Suicide on REO property

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?

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

Replies

Tony Linton February 7, 2010 at 3:26am

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

Wwlaw.com
SAM TOUS, RDCPro, CDPE, HRC February 6, 2010 at 8:27pm

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

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