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.

First of all, it depends on your state law as to what the rules of disclosure are about a death or anything other "psychologically impacting event" that has occurred in a house/on a property.

If the buyers were worried about it, they should have asked (here, the Realtor is not to tell if they know unless they are asked in writing - and then they are to go to the seller to get the answer put in writing to give to the potential buyer).

I'm not sure I really understand your question . . . Is the appraisal being done as part of the lawsuit? And what does renting out the property have to do with it?

If it was REO, then there probably was a Disclaimer in the Contract that they signed with the Bank, relieving them (the Bank) of any responsibility for what they didn't know.

Wasn't it sold "As is, where is" ?

People die in houses all the time. Some actively commit suicide . . . . others bring passively about their own deaths through the life style choices they make. There's not really that big a difference. Most houses older that 50 years will have had someone pass away within them.

I hope their Attorney is operating on strictly a contingency basis, and hasn't required a retainer, or that they pay all of his/her expenses.

Your client liked the house enough to buy it and want to live in it so go get it "cleaned up" for her.

My mom used to call in the priest and he'd do a home-blessing ritual and prayer on our homes when we moved in. The new owner's wife believes in and is so scared of ghosts, so a priest might be the cheapest and most-believable route to get her into the home she likes. Suggest it to her.

And if, perchance, she's not Christian, get a feng-shui person to come in and do a space clearing for her.

No offense, but sounds like your clients are dumbassess. What is your involvement at all? Are they buying another house because their old one purchased in '09 is forever tainted in their minds? Tell them that a lot of people scatter ashes in backyards. Some people even have sex in sordid positions in their homes (even in the kitchen!) Every house is tainted. Run from these loons. They sound like the kind who sue if someone sneezes on them. They will buy a house through you, find out that there used to be an Indian burial ground nearby and you will be being sued, next.

Pagans and New Agers will sprinkle salt across the windows and thresholds - keeps the boogeyman out.

I don't think they have a case. No sane attorney would take that on a contingency.

Whoever the ultimate seller was, and it most likely was not the bank that originated the loan (was it Fannie, Freddie, BOA, Wells, a third party outsourcer, etc?) how on earth were they to know someone committed suicide in a home?

Depending on a state's law on when an event occured, it may not even be nec to disclose, let alone disclose at all.

I don't know why a death, sudden/tramitic, or not, would affect an appraisal, PM me & I'll go into detail.

Buyer & their agent didn't perform due dilligence. Cave emptor.

People all react to deaths differently. If you have a house that is over 75 or so years old, chances are somebody died there from natural causes. And there are plenty of houses where people buried their family pet in the back yard.

I don't know how a REO seller would know anything about the history of the property hence they have disclaimers as part of their addenda. Perhaps the listing agent might have know but probably not. And really, if some neighbor told the agent it would still be rumor. You can only disclose facts

In Georgia you don't have to disclose that a crime was committed in the house. If an agent knows and is asked a direct question they do, but if they tell the seller this before the seller says anything about it the seller can choose not to disclose it.


Not a lawyer. No legal advice.

I note you are in CA but in FL they changed the law from it being required to disclose of a suicide to it being illegal to mention if there was a suicide. One of the first houses my wife sold had to have the dishwasher replaced because the bullet (after exiting the head) put a hole in the dishwasher. At that time it was required to disclose. Now we can not mention it due to "Tainting the Property".

Also, since it was REO there is the lack of a homeowners disclosure since the bank has never occupied the property. If they are paying a lawyer as opposed to a contingent basis IMHO they are just throwing away money. My wifes mother passed away in her home from natural causes.

Call Ghost Busters and move on.

Just an FYI at REOExpo it was mentioned that one bank is trying to evict a "haunted" house and it has caused them untold headaches.

It's true that suicide is considered a crime in some jurisdictions; but I don't think anyone has ever been prosecuted for having succeeded in committing it . . . . so it's a crime without punishment.

Okay, this made me laugh. Is the bank trying to "evict" the ghosts or the living who refuse to leave & somehow the "haunted house" aspect has gotten tangled into the mess?

