We (the homeowners) just won a lawsuit against the builder for construction defects.

If you were to buy a property that was not insurable, or failed to obtain TI, any defect in title will be on you.

The inspection contingency gives you the opportunity to hire a licensed inspector to inform you of any property defects, which you can negotiate with seller.

Find an undisclosed defect and ask for a credit...... a $15,000 credit!

The property has an incurable defect, such as is in a flood way, which renders the property worth substantially less than it may appear to the inexperienced4.

You don't have to worry about liens, any well rated title company searches for this and you have title insurance to guard against a defective title.

@Michael Conte the seller and his agent have disclosed material defects in which they are both aware of. 

@Timothy Burnes Don't do it. 10-20k in equity is not worth all those issues.Bed bugs are a significant defect that can take either $5000 and tenting the whole building for heat treatment, which requires vacating the tenants or getting them hotel rooms for a few nights, or a sustained program of prevention with bed risers, leg traps, sealed mattress bags, and the tenants need to keep it up for.. get ready for it.. 6 months, which is how long they can live without a meal.Sewage in the basement could be a big issue if you have a sewer backup problem.The sinking toilet sounds like it needs immediate attention, but at least that's a straightforward repair.The other issues are what I would consider "normal" as in, you could fix them but don't need to in order to make the place liveable.Based on the bed bugs alone I would avoid... if you are comfortable with this level of rehab you should be getting a way better deal. 

They would normally look at the whole chain of title and see where the defects are. 

If the wife became the sole owner as surviving joint tenant by operation of law, her signing the deed in the capacity of Executor may have made that transfer defective.