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Real estate glossaryNational exam concept

Material defect

A material defect is a problem with the property or its improvements that would significantly affect value, safety, intended use, or a reasonable buyer's decision.

Exam area: Property Disclosures

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What does “material defect” mean in real estate?

A material defect is a problem with the property or its improvements that would significantly affect value, safety, intended use, or a reasonable buyer's decision.

How is “material defect” different from the closest wrong answer?

Material concerns significance. Latent means not readily observable, and patent means discoverable through ordinary observation. A defect can be material and either latent or patent.

What is the Georgia-specific rule?

Georgia licensees are not automatically required to discover hidden defects, but they must handle actually known facts and statements according to BRRETA and other applicable law.

Worked exam example

Scenario

A known structural failure in a concealed foundation wall materially affects safety and value even though a casual walkthrough would not reveal it.

What is the most common exam trap?

Trap correction

Do not merge the questions of importance and visibility. Material, latent, and patent describe different features.

Original exam check

Apply the definition

A cracked foundation wall is hidden behind finished drywall. It significantly affects the home's safety and value, and a casual walkthrough would not reveal it. How is the defect best described?

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Related terms to learn next

Material fact

A material fact is information a reasonable party would consider important when deciding whether or on what terms to enter a real estate transaction.

Adverse material fact

An adverse material fact is significant information that is unfavorable to a party's interests, such as an actually known condition materially affecting the physical condition of the property or its immediate neighborhood, as described by Georgia law.

Latent defect

A latent defect is a property defect that is hidden or not readily discoverable through a reasonable ordinary observation or inspection of the type described in the question.

Patent defect

A patent defect is a property defect that is open, observable, or discoverable through the reasonable level of observation or inspection described in the transaction.

Recommended next complete lesson

Continue with Property Disclosures complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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