What term describes a physical defect that significantly impacts the value of the property?

The term that describes a physical defect significantly impacting the value of the property is "material defect." In real estate, a material defect refers to a problem that affects the property's value or the structural integrity of the property. This could include issues such as a leaking roof, foundation problems, or significant plumbing or electrical issues—all of which can lead to considerable expenses for necessary repairs and thus decrease the property’s market value.

Understanding the concept of a material defect is crucial for buyers, sellers, and real estate professionals, as these defects must be disclosed and can influence negotiations and transaction outcomes. A material defect is more serious than minor defects, which typically do not substantially impact value, or cosmetic defects, which may be purely aesthetic and not affect the property's overall function. Structural defects can be a subset of material defects, but the term "material defect" encompasses a broader range of issues that signify a significant impact on value.