Problem with that is the FHA inspections are so picky, they will not allow a FHA lone on a property with hardly any defect, including something as minor as flecking paint (I sold a property with a 3 year old paint job to a FHA buyer and this got called out, mortgage refused until remedied).

Also, very common title defects include transposed numbers or letters in documents in the land records....that has nothing to do with the risk of the individual selling you the property.

If you find major defects or costly repair items you can always renegotiate.The realtor will handle lining up all inspections as this is part of their job.

Are you (Seller) aware of any significant defects/malfunctions in any of thefollowing?

@Sandra GibsonThere were a lot of builders that got stuck with defective drywall.

This provision goes away generally if they are doing something illegal or ask you to hide material defects that are known.In license law as mentioned I have seen provisions where if a buyer or the buyers broker has made a REASONABLE attempt to go through the sellers broker then they can contact the seller directly.

When you buy, the title company will do a search and should bring anything to your attention, if there are title defects.  

If they don't send the notice, or the notice is defective, the redemption period can be as long as two years.

The HO-3 form however (for dwelling coverage) is an open peril policy, which means any sudden physical damage, subject to certain exclusions such as wear and tear, manufacturer's defect etc.Basically you are covered for a lot more in HO-3, the flood portion you mentioned is irrelevant in either form, ground water is specifically excluded from coverage on both forms.  

If the inspection comes back with very minor defects and they agree to fix them with licensed contractors in a week or less, it would be pretty hard to get out of the deal.I am a little surprised they accepted an "approval of partners" contingency, if they are fully on board, maybe offer to remove that one.