Caveat Emptor means "buyer beware". it is the buyer’s responsibility to do their due diligence to inspect every aspect of the property they are interested in prior to closing on a sale. Slowly, state by state, began transferring the responsibility from the buyer to the seller by doing away with the caveat emptor law. In the State of Ohio homes are required to have a Property Disclosure filled out by the Seller. However in cases of short sales or homes that have not been owner occupied that form is not filled out for reasons that there is no one to fill out the form.
However Caveat Emptor still applies to property disclosure in that the home owner / seller only answers questions to the form.
In many States there is no property disclosure. Case after case settled in Supreme Courts have stated their decision was based on the fact, the seller misrepresented a fact on the disclosure form. In some of those cases the judges based their decision on the fact the buyer never asked a specific, direct question to the seller. This sounds like a good basis for requiring a seller disclosure on every transaction. It would get all the defects out in the open so they can be dealt with and it would probably lessen the liability on the real estate agent as well.
A solid home inspection and having the home area checked for flood map locations can hopefully resolve any potential risk to the buyer. Unfortunately this may not find all the secrets behind a home purchased. There for example could be structural problems with that home or what the home was built on foundation wise.
Of course I can stir the pot here and state simply buy a home from a buyer who is responsible for filling out a property disclosure and get that home inspection but I am sure there still great opportunities out there that can be missed this way to so all in all Caveat Emptor