Construction defects are common and implied warranties are the law of the land.

(a) If the Company establishes the title, or removes the alleged defect, lien orencumbrance, or cures the lack of a right of access to or from the land, or curesthe claim of unmarketability of title, or otherwise establishes the lien of the insuredmortgage, all as insured, in a reasonably diligent manner by any method, includinglitigation and the completion of any appeals therefrom, it shall have fully performedits obligations with respect to that matter and shall not be liable for any loss ordamage caused thereby.. . .To the extent that you are requesting compensation for the Alleged Damages, please see Condition8(a) of the Policy which provides the Company with the right to establish title as insured in areasonably diligent manner without being responsible for any loss or damage to the insured.

Maybe the market is hot enough that you could still turn a profit selling as is, but typically, sellers will ask you to take care of them before closing AND likely pay less for the property simply because there are known defects.

Your lawyer should be able to go after the home inspector and previous owners if they hid a substantial material defect.  

However, in both associations, if they provided incorrect information that you relied on the purchase the unit, I believe the statute should protect you.As far as the title insurer's denial, title insurance acts retrospectively, that is from the Date of Policy back in time and from the information you provided, as of today your title is as insured and there is no defect or cloud on your title. 

You are most likely right that the sale would stick unless you can find something that was not done correctly like a procedural defect.  

Is the Only Way to Negotiate a Lower Price with Builders is to have a pain in the butt inspector find a laundry list of problems and meaningless in the grand scheme defects to compel them to cut their numbers to move to acceptance and closing?

(Both toilet supply line failures if that’s worth anything.)I went with their remediation company (Service-pro) and their contractors for a few reasons. 1)They started everything the day of the leak/flooding. 2) They guaranteed everything, out of pocket costs, timeline, quality of work, a year to find any defects, etc etc  3) it was quick, painless, worry free.

What this is (and the name might differ in some states) is a demand from the buyer to the seller to either address a variety of defects or offer a credit to the buyer (i.e., reduce the sales price).

Now if there is a defect in the foreclosure process, the court may set the deed aside and instruct the Clerk to return the buyers funds but if the buyer later finds that the borrower foreclosed on only had 50% of the title, to bad so sad.