Understanding Caveat Emptor

 Alabama is Different than most other States…. I can’t say for sure but based on my research, the only states that are still caveat emptor states are Virginia, Arkansas, and Alabama. When a person buys real estate in these three states, they need to fully understand it is their responsibility to make sure they know what they’re getting, that it’s in good condition and works properly. When the buyer does his due diligence to have the property inspected, their legal rights remain in place after closing should some latent structural defect appear. If a buyer elects not to have the proper inspection done, closes on the transaction and then a latent structural defect appears and the buyer sues for damages; numerous Supreme Court cases have ruled in favor of the seller and stated caveat emptor; the buyer is responsibility to inspect the property prior to purchase.


This is a topic I try to talk about in every class I teach because it is the most important and the least understood law. I intentionally try to scare real estate agents to get them to understand the importance of the law and the effects it has on people buying real estate in Alabama. Today I will tell you how to see the law as it is written, disclose the other states that have the same law, and explain the dangers and remedies associated with caveat emptor.

Caveat Emptor is the law in Alabama…..

The Alabama Supreme Court has held caveat emptor to be the law in a consistent line of cases. Everyone should be on notice that there is no warranty which comes with the sale of a used home.

Real estate agents were taught when completing their educational requirements to get their license that caveat emptor is a Latin [Read more…]

Selecting A Farm Area

Real estate is very territorial. Having a license to sell real estate in Alabama permits one to sell anywhere in the state but common sense tells us we can’t provide quality service from one end of the state to the other. A person can have license in multiple states but that doesn’t mean they can provide quality service from their home town. I live in an area that only a few miles separate Florida, Alabama and Mississippi. Some people hold a license in each of those states. You can’t sufficiently service a county, not even a city within a county.

Farming Works

I am referring to a territory that a sales person will work within the boundary. This is considered their farm. Let’s narrow the field and focus on real estate sales. Farming is an older and more complete term for prospecting for new clients to work with. A few years ago the term “Prospecting” was replaced with the term “Lead Generating.” These two terms don’t encompass near as much as “Farming.”

Real estate is very territorial. Having a license to sell real estate in Alabama permits one to sell anywhere in the state but common sense tells us we can’t provide quality service from one end of the state to the other. A person can have license in multiple states but that doesn’t mean they can provide quality service from their home town. I live in an area that only a few miles separate Florida, Alabama and Mississippi. Some people hold a license in each of those states. You can’t sufficiently service a county, not even a city within a county.

If a person really wants to be successful in selling real estate, they should select an area of a city, or a subdivision to be their territory. They are going to farm this territory by focusing all their efforts on this territory much like an agricultural farmer tends to his crops. When concentrating on a small area, one can make it a priority to learn everything about that particular area. [Read more…]

Internet is Hurting the Buying Public

Our job is to protect the consumer!

Our job is to protect the consumer!

I’m sure a lot of people will disagree with my topic statement. Hopefully you’ll take time to read it and then I think you’ll agree with me; at least in part. According to the National Association of Realtors most recent studies, close to 95% of real estate buyers search the Internet to find property for sale. In some cases, by doing so, buyers are more familiar with what’s on the market then the agent at the time the buyer contacts the agent. In some cases the buyer tries to buy a property directly from the seller, rather than using the services of a real estate agent, and this is potentially harmful to the buyer. For anyone buying real estate in Alabama, Arkansas and Virginia, it is especially dangerous because of Caveat Emptor. State laws, in these states, place all the responsibility on a buyer could cost the buyer a lot, financially, after the sale has closed. Without talking with an agent in those states, the buyer would never know about the laws that could affect them and it could cause them to have no legal recourse should a serious issue arise. [Read more…]

Caveat Emptor….An Actual Case

Caveat Emptor–Respect and Embrace it

I have spent a great deal of time teaching and lecturing regarding Alabama being a Caveat Emptor state. Buying real estate in Alabama is different from most all other states. It is not a law that should be feared but respected. Caveat Emptor should be embraced because it gives advance notice to buyers what they must do to provide future legal recourse. Not everyone is aware of the law until they learn of its affects; sadly too late to take precautionary measures. Below is a reprinted copy of an email that was directed to me for which I sought and received permission to share with my followers. The names have been omitted as requested by the consumer.

Consumer’s situation stated


My name is Could BE Anybody and I write to you from Huntsville. I work at a law firm as a civil litigation paralegal (doing primarily municipal defense work) but this message is personal and has nothing to do with my job. I’m using this account to avoid a spam filter.

My husband and I had a crisis of sorts over the weekend which led me to your articles and I just wanted to say thank you not only for writing them but for writing them to be of dual benefit to realtors and buyers.  The short version is that we were interested in a house in Any City, Al. (Any County), [Read more…]

What Consumer’s Need To Know

Questions Need Answering

This information is specific to what consumer’s need to know when buying or selling real estate in Alabama. Even more specifically, what consumers need to know when working with a real estate broker? Especially since Alabama is a Caveat Emptor state which places total responsibility on the buyer to do their due diligence in inspecting every aspect involved with a property prior to closing on a sale.

