What does the term "material defect" refer to in real estate?

The term "material defect" in real estate refers to a significant problem that could affect a property's value or desirability. This concept is crucial for both buyers and sellers, as it encompasses issues that might not only impact the property's marketability but also its safety or functionality. Material defects can include structural issues, problems with the roof, faulty plumbing or electrical systems, or environmental hazards such as mold or lead paint.

Understanding material defects is essential for real estate professionals when conducting property disclosures and for buyers who need to make informed decisions regarding their investments. While minor issues may not deter a buyer or significantly decrease property value, material defects hold the potential to create substantial impacts, necessitating their disclosure during transactions. This helps ensure that all parties have a clear understanding of the property's condition prior to making a commitment.