Go Spanish. They know how to make classical guitars. You can find some nice Spanish made ones that aren't going to require you to take out a second mortgate. I have one made by a company named Raimundo, and its very nice. I got it for about 400, though it was on sale so I paid something like $350.

What to look for... hmm... avoid the tendancy to get a classical guitar with very low action. Remember, low action is an enemy of the classical guitarist! If you're into flamenco and all that cool rasguedo (?) stuff then you might think about getting a protective clear covering over the body near the sound whole so that your nails don't damage it. Just like any guitar, pay attention to the kind of wood that goes into it, the quality of the tuning machines, etc.


As for serious defects, well I wouldn't by any guitar with any serious defects!