Buyers Beware!

Video Summary

Buyers and sellers wonder about the phrase, "Buyers Beware!" About 20 years ago, the Florida Supreme Court handed down a ruling regarding the sale of residential real estate that changed that rule of thumb. In the case of Johnson v. Davis, the Supreme Court ruled that a seller is obligated to disclose to the seller any problems with the real estate that may affect the material value of the property. These flaws which are not readily observable are referred to as latent defects. Realtors generally ask the seller to complete a disclosure sheet to provide such information about a house. Standard language in a real estate contract includes a guarantee that the seller has disclosed any latent defects. As a result, the buyer has recourse in the case of undisclosed defects and can choose to invalidate the contract or to sue the seller for fraud. However, a buyer's best protection against latent defects in a property is still to have his own inspections and make as thorough an examination of the property as possible before making a purchase.