For years the seller has known who represents him when selling real estate but who represents the buyer? Who looks out for the buyers best financial interests? Some agents think the liability is too great when representing a buyer, largely due to the Caveat Emptor law; therefore they want to assist the buyer as a transaction broker to limit their liability. That being the case, many times, the poor buyer is left to fend for themselves without being told what they need to do prior to closing so they can protect their legal recourse options. The State of Alabama understands the precarious situation the buyer  is in when buying in Alabama so they provide

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My Agent Didn’t Tell Me—What Can I Do?

Some situations are confusing!

I was asked by a reader to elaborate on a personal situation that exists in the purchase of a home.  This is what she wrote; “Hi! I was wondering about a situation that I have going on with the company that sold us our home. I am having a hard time buying insurance because my roof has not been replaced in 26 1/2 years. And this was not disclosed at the time of closing. Can you give me some advice?” As you can see she gave me very few facts to work with but I will write this as a response to her.

 I appreciate the fact that you valued our opinion enough to write in seeking a response. First I must disclose that I am not an attorney and do not give legal advice, other than advising you to seek legal counsel from a qualified attorney. I will however, share some Alabama laws and real estate practices that can affect a buyer or seller of real estate in Alabama.

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What Buyer’s Want and Need to Know

It's Alabama Law

It seems I’ve opened a can of worms already talking about the dangers a buyer of real estate in Alabama faces. You might want to review some of my previous blogs such as “Meaningful Conversations for Alabama Realtors,” or “Establishing Relationships,” or “Just Tell it like it is.”  In all these blogs I explained the importance of disclosing the fact that Alabama is a Caveat Emptor state which places all the responsibility for detecting possible deficiencies in a property prior to closing. All real estate practitioners know the meaning but many don’t seem to understand the impact it has on their clients.

For many years consumers who are buying real estate have asked the question, “Who represents us, and who represents the seller?”  The National Association of Realtors has surveyed thousands of buyers and sellers to determine their satisfaction with representation by a Realtor. By far, buyers are most dissatisfied because it seems everybody represents the seller and no one wants to represent the buyer. Representation can’t be mandated on the National level due to variances in state laws. Since my job is educating people about real estate, primarily in Alabama, and since I live and work in Alabama, this article will be specific to our state.

Alabama law requires….

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Meaningful Conversation for Alabama Realtors

Alabama Realtors--Warn Your Buyers

2012 is license renewal year for Realtors® in Alabama and each agent must complete 15 hours of Continuing Education which is required by the Alabama Real Estate Commission. I have been holding CE classes all across the state and have noticed so many agents experiencing difficulties with the delicate balance between our RECAD requirements and having a meaningful conversation when contacting a prospective buyer for the first time. Since I encourage classroom participation, I have heard some of the most experienced, most successful real estate role play their RECAD process. I am shocked at their omission of the most important information we can share. Omitting this type information could affect the financial wellbeing for someone buying real estate in Alabama. Sharing this type information would definitely qualify as having a meaningful conversation. I’m sure you have already figured out that I am referring to the fact that Alabama is a Caveat Emptor state. For those outside the boundaries of Alabama, I will explain the importance of this statutory law.

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“Caveat Emptor” Buyer Beware

Don't be afraid--Be aware

If you understand the title of this blog, chances are you are in a real estate related business. When buying real estate in Alabama the words “Caveat Emptor” is of utmost importance.  Let’s take a look at the meaning of the term and how it affects Alabama real estate buyers.

Caveat emptor (ˌkæviːɑːt ˈɛmptɔr) is Latin for “Let the buyer beware.”Generally, caveat emptor is the property law doctrine that controls the sale of real property after the date of closing. Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud.

Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of “merchantable quality.” However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious.

Not all states are Caveat Emptor states. [Read more…]

Classroom vs. Online Comparison

Typical Real Estate Class


Hardly a day goes by that I don’t get a phone call or an email concerning some type of Prelicense class. Alabama License Law requires anyone desiring to get license to sell real estate in Alabama, must take a 60-hour Sales Prelicense course. This course can be taken in a typical classroom setting or it may be taken via the internet; commonly referred to as an online class.

The question commonly asked is which one is the most effective. On the other hand some people will say, “I need to sit in a classroom to learn.” I truly understand their feelings. I like the camaraderie I have with other students. It gives me someone to talk to.  We are such creatures of habit. We don’t like getting out of our comfort zone. We are accustomed to a classroom and learning from the internet is a new concept for us. We don’t understand how it works nor what to expect. Think about this; if we never got out of our comfort zones, we’d never learn new things. [Read more…]