Murder Suicide, Need Advise Pronto!

[Bill75]

I just got back from an inspection (vacant house) and I realized why the contract price was 37k under list price. Found the sellers disclosure and it was checked that other than death by natural causes, suicide,... occurred on the property. I Googled the property and sure enough there was a murder suicide which occurred on the property. I have called the listing agent to confirm, but have not heard back in a day. Still waiting.

My question is how does one account for the "stigma" or external obsolescence which occurred on the property. Paired sale analysis?? I can't find another similar "stigmatized property" Also is there a canned statement which I can include to "cover me"

Do I ask for an additional fee?

Thanks for any help on this one.

 

[Slappy]

A lot of people would be negatively affected by the property's history. It has been my experience that similarly stigmitized homes are discounted. If you cannot find local stigmitized properties, you could expand your search parameters. Not to use as comps in your report, but to analyze and cite as a basis for deriving a market impact. I would think that former meth houses could also be analyzed in order to derive a market impact. I know that is apples and oranges, but you have to have some data to work with. You just have to disclose and explain on this one. I would explain in my report that my research indicates that an advese effect on marketability exists (if you think it does). I would cite historical sales of stigmitized properties and/or explain my analysis methodology. I would again explain that I found no reasonable local or dated comps and that my applied market adjustment for the adverse effect of the stigma was based on a historical paired sales analysis from competing markets and or similar stigmas. It is important to relay to them that there are no "good" proximate comps as their first reaction would be a request for similar "comps". I think if you disclose the condition / stigma and explain your methodology in analyzing the situation you will be all right.

 

[Tim The Enchanter]

Had 1 years go. Indicated value was x, value opinion was much lower sale price, and explained.

 

[Bill75]

Yeah I sure appreciate it guys. Just got word back from the listing broker. I asked her some questions:

1. Was the buyer aware of the circumstances - yