After a home inspection turned up everything from leaky toilets to termites, Cincinnati couple Hannah Powers and Ben Clinkinbeard thought about rescinding the $305,000 offer they d made on a four-bedroom home. Instead, they got an estimate for the cost of repairs, and worked it out that the seller would pick up the $10,000 tab. You can t wash dishes and flush the toilet at the same time, Powers, 28, says. That s a problem you d think someone would mention.

Though you may think you ve found your dream house, no property is perfect. For buyers who signed contracts before May 1 to meet the deadline for the home-buyer tax credit, now is the time to make sure your new home isn t hiding any defects or problems you weren t aware of.

Some home buyers in the rush to meet the deadline to get the tax credit may have overlooked a few of these issues related to home inspection, says Robert Lattas, a real estate attorney in Chicago.

Here s what you should know.

Inspection contingency

Like Powers and her husband, buyers should be sure to make the purchase contingent on a home inspection. The contingency period typically lasts a week or two. This is when the buyer should get an inspector to check the house for potential problems that need fixing and to look for other obviously important information that could kill the deal. This could include things like water damage, a furnace that s too old, or flaws in the foundation.

And with the hurry to get contracts done by April 30, I m sure there were many contracts that did contain a post-contract inspection period, says Alan E. Katz, a real estate attorney with Greenfield Stein & Senior in New York.

Read our story on home inspectors

Negotiating the repair

Many states, including Illinois and New York, require home sellers to fill out a property disclosure statement, which is supposed to note any material defects with the house that are known to the seller.

If the inspection uncovers a problem that wasn t noted in the disclosure form, the buyer might depending on how the contract clause was drafted have the right to terminate the contract, have the problem fixed by the seller before closing, or get a credit for the cost of the repair at closing, says Katz.

If the seller lied on his report for example, he knew there were flooding issues but didn t disclose the information the buyer could sue. But the buyer would need to be able to convince a judge or jury that the seller knew of the material defect and did not disclose it to the buyer, says Lattas.

Most real estate agents and attorneys representing home buyers would recommend against letting the seller handle the repair. The risk here is that the sellers will do a shoddy fix-up job. As a buyer, I don t want the seller to fix these issues, because I m not aware of their quality, Lattas says. A better alternative is to try to negotiate a repair credit as Powers and her husband did. But be aware that the contract might cap the credit amount.

Final walk-through

A standard contract typically includes a provision requiring the seller to maintain the property between the contract date and closing date. That means if the buyer sees a gash on the hardwood floor during the final walk-through that wasn t there at the time of inspection, that s considered a changed condition. You might be able to bring this up and ask for a price abatement, Lattas says. At that point, the seller will likely concede they re out of the property and presumably buying another home.

Also note that every contract indicates what in the house is included in the purchase price and what s not. Ellen Assael, a real estate agent with ZipRealty in Westchester, N.Y., had a client who, during the final walk-through, discovered that all the air-conditioning units had been removed. Under the contract, the units were supposed to be left in the house. There was big trouble at the closing table, Assael says. Ultimately, the seller gave the buyers a credit.

Property permits

Did the seller add a porch to the house or renovate the kitchen? If they did, make sure you ve got an amended certificate of occupancy or building permit that verifies the improvements were reviewed by the municipality and done according to code.

Sometimes owners don t even know they need to get a permit to reflect the addition, Katz says. Either way, buyers should have a provision in the contract which has the seller saying that the structure doesn t violate any code. This could also affect the buyer s ability to get bank financing. If you don t have a valid certificate of occupancy, the bank won t go through with the mortgage commitment, says Katz.