Be sure that any investment can be stressed test and handle a decline (correction or collapse).3) Position yourself (whether that's waiting, or learning, or building relationships) to capitalize - both when times are good & when times are bad. 

Most of the time, I don't shy away from homes with somewhat we basements or some settling, but I've seen homes with bowing walls that looked like they could one day collapse in to the basement.With that being said...

Normally they come out of the seller's pocket, but it has to be agreed in advance - or the closing will collapse.

(literally the reason you asked this question)@Nathan G. said it best really, you want to protect yourself to weather the storm, it won't last forever.I find it quite unlikely the national RE market will collapse like in 2008, so shorting the whole RE market seems less effective.

We may be facing another real estate collapse that could virtually wipe out your equity by the time it is needed.

What happens next year if China cannot keep up the Kabuki Theater and their Real Estate Bubble explodes like none other in the history of the world and the banking system worldwide collapses?

Different crash scenarios require different responses and I think the idea of holding larger cash positions to capitalize on a larger foreclosure market is foolish when the value of the dollar is rapidly collapsing.

If any of the larger names collapse, will the government response prevent large impacts on the real estate market?

Ain't that the truth  It ain't.He took RevPAL and the number of active STRs to active available home sale listings and based on those things said there is an Airbnb collapse coming.

If the roof collapses - are going to sue me or are they going to sue renter's warehouse?