REOPro - Real Estate Default Professionals

America's Largest Social Network for Default Real Estate Professionals

 

Have any of you ever dealt where someone got suicide and then property got foreclosed? Someone I know bought the property thru another realtor and found out after the closing that someone shot himself on the property. The closing was done and they tried to do the cleanup and they found out from neighbours about this suicide. Then they checked the house thouroghly and found the blood stains under the carpet and holes in the ceiling.

They wrote the letter to the REO bank and they said they didn't know anything about this incidence. Even though REO's are AS-IS, do they still need to disclose if there's a death on the property. Can anything be done because the buyer is not moving in after knowing all of this and rent that property?

Views: 287

Reply to This

Replies to This Discussion

Yes, they (Listing Agent & Bank) have to disclose about the suicide even though it's an REO property if they knew about it. Just because it's an REO and it's being sold in its "As-is" condition that do not mean they're exempted from disclosing to the public about deaths on the property. It is the agent's duty to disclose about this incident and I don't believe that the listing agent didn't know about the suicide. I had an REO assignment last year where the previous owner passed away on the property. When I was at the property the very first time, the neighbors came by and told me that the previous owner died of cancer on the premise. I disclosed it to the public and the bank about this incident and we priced it very aggressively. There is a huge price difference between deaths and no deaths on the property, but this is a suicide. Therefore, the price difference is even bigger. If your clients knew about the suicide, they probably wouldn't have bought it at the the price they've paid for this property. They would have gotten it for a lot less (probably 20% to 40% less).

Your clients are going to have a hard time renting this property out because they're now obligated to disclose the suicide to potential renters for a least 3 years in the State of California. If I were you, I would have them write letters to the Listing Agent and the Listing Agent's company and ask for some money for failing to disclose about the suicide or talk to some law professionals for help ASAP. I hope the Listing Agent's broker is a big company and has a big E&O insurance.

Good luck!

Sam
Yes and No, This varies state by state, In Florida we DO NOT have to disclose death, murder, suicide in homes for sale. All states are different, Some consider this material and some do not. However in your State (California) They DO require disclosure.

For the sake of this forum and all the people from all over the U.S. I will suggest a simple "Google" of their own state to verify laws.

Example, I typed in "disclosing death in house in california" and within 30 seconds I had all the answers I needed, Heres what I found.

http://www.wwlaw.com/death.htm
Morning Ranjit!!
Unfortuneately, there is no "death" disclosure in many states, I'm in Florida also... and just because there was a suicide dosnt mean there is anything wrong or any residual energy to worry about. I've had a few "haunted listings" in my past and it can be cleared .I actually became involved in some of that crazy stuff, when I purchased my own home...as I was moving in and unpacking... my shoes were thrown down the hall, Id put them back... and later in the eve, they'd be thrown down the hall again....... was insane.All kinds of stuff, footsteps, noises, rummaging sounds.. I think I cried for about 1 month.....my investment was gone.
I sat at the doorway night after night for about a week,I wouldnt go in... I would then go sleep at my moms....lol..... But, when your on the bottom-end of something, there's only 1 way out..... through it.....Its not difficult, but your friend has to become resolute. His /Her own belief system can affect the whole thing way worse than any ghosty can... Pls convince them to not be emotional and deal with it..... thats half the battle., then email me, I''ll send you more info.... I dont want to do it here, everyone probably is already going to think I'm nuts enough w/ this response...lol.... but...they werent in MY home when I bought it.... oh , by the by... turns out the 80+year old, third owner of my home passed away in an ambulance rt outside my home..... wasnt even a suicide, was a natural occurence... which, happens in more homes that most people care to think about.... and he decided to make himself known, at my emotional expense......my point is... any home can have a guest....dosnt take a suicide.
If you need more info-- email me...am glad to help- rose.mencia@gmail.com
Take Care!! Rose
Suicide does not necessarily stigmatize a property. The property is able to be cleaned up just like many other ills of an REO property. There are certified restoration specialists that can clean even the smallest amount of blood residue. I would rather own a property with a death than one that used to be a drug house or infected with meth. If the buyer has religious reasons for not being able to reside in the home, they should visit their religious advisor as to how to "cleanse" the house.
Thank you so much for replying to this post.

I just wanted to clarify that the buyer was not my client, they bougth the house thru another realtor, and they kept asking their agent why the carpet pieces were cut. It was their first house. The wife doesnot want to move into the house period. I have even talked to them and suggested them to have religious prayer done.

I learned one thing from this that when I submit an offer for my clients I always ask the neigbours for the deaths on the property.
In Maryland death is not consider a latent defect, so we don't have to disclose that, I sold a house that the previous owner told me there was a ghost in house. Now how am I supposed to verify that there is a ghost in the house, I went to that house several times and I never saw a ghost, and some clients can be a "interesting" people some times.

