Effects of suicide

[Tom Horn]

I am doing an REO appraisal on a property where a person committed suicide. It has been cleaned up with flooring and some drywall being removed because of the effects of the suicide. Besides the obvious condition adjustments, does anybody have any experience as to the potential affects of the knowledge of the suicide on the selling of the home? An agent is getting ready to list it and says he will automatically discount it by $10,000 for this fact. He says he does not have to disclose it, (not sure about that) but will do so anyway to avoid future litigation. I know we have to have data to back up our adjustments but since this type of data is not as abundant what should I do? Any helpful comments would be appreciated.

 

[Joker]

I have no concrete evidence other than the fact that I wouldn't buy it but I know people who would.

 

[Midwest Guy]

I would no make adjustments for things that I cannot support!

 

[DHeriford]

I would no make adjustments for things that I cannot support!

i agree completey. If you don't have market data to support your adjustment i wouldn't make any. That doesn't mean i wouldn't disclose it in the report.

 

[PropertyEconomics]

There was a home in Albuquerque a number of years ago that as stigmatized by a murder .. a son murdered his father there ... the property was sold at a significantly lower price after the murder ... but subsequent sales did not have any such stigmata. Im not even sure the purchasers after the orginal sale have to even disclose the information or if it EVER has to be disclosed but more that the market widely knew aobut the murder at the time.
I have always wished I had bought that house, done some rehab and sold it at a significant profit.
There are appraisers who do stigmatized properties for a living ... ie Nicole Brown Simpson ...
I would think there is some stigma but it may be difficult to measure. You may only be able to interview several realtors and base your opinion on that .. flimsy as it may be. Truth is the only way you will konw is when it sells ... and I dont think at that point youd have a typical buyer or seller.

 

[Steve Owen]

This subject has been discussed before.

http://appraisersforum.com/urgent-help-needed/117443-mk-value-effect-body-found.html

http://appraisersforum.com/general-...116605-murder-suicide-house-impact-value.html

http://appraisersforum.com/urgent-help-needed/115311-murder-suicide-property.html

http://appraisersforum.com/general-appraisal-discussion/111347-bullet-holes.html

http://appraisersforum.com/general-...cle-stigmatized-properties-link-included.html

http://appraisersforum.com/urgent-help-needed/109490-murder-subject-property.html

http://appraisersforum.com/general-...s/108821-scandal-effect-how-tabloids-can.html

http://appraisersforum.com/general-...2-dr-disaster-appraises-properties-where.html

http://appraisersforum.com/urgent-help-needed/104666-stigmatized-property-2055-form.html

http://appraisersforum.com/urgent-help-needed/103311-murder-suicide.html

http://appraisersforum.com/general-real-estate-mortgage-discussions/102661-stigma-story.html

http://appraisersforum.com/urgent-help-needed/101396-stigma-due-crime.html

http://appraisersforum.com/commercial-industrial-appraisals/101722-stigmatized-property.html

http://appraisersforum.com/general-appraisal-discussion/95987-suicide-house.html

http://appraisersforum.com/urgent-help-needed/95361-considered-suicide.html

http://appraisersforum.com/general-...sions/94551-you-could-become-proud-owner.html

http://appraisersforum.com/newreply.php?do=newreply&noquote=1&p=1425539

http://appraisersforum.com/general-appraisal-discussion/94676-death-house.html

http://appraisersforum.com/general-appraisal-discussion/93250-stigmatized-properties.html

http://appraisersforum.com/general-appraisal-discussion/92570-murder-stigma.html

http://appraisersforum.com/general-appraisal-discussion/91320-required-report-killing-home.html

http://appraisersforum.com/general-appraisal-discussion/89412-can-stigma-affect-HBU.html

http://appraisersforum.com/general-appraisal-discussion/88469-disclosure-murder.html

http://appraisersforum.com/general-appraisal-discussion/87963-adjustment-stigmatized-comp.html

As you can see, this question is a fairly common occurence.

Spend a few days reading them and then let us know what you decided.

