Final answer:
The phrase 'Caveat emptor' applies to the principle that buyers should be cautious and verify the conditions of a product or property before purchasing, and it typically applies to the sale of both new and used homes.
Step-by-step explanation:
The Latin phrase Caveat emptor, which means "let the buyer beware," is a principle that applies to many transactions, particularly where detailed inspections and guarantees are less common. It places the responsibility on buyers to perform due diligence before making a purchase.
The phrase Caveat emptor typically applies to both new and used homes. However, it is more often associated with used homes because these are less likely to be covered by warranties or builder guarantees compared to new homes.
Considering the broader scope of the Caveat emptor principle, it reminds buyers to be cautious and to verify product or property conditions, as advertisers are allowed to use exaggerated or ambiguous language and images as long as they are not factually false.
The Federal Trade Commission (FTC) does monitor factual claims but may not catch every instance of misleading information. Thus, while the concept of Caveat emptor can potentially extend to other product transactions, the correct answer to the question would be both answers shown.