I was not their selling agent and I haven't seen the house either. As per buyer, there were holes in the bedroom ceiling where the suicide was committed. The carpet was all torn. After the escrow was closed they found out from neighbors and they got the police report then they figured it out the holes in the ceiling were from gun shot and under the torn carpet, there was all blood. They repaint the house and changed the carpet. The wife does not want to live in that house and she is concerned about her kids.
This is all what buyer told me.They are interested in buying another house but they want to wait and see the results of lawsuit.

The listing agent knew as per neighbors and neighbors are ready to go in court and say that they told the listing agent. Does it matter I don't know.

Yes, attorney keep charging them like a crazy. I guess chuck is stuck

And yes, the house is in CA and it was Fannie Mae property.

Fannie Mae has disclaimers throughout their addendum advising the buyer's to perform their own due diligence. If the buyer's had an agent, perhaps that agent should have performed some research. Regarding the selling agent knowing about the suicide and failing to disclose; Is that a requirement in your state? Regarding the neighbors being willing to testify; Talk is cheap, let's see if they'll take a few days off work for a deposition and a few more for a trial.
The thing about America is that anyone can sue anyone over just about anything and they'll find an attorney to take the case.
I would suggest you keep one thing in mind in dealing with your new "client". They have an attorney and they're not shy about litigating. I would not consider them as a "client" but rather as a source of aggravation later down the line. As such I'd send them to another agent....maybe someone you don't like.

A licensee has to disclose but what? For instance a neighbor tells me that the property had a sewer backup. There's no evidence inside, no stains, no smell, no residual mess. Do I, as the listing agent, have to research this and find the company that fixed it and get documents to prove it?

Some houses have a stigma to them, but at what point is an agent responsible to disclose it? There was a local house that was referred to as a House of Horrors. The divorced father had his brother drive him here from 3 hours away, killed his ex-wife and children, then drive him home (They both were convicted last year). A home improvement guy bought the house, completely renovated it and sold it to a new family. They loved the location, the house itself and everything else about it and were uneffected by the stigma.

Anyone can sue anyone for anything in this country. If you go through life worrying about it, you'll never get anything done.

Buyers didn't see this when viewing the home??? Someone can't tell damage from a shotgun vs damage from a ceiling fan?

They, you, whomever, (if you wish to remain involved in this mess) should read some appraiser forums on how appraisers value stigmatized properties. Much of it matters on how much publicity an event received, and how quickly the event will be "cured" so to speak, not actually what happened.

You're supposed to report it as a rumor:
"The neighbor told me that the sewer backed up."
"Neighbors told me that the people across the street have loud parties every Monday night during football season."

How is the OP involved in this matter?
So s/he wasn't involved at all in 2009.

And, if you've never even seen the house, then I guess these Owners are not Clients because they engaged you to sell a place that you've never even seen? (But that has happened!).

Are they now Clients because you're trying to find them a replacement property, as a Buyer's Agent? Then this earlier story will have put you en garde.

Now, if you weren't involved in their purchase of this suicide house; and you're not involved in the sale of it . . . . then why bother getting involved? Let their Attorney fiddle around with it. He's not doing pro bono work . . . . why would you?

I reserve the word "Client" for people with whom I have a contractual relationship . . . . past or present (NOT future).

And if you're not involved; don't get involved !

How does one disclose rumors? This could very well be a way for a neighbor to keep a buyer from purchasing a house as a form a discrimination. Buyer's & their agents need to perform their own due dilligence on homes through HI's, public record searches, etc, esp when buying repos. Things that will turn up facts and other issues with a property.

Here, it's pretty dangerous to disclose rumors . . . can get the Realtor into a lot of trouble.

Our state sales offer form has a list of possible inspections the buyer might want to do. One of the options listed on the form is "Psychologically Impacted Property and Megan's Law". Now, if the potential buyer can't figure out they might want to ask "what's this?" Then there's not much I can do for them.

You disclose it as a rumor and write: "A neighbor told me" -- that means it's a rumor. If you want to get specific you can elaborate further that the neighbor has no proof, you have no proof, you didn't go looking for proof on a rumor but you heard it so there ya go. If it turns out to be true, then your a.ss is covered.

You manage fair housing issues by disclosing the rumor to every buyer on your AVID no matter whom - duh.

I wrote on my last sale that the neighbors told me that certain cell phone carriers do not get reception in the neighborhood.

