How would you feel if…
… you purchased a home and after closing found out that someone had died, was murdered or committed suicide in the house?
Feelings Vary Among Buyers
We have found that some people wouldn’t care, and yet others would be quite put off simply because they were not informed. Still others would be disturbed that someone died in the home; had they known, they would not have purchased. Still, different buyers would have reservations about buying depending on whether it was a natural or a violent death such as a murder or suicide.
Concern Over Resale Value
As well, finding out after the sale can still be upsetting for financial reasons. They are concerned that it would affect the resale of the home down the road. Had they known, they argue, they either would not have purchased or they would have offered less.
Case Study 1: Don’t Tell
In one case, the buyer bought after he was told that the previous owner had committed suicide in the home. He purchased to fix and flip. Yet when he decided to sell, he did not want the suicide disclosed. His lawyer informed him that he did not have to disclose it. The salesperson, however, felt that it should be disclosed as it could be construed a material fact, meaning that it might influence the buyer’s decision to buy or how much to offer. The seller eventually did agree to disclose the death and the property sold without a problem, and with very little variance from the list price.
Case Study 2: In or Out
The buyer asked if anyone had died at the property. The listing representative said, “Yes,” and mentioned that the owner had died from natural causes. The buyer proceeded with an offer in which the death was restated in writing. The buyer then asked whether the owner had died inside the home. On being told the death occurred outside the back door, the buyer proceeded with the purchase.
Case Study 3: 2 Offers
Here two buyers were competing for the same home. On being told of the suicide at offer presentation, the buyer with full price cash walked away. The 2nd buyer didn’t care, increased his offer to full price, obtained the needed financing and closed the deal.
Buyer Beware Applies But Now A New Ruling Exception
In a recent Canadian case, Wang v. Shao, 2019 BCCA 130 the Court of Appeal dealt with dealt a buyer complaint for nondisclosure of a murder on the property purchased The appeal court ruled that “buyer beware” applies. That is, when a buyer has a fear or subjective concern about a death, it’s up to the buyer to ask specific questions. Once asked the Seller must answer truthfully and cannot be silent or fail to disclose. The buyer did not specifically ask if a death occurred at the property but only asked why the seller was selling.
This is a New Twist. Prior to this, if the seller did not want to disclose and the buyer asked, the agent would have to say that he/she was not at liberty to disclose.