Latent Defect

Definition

A hidden problem not visible during inspection—the property's way of saving embarrassing revelations for after you close.

Example Usage

The latent defect of black mold behind the walls cost $40K to remediate, despite passing the initial inspection.

Origin

Legal terminology, from Latin 'latens,' meaning hidden

Fun Fact

Home inspection reports are full of 'recommend further evaluation,' which is code for 'we're not touching that with a ten-foot pole.'

Source: American Society of Home Inspectors Standards

Related Terms

Beginner

Good Bones

Real estate code for "the house is ugly, possibly condemned, but the foundation hasn't crumbled yet, so there's hope." It's the property equivalent of saying someone has a great personality.

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Intermediate

covenant

A legally binding promise or restriction in a deed governing how property can be used, often imposed by developers to maintain neighborhood character. It's your neighbor's legal standing to care way too much about your fence height.

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Beginner

Listing Agent

The seller's personal hype person whose job is to make a perfectly average house sound like a French chateau. They are professional poets who can make a closet-sized bathroom sound like a spa retreat.

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Intermediate

buildout

The process of customizing and constructing interior spaces to meet a tenant's specific needs, transforming empty commercial shells into functional offices, restaurants, or retail spaces. This construction phase involves everything from framing walls to installing specialized equipment, typically negotiated between landlords and tenants with someone inevitably paying more than expected. It's when architectural dreams meet contractor reality and budgets start sweating.

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Beginner

comparables analysis

The process of evaluating recently sold similar properties to determine market value, essentially treating home pricing like comparison shopping for toasters. It's the foundation of appraisals and every pricing strategy that claims to be data-driven.

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Intermediate

GRM (Gross Rent Multiplier)

Property price divided by annual rental income, a quick valuation metric for income-producing properties.

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