I'll respectfully disagree on the rumor issue. You must disclose facts and facts are things that can be proven with documentation.

Imagine a criminal trial and a witness states "I heard a rumor that the defendant did it." How far would that go.

I don't see the difference in a civil issue. One side gets someone to testify to a rumor and the other side gets someone else to testify to a rumor differently. Remember the old telephone game when you were a kid, by the time the rumor gets passed through a few people, it's completely different.

And how about the seller's rights, if a listing agent passes on a rumor about a property, especially if it can't be documented, is that showing fiduciary duty to the seller, your client?

That's the way my broker trained me when I went to her with this issue: If you knows, you must disclose and you knows a rumor - disclose it as a rumor"

Let's not go there with imagining court trials and stuff you saw on tv and lets keep it to issue at hand, ok? Please tell me why football parties and cell phone reception should be kept a secret and why you feel it'd kill a deal to disclose it.

Ive always wondered about this. A couple of years ago I did an interior bpo on a house that was obviously haunted. I called the bank and told them. I called the poc which was the agent about to list it as an REO. He said that he knew nothing about it and didnt want to know. I pulled the prior listing which noted that there had been a double murder in the house. The current listing agent had nothing about that in his listing. The house never sold and to this day is still vacant.

BTW I noted on the bpo the things that happened in this house while I was taking pictures and pictures to back it up. The rep at the bank even commented to me that he thought it was cool.

I absolutely agree with disclosing what is known & can be proven. A rumor, however isn't fact.

I bring up the discrimination thing, because it happens more than people think. Neighbor(s) have said, for example, to certain buyers, and only certain buyers, that there was, let's say, constant flooding & water damage in the basement, even though there was absolutely no proof or evidence of this, before or after a home inspection. Neighbor(s) just didn't want "certain kinds" of people moving in next door.

Would not wish to be party to that kind of rumor reporting, no thanks.

Rumors, like high school locker room gossip, serve little purpose, other than getting one served with a libel suit, and popped in front of the DRE.

Your scenario doesn't fit - it's about us the agents and our disclosure during escrow -- not about buyers talking to neighbors and what they say.

Of course it does. Neighbor runs mouth, again, to keep certain buyers out of the neighborhood. Buyer & their agent talk, and they also talk to listing agent, listing agent is now aware of "rumor", still want to buy, they get a HI, which again, is fine - but is property of the buyer. Financing falls through. You're saying listing agent is obligated to spread the rumor that the neighbor said, to CYA, which would go against the fiduciary duties to their seller client? That's the most jacked up thing I have ever heard of. And why you can/should disclose what is known. Not just I heard it from a friend, who heard it from a friend, who...

in my state you don't have to disclose that unless someone asks you point blank...you don't get asked that question very often. the last time i got asked that question was a lawyer found out while doing their due diligence about something totally different and the local said, "isn't that the property where..." and he then came back and asked me. i had no idea because it was an REO in a town i didn't know the gossip in and whatever...i did find out that it was true and told the story.

let me rephrase that...i told my asset manager and confirmed what i learned to the lawyer who asked but in that instance if someone asked me directly i would have to tell but by no means would i "volunteer".

I've never heard of neighbors rushing up to talk to certain buyers with information and not talk to others. Buyers don't normally meet the neighbors until after they move in.

Then you're awesomely lucky to be living in the liberal state of CA (this is not a dig, please don't take it as one) than here in bassakwards Ohio. It happens all the time. Certain towns are known for it. Heck, even certain streets, in particular 'hoods, if a person knowns their market well enough.

you are so right KT...OH sounds alot like RI. East coast thing?

Nah, cmm, it happens in good ol' podunk Oklahoma too. Sometimes the neighbor spreads a rumor because the neighbor him/herself is hoping to drive down the price so their dear ol' Aunt Edith or mama can buy the house, or the neighbor wants to buy the house him/herself to move the once-again preggo daughter into to get her and the brood she already has off of the neighbor's couch. I see this a lot with people thinking they can manipulate an REO sale.

And again, here, a Realtor had better not offer up any rumors they've heard about a property. You can find yourself called before the state rec to answer for your stories. Facts that are public record, sure, that information you can share.

i've never experienced it in a mean spirited way as you've described barb but neighbors can be wildcards...