Beware that some of these posts are quite old, it is possible that some people have changed their mind about this over the years. Other than that, I really don't have a lot to offer. There are a wide variety of opinions on this issue, probably because there are a wide variety of circumstances. Amazing how many ways we have to do ourselves and others in, isn't it?

I can tell you that my gut feeling is that how much the stigma will lower market value may depend on the notoriety of the stigma and that also may determine how long the lowering (or raising in some cases) effect will last.

I am aware of a house where a girl was killed in Joplin. It stayed empty for awhile. Later it sold. (About two years later, I think). I did not see any indication that it sold for less than other similar houses. However, this house was pretty near the low end of the market to start with... there might not have been much further for it to fall. Additionally, the effect on MV might depend somewhat on the strata of society the property is selling to. Again, this is just my gut, but my gut is telling me that houses on the lower end and the upper end of the market may be less effected than houses in the middle.

 

[Atlanta CG]

My comments are probably in one of those references to past posts as well, but you may not want to go through all of those, so I'll summarize my experience briefly, here in Georgia. My wife sold a 5 year old home in a s/d of similar homes. I'm an ancilliary agent with her and decided to inform the buyer about the woman who shot herself in the master closet. The state had the carpet replaced, the drywall replaced and any of the surfaces that had blood spatters replaced and all repainted. Obviously there was no evidence. They decided to walk. Put the home back on the market, same price, sold it within 2 weeks for the same price (actually minimally higher). We do not, and I did not this time, have to reveal this legally. The people are still in it and I'm sure they know about it. They were not our client, the seller was. Other agents knew about it but it did not seem to affect their showing the home. Agree with others: unless you can substantiate a loss in value, be certain to mention it but indicate that no proof exists. Seems logical that the value would be adversely affected but without absolute proof.....

 

[James Andreas]

Most realtors in my market disclose the death, and I'd find comps - even 20 miles away - to demonstrate market response. Check PA and disclosures.

I believe if it is disclosed in MLS, I need to find 1 "death" comp to support opinion.

California
California Real Estate Transfer Disclosure Statement
(California Civil Code 1102, ET SEQ)

Many buyers consider death on real property to be a material fact in the purchase of property. In some situations, it is advisable to disclose that a death occurred or the manner of death. However, California Civil Code Section 1710.2 provides that you have no disclosure duty "where the death has occurred more than three years prior to the date the transferee offers to purchase, lease, or rent the real property, or [regardless of the date of occurrence] that an occupant of that property was afflicted with, or died from, Human T-Lymphotropic Virus Type III/Lymphadenopathy-Associated Virus." This law does not "immunize an owner or his or her agent from making an intentional misrepresentation in response to a direct inquiry from a transferee or a prospective transferee of real property, concerning deaths on the real property" .

 

[Bobby Byrd]

Stigma is a tough one.

I can tell you on a personal note that when my wife and I were looking at homes we looked at a house where a little girl died from a strange form of cancer. She didn't die in the home, but since we have a little girl, we just had a horrible feeling about the property. It was a shame, but something was so uncomfortable about buying "her" home. We felt bad about even attempting to make an offer, because we knew the family was in distress and we couldn't handle the guilt. It's not the same situation that you have, but was definatley our "market reaction". To your original question, if there were two houses, identical in everything except the suicide, which one would you buy? I would suggest talking to some of the agents in your area that have been around awhile, and see if they have ever dealt with a similar situation. You may have to search wide and far, then calculate the % loss and apply it to your subject.

 

[Alison Swain]

"Stigmatized" status goes to marketability and must be disclosed. I know of two --- one belonged to a friend of mine who shot herself. House took more than 18 months to sell in a market area that was very popular.

Another was in my sister's subdivision. Teenager shot himself. Parents sold the house a few months later for $320,000 when market value was around $360,000. I did an appraisal on a similar sized home in the same subdivision a couple months later and addressed this stigmatized home sale. First and, as yet, only time I've used the word "suicide" in an appraisal report.