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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Caveat emptor is a commonly used phrase in real estate deals, and you may hear it applied to everything from large corporate contracts to small private transactions. It’s a particularly important concept for buyers to understand, as it generally serves as a warning that a property is being sold as-is — flaws and all. What does caveat emptor mean
Caveat emptor is a Latin phrase that translates to “let the buyer beware.” The phrase provides notice to a buyer that the property being purchased may have unforeseen defects, and it puts the responsibility on the buyer to perform due diligence before closing the sale. Caveat emptor protects sellers from any liability if the property doesn’t meet the buyer’s expectations. In other words, as long as the seller tells the truth about the state of the property, he or she is off the hook for any problems or defects found after the sale closes. “The buyer cannot recover damages from the seller for property defects” in a caveat emptor sale, says Chase Michels, of the Michels Group at Compass in Hinsdale, Illinois. “The only exception is if the seller concealed defects or misrepresented the property.” Caveat emptor vs caveat venditor
Caveat venditor, another commonly used phrase, is the reverse of caveat emptor. It means “let the seller beware” and is designed to protect buyers. “It protects the buyer of a property who is privy to less information about the property than the seller,” says Michels. “This guarantees the buyer that the property will function as advertised and nothing is being hidden.” Caveat emptor example
Let’s say Ernest is selling a pair of shoes, which he advertises only as “never worn.” Following the principle of caveat emptor, that’s not enough information for a buyer, who would likely also want to know what material they’re made of, what color and style they are and what size they are, among other details. What must a seller disclose
In many states, homesellers are required to provide what’s known as a seller’s disclosure statement as part of the closing process. This document discloses details and information about any issues associated with a property that the seller is aware of. There are also places where caveat emptor is widely used. In such cases, sellers are not required to provide written disclosures outlining any issues with the property. Instead, it is up to the buyer to discover these things on their own. However, even in states where caveat emptor is used, sellers are typically expected to reveal any issues before finalizing a sale. The seller cannot actively withhold information about the property. “If they lie or conceal something, they can be held liable for it after the fact by the buyer,” says Michels. States that lean toward caveat emptor
All states technically allow caveat emptor sales, but there are some states where it is more commonly used, says Michels. Some of the states that lean toward caveat emptor include: Alabama Arkansas Georgia North Dakota Virginia Wyoming Bottom line
Caveat emptor in the United States means , and the buyer accepts it in its current form. When a caveat emptor is in place, a seller is released from any liability if a property does not meet your expectations. Before proceeding with this type of real estate transaction, be sure to do your due diligence and find out exactly what you’re buying. SHARE: Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles