Definition of Caveat Emptor
The term caveat emptor is a Latin expression for “let the buyer beware.” It refers to the responsibility of a buyer to examine every aspect of a property before putting in an offer or buying the real estate property.
Why is this term important?
It is important that the buyer of a property is aware of all of their responsibilities before they purchase a home, and this is true for both resale homes and for new-build houses and condominiums. While sellers cannot hide latent defects—problems with the home that cannot easily be seen, such as prior basement flooding or internal wiring damage—sellers are not responsible for notifying potential buyers of possible problems, such as broken windows or an old or undersized furnace.
Examples of term
A potential home buyer may overlook a crack or flaw in a ceiling, but the responsibility would then be on the buyer if, at a later time, it was discovered that this crack was evidence of a potential roof collapse. That’s because the buyer could have paid for a careful home inspection that would’ve caught the potential problem and allowed the buyer to make a more educated purchasing decision.