Here in Pennsyltucky we get that all the time. And as a listing agent, I have no idea how many times the buyer returned to the property or who they spoke with there. And they tell them the latest gossip (who is getting divorced, who's kid got arrested, all about the guy with the Harley with pipes who leaves every morning at 5AM).

Another reason for a good listing Agent to be pro-active and make contact with the neighbors so that s/he can get ahead of the curve. Who knows . . . . the neighbors may be able to contribute some good marketing ideas; sometimes even leads.

Some of those stories make good advertising copy. You'd be hard pressed to make that stuff up . . . . and everyone knows people luv gossip!

and catholics call a Priest...LOL

Here's an example of disclosure and help from neighbors. I have to warn you though, dont be eating while you read it. Ewwwwwww.

http://www.abc3340.com/story/14919339/idaho-couples-dream-home-was-infested-with-snakes

Why did they sign something regarding snake infestation and then sound surprised that there were snakes? Where was their inspection? Did they not walk through the home...ever? They say that there were so many snakes at times that the grass seems like it was moving. WTF? They should have done their due diligence.

I think its a classic example of greed. They thought they were getting a deal and figured it wasent that bad.

I wonder who did the interior bpo on that house for the bank.

Don't know how it will hold up in court, but with with every listing, I always put in the comments section: "Due dilgence is the sole responsibility of buyer and buyer agent".

I have my attorney preparing a Snake Disclosure Form as I write this. I did get a chuckle out of the "snake-related post-traumatic stress disorder" mention. Heck he could write a book and be the next Snakespeare. Plenty of raw material to make snakeskin boots. Don't they make garters from garter snakes?

Enough levity for this morning. Most people are afraid of reptiles and I fully understand why they got out.

This sounds like it could be a movie. Instead of Snakes On A Plane. Snakes In My House.

It's a little bit creepy living in that house. I think it is the bank fault because they didn't inform the client about the true history of that house.







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How did they suddenly become a "client" ?

And a "client" for whom ?

This is always an interesting topic, and in MA, you don't have to disclose stigmatized property. I feel that Artiste is on the right path - if you KNOW something, you should never lie about it. I also think that if you KNOW something, it is almost always better to disclose it.

In the case of neighbors though, you may KNOW the neighbor said something about the house, but that doesn't mean you KNOW something about the house.

The neighbor may have told me that the living room was once painted in polka dots and was so ugly...why would that be pertinant? The neighbor may tell me that the sky over that particular house always looks green instead of blue? Why would I disclose the fact that the neighbor said this to a client?

This may sound far-fetched, but try proving a haunting to me.

In this case, the attorney is doing what they can to get paid and paid and paid. The bank covered their disclosures, most states don't require the disclosure of stigmatized property (I'd actually guess that ALL states don't require this disclosure), and they are making a big deal about nothing.

What about the indian that got murdered on that land in 1457 during a village dispute? How about all the dead animals in the backyard? Mice, moles, chipmunks, birds...

In MA, you can search the tax records for a death certificate on a property- so the bank COULD have known. But the buyer COULD have known in that case also. Either it's a case of a buyer not doing their due diligence, or a case of there being no way to reasonably know that something happened (which means the buyer, who bought as-is, has to live with it).

I'm not an attorney, this isn't legal advice...just my stupid opinion

The couple called me and told me that their lawyer said the bank agreed to pay them $60k.

Well now that the new owner knows what happen in that house, I wonder how much less they will get when they try to sell it. Now because the bank paid it, is now assume it is a true fact.

I had a property as an REO where the prior owner committed suicide on the day of the lock out and was found dead by the sheriff and myself... it was an awful situation. We got the house cleaned out though and put it on the market. NH is a state where you only disclose a suicide if asked. A buyer came along and though they didn't ask me about it, I did encourage them to talk to the woman across the street about the property as she knew what happened and even though I wasn't required to disclose, it still felt all wrong since I knew what happened and it would've bothered me if I was moving into that house and found out after the fact. I was very relieved when the neighbor brought it up. I hated that house... gave me the creeps going in there.

Yes, they received $60k and I'm showing them their new home now. As I mentioned earlier the wife doesn't want to live in that house so they rent it and disclose it that there was suicide in that house.