A lenders definition of livable is very different from my own ;)  Stay away from major defects and mold - a good foundation, working mechanicals, a toilet, and a stove are pretty big requirements ;)

Purchase and Sale Agreement, Sales Contract.Lender has no knowledge of and is unwilling to investigate into latent defects, is selling as-is with some systems not working?

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).

Defective work, abandonment and breach of contract.Him quitting after he screw everything up is much better than you firing him!!

It's not like buying a TV that breaks so I call customer service who says "oops you got a defective one, we'll send you a new one".

There could be some defects but assuming 'standard' distressed loan, the price would work.  

Assume that they're hiding non-obvious defects.  

If however, the problem is because of some defect in the foreclosure process itself, then yes it may fall apart. 

The borrower has filed for BK My estimate of the property value is inaccurate, a proper BPO or appraisal would value the property far lessUnpaid property taxes/HOA feesBorrower is very difficult to work withProperty located in state with very lender-unfriendly foreclosure lawsPotential enforceability issues with the note Defective assignmentsDocuments lack required formalities like signatures of all borrowers; notarizationTerms that constitute predatory lending?

Although I'd had a checking account with them for many years, they refused to give me free checking when I turned 55 so I defected to a Union Bank right across the street.