Final answer:
Caveat emptor places the burden of ascertaining the property's condition directly on the buyer. Imperfect information can make reaching an agreement on price difficult due to asymmetric information and lack of market condition awareness.
Step-by-step explanation:
Caveat emptor places the burden of ascertaining the condition of real property directly on the buyer. The concept of caveat emptor, or "let the buyer beware," assumes that the buyer is responsible for doing their due diligence regarding the quality or fitness of the property they are purchasing.
Determining a fair price for any asset can be challenging when there is imperfect information. This condition, where neither party has complete knowledge, can lead to situations of asymmetric information. Buyers and sellers must be well-informed of market conditions to make sound decisions, and when this does not happen, agreeing on a price becomes difficult.