Hello Steve- You're seeing more and more of this as more people are looking at and making offers on REO properties.
Keep in mind that if a home is not currently habitable, one of the only mortgages that will work to buy it is a FHA 203k mortgage. This is especially true if it is a HUD-owned home.
During the inspection, many buyers don't realize that the seller (bank, etc) will normally do NOTHING to help you or your inspector out. You will need to pay to dewinterize, and then rewinterize. You will also need to pay to turn on utilities so that all of that can be inspected as well. A lot of this doesn't get done and the inspector cannot inspect properly, and the buyer ends up backing out per an unsatisfactory/ incomplete inspection.
If you need any help with going thru this, especially with the financing end of things, please let me know.
Thanks, and good luck,
Ken L.

An agent cannot knowingly hide a serious or structural defect.

If there is a serious defect in the property, then yes they have to disclose the defect.
You can always ask about it, as it's a legitimate concern. They don't, however, have to show you the inspection report or specific details of the property, unless they consent from the seller.

hth
Erica