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What does caveat emptor mean?

Pay attention to this disclaimer in real estate

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Written by Jennifer Schurman
Edited by Cassidy McCants
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Caveat emptor, Latin for “let the buyer beware,” means you assume the financial responsibility of a home once you close on it. Essentially, it means you’ll want to do your due diligence in determining a home is up to your standards before you buy — or you’ll have to pay for the improvements.

Caveat emptor definition

Caveat emptor is a legal disclaimer that warns the buyer that it's their responsibility to ensure a property is in acceptable condition at the time of purchase. It relieves the seller of liability if any serious flaws are found after the sale is complete.

In recent years, there’s been a general shift away from protecting the seller and toward protecting the buyer. Many states are moving away from enforcing caveat emptor, at least in the case of residential real estate. At the time of publication, though, six states still tend to favor this disclaimer in the court of law:

  • Alabama
  • Arkansas
  • Georgia
  • North Dakota
  • Virginia
  • Wyoming

Caveat emptor in real estate

Caveat emptor means the buyer has to either live with or pay to repair any damages to the property they find after closing. So, if you find a small leak in the roof that’s led to water damage in your attic over time, you may not be able to hold the seller responsible for repairs unless you can somehow prove the damage was there before and the seller knowingly hid it.

A home inspection helps catch issues before they become the buyer’s responsibility.

Because the buyer assumes liability after closing, there are a few processes in place to protect them from purchasing a “lemon” of a home without knowing it. It's essential to get a professional home inspection to identify issues. The inspector will go over the report with you and your agent to ensure you understand any potential problems, and most will walk through the home with you to point them out.

This is a great time to ask about any visible damage you spot. Make sure to visit areas that are tucked away, like the attic and crawl space. After the inspection is complete, you can either move forward with the purchase (with or without seller concessions) or back out of the deal altogether.

In most states, the seller is required to complete a seller’s disclosure form — you should get access to this before you submit an offer. The seller has to answer typical questions about the home (like the year it was built) and indicate any matters of concern (e.g., if the property contains lead paint).

The seller’s signature confirms everything has been disclosed to the best of their knowledge. The buyer also eventually signs, acknowledging that the property is sold as is.

An exception to the caveat emptor disclaimer is if the seller committed fraud by withholding or concealing pertinent information about the home. If the seller was dishonest in the seller’s disclosure, you might have grounds for legal action.

Bottom line: What does caveat emptor mean for you?

If you’re in the process of house hunting, “caveat emptor” is a legal phrase you’ll want to become familiar with because it requires due diligence on your part.

In order to cover yourself both legally and financially, it’s smart to get a home inspection and thoroughly review the report. The inspector’s report can shed light on what issues might need attention — and save you from spending on expensive repairs for serious problems after closing.

Ultimately, it’s your responsibility to take steps to protect your interests. You should review the seller’s disclosure with your real estate agent and ask the seller to clarify any vague information and get answers to your questions in writing in case you need them in a future dispute.

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