or contemplated by any titleholder.

@Bob Malecki  If the defect is bad enough, you'll need to file a superior court action to reform the previous deeds. 

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

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

The home inspection contingency usually only covers material defects.  

Today I attended a meeting where the Director of the Maryland Real Estate Commission commented on how they are becoming more viligent about flippers who fail to disclose material defects.  

Oven not working is usually one of three things... defective element, do it yourself cheep fix, fuse, do it yourself cheep fix, computer control panel, replace with used appliance...$200..