I agree with Tony that we need to know the law in our state, if that is part of the disclosures needed. Lets now assumed that because in your state REO properties are exempt from disclosures and the sale is AS IS then we don't have to do the right thing. In Maryland REO properties are exempt, but I always let them know if there is roof damage, mold, or any other type of latent defect that I can see, and they will repair it. Also sometimes they take an FHA contract where the property might require lender repairs, so it is better to know the issues with the property and ask the AM to repair them, I know we might have to front all or part of the money for the repairs, but it will make the house easier to sell.
Ranjit, I concur with those who state the laws of disclosure vary from state to state. The suicide theory should fall under the "Stigmatized Property Disclosure". I have practiced in Massachusetts and Virginia and made sure I knew the disclosure laws because I have heard horror stories from listing agents who have disclosed events that occurred at their listing without fully knowing the disclosure laws in their state. For instance, I know a realtor who disclosed that a listing had an AIDS death and was sued and lost her license b/c AIDS disclosure is not allowed as it bears no stigma on the property. A property where someone has committed suicide may be seen by some as a stigma and by some it may not be seen as a stigma. If it were the home of a famous celebrity and the suicide was widely published, one could argue that the house has been stigmatized. I know agents who say they disclose everything to their buyers, but at the same time, we must be careful that any disclosures need the written consent of the Sellers in some States. When my buyers ask about the neighborhood crime, I always advise them to check with the local police department.

• MASSACHUSETTES: If the buyer doesn’t ask, the seller and seller’s agent don’t have to tell. But if the buyer asks, the seller and agent must disclose. Buyers, be proactive!
Massachusettes New Stigmatized Property Law
• VIRGINIA: Liz Carlson of Long and Foster Oceanfront Office in Virginia Beach explained the situation in her state: “Virginia does not allow disclosure without written consent of Seller when representing the Seller. The reasoning–it does not materially affect the value.”
Visit Liz Carlson’s website
Very well said Carol, and thank you for reminding us that disclosure is always a "double edge sword". There are responsibilties both way.

I have a client who bought REO house thru another agent in 2009 but found out from neighbors later on that previous owner shot himself in that house. My client's wife did not want to move into that house and they rent it. Later they filed a law suit against the bank that why didn't they tell there was suicide in the house.
Their attorney asked them that there will be a special appraisal going to be done and the charges will be $3500 which is ridiculous. I suggested them they can find appraiser and probably pay the max $500.
Any ideas how much will be the difference/adjustment in appraisal if the appraiser knows there is a suicide in the house. 
Any feedback will be appreciated.

 

Any appraiser have any comments on this?

 

The Banks are going to get challenged on this type of disclosure.  There is going to be a friendly judge to the situation of the buyers and "HAMMER" a Bank for this.   I would love to have the details on this.  What State did it happen in?  Was the property listed as a short sale?  So on an so forth.   I can think of a long list of questions that should / could have been asked.  Did the Bank foreclose on a dead man?  Did anyone along the path tell the Bank... ?   I bet you could dig someone up that did.  Did the Bank pay for any clean up?  And then deny they knew?  This to me would point to fraud, knowing there is a detriment and hiding it is not as I see it something the bank is exempt from disclosing and point to intent.

 

If this happened in California,  I would contact CAR Legal and discuss the disclosure requirement, this could break some new legal ground. CAR LEGAL is free advise to members, don't trust the blogs.  You may want to also route this to the CAR Distressed Property Task Force just to keep them informed of the case and situation.  

It was Fannie Mae property, not short sale. The neighbors told the listing agent but I don't know if the bank knew or not, if the listing agent mentioned in her bpo or not.

Yes, it is in CA. The master bedroom ceiling had holes from gun shot  and the carpet had blood stains underneath which buyer found out after the closing when they asked the police report and read all the details.

Just want to clarify I was not their agent.

I don't think bank did the cleanup. I guess buyer replaced the carpet and paint the house. Buyer rented this property already and has no intention to live in it.

I am not a lawyer, but as a realtor who sells many homes in trust and probate here is what I know about what needs to be disclosed in California.  If the seller is required to fill out the transfer disclosure statement and supplemental then the seller needs to disclose that there was a death.  In a foreclosure the bank is not required to fill out these disclosures, just like the trustee or personal representative is not required to in a trust or probate sale.  In those cases it is up to the buyer to ask if someone died on the property and the trustee or agent must answer honestly if they knew there was a death on the property.  In a foreclosure the listing agent is required to perform a visual inspection of the property, as is the selling agent.  One of these agents should have noted that there were holes in the ceiling and blood, if the listing agent ever saw blood.  Again, not a lawyer or a judge, but I could see how both agents could be held liable for lack of due diligence by not disclosing the holes in the ceiling.  I could be wrong, but unless there are laws for banks different from other trustees, they would not be responsible unless specifically asked if there was a death.  If anyone has other information about this I would love to hear it.

RSS

© 2019   Created by Jesus (Jesse) Gonzalez.   Powered by

Badges  |  Report an Issue  |  Terms of Service