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
Mr.Anderson:
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), thought we had a pretty good idea of the condition it was in, made an offer which was accepted, had it inspected and then found it had a litany of problems which caused us to want to back out of the deal and just walk with our earnest money. We ultimately were able to walk away through a mutual release but that was only after much discussion, argument, and consultation with a man whom we’re told heads a major national franchise in the Huntsville area (“H.M.”?) and far too many phone calls to mention. It was awful and I would not wish the ordeal on any potential buyer. I had some crazed hours yesterday as I pondered who would represent us in a breach of contract action.
I don’t believe we truly appreciated how things work in Alabama in terms of caveat emptor until this last week. We signed a sales contract, erroneously believing that if major problems were found, we could just walk. We now know that’s wrong. Not only did the seller not have to tell us about problems, we only had the option to request repairs and then walk if the seller refused to make the major repairs. We kept telling ourselves, “no one can make us buy a house we don’t want because we have no faith in the structural integrity,” but I guess in Alabama, they could have tried. Scary stuff.
We’ll be much more careful next time we do this. I think we’ve pretty much agreed we won’t make another offer on a different house until we’ve had a thorough inspection. I’m told that could adversely affect the relationship with the seller, but from where we sit, I don’t know that we have much choice but to take all prudent steps to protect our interests if a structure turns out to have hidden issues. Since the burden is on us to “figure it out” and the seller has no obligation to “tell it like it is,” I’m not sure how we could be faulted for making all reasonable efforts to avoid making a very costly mistake.
I knew there was a reason I didn’t do real estate law. That was a joke…..thanks again for your articles. I’ll be watching for future pearls of wisdom from Foley.
As with all correspondence I receive through my website, I promptly responded via email. My response is shown below with the exception that names have been replaced to protect all parties.
My Response to consumer
Ms. Anybody
I really appreciate you taking time to write me about your bad experience in buying real estate. The Caveat Emptor law is really a good law because it lets buyer’s know their responsibility and the dangers of trusting a seller to disclose all defects in a home. Unfortunately all real estate agents don’t fully explain the dangers to a prospective buyer. Sometimes it their fault and sometimes it’s the fault of the buyer because they don’t communicate well with the agent. I try to warn both agents and consumers but many times they don’t believe me until they have already been harmed.
Take time to read the article I just posted on my website www.
If I can ever answer any questions for you about buying real estate, feel free to call me at (251) 979-2530. I am now a full-time educator but have been licensed for 43 years. If I can’t answer your questions, I can at least point you in the right direction.
She kindly responded giving me permission to reprint……..
our corresponding emails. Her last response is listed below.
Thanks for your reply, James. I didn’t expect you to respond but thank you for doing so. Your articles really were quite helpful.
You are free to share my email provided you remove my name. It would be great if someone could learn from our mistakes. I think it would help for buyers to know how to strike a balance between offending a seller and protecting his/her interests. One of our guys told me this morning that next time we take this path, we should consider 1) an inspection prior to making an offer or 2) some termination language that gives us some outs but without being unreasonable about it. We’re actually moving due to a shooting range issue (another real estate story for another day) and will go back into debt to do so (our mortgage has been paid off for years) so we did “freak out” a bit at the thought of being bound to a house we don’t trust due to issues with structural integrity.
This ended our communication.
This type situation could happen to anyone, anywhere in Alabama or other Caveat Emptor states such as Arkansas and Virginia. In this particular case I happen to know that the agency she used is a respectable and professional company. I also know the law firm which the buyer works as a civil litigation paralegal. They happen to be one of the most respected firms in the Huntsville area. Both you and I can read between the lines and understand the help her firm could provide in solving this issue. Should this happen to you, or someone you know, you or they might not have access to legal advice, which could greatly affect an outcome.
My advice to buyers is simple.
Caveat Emptor is not a bad law. It actually provides protection for the buyer. If you are buying real estate in a Caveat Emptor state, the best way to protect yourself is to sign a Buyer’s Agency Agreement (not a Transaction Broker’s Agreement) with a reputable agency. Demand a thorough consultation and be totally honest with the agent about everything you discuss. Then when the agent makes suggestions about various inspections you have performed, listen attentively and carefully evaluate their suggestions. The agent knows or should know much more about your needs relative to the purchase of real estate. For your protection, take advantage of their expertise.
Share your situations and ask questions.
Should you have specific questions concerning various issues, please let me know and I’ll research the answer for you. I also want to encourage you to subscribe to our “News & Updates” weekly report so you can stay abreast of issues that might affect you when buying or selling real estate. If you haven’t visited my website, please go to www.AlabamaRealEstateInstitute.com and view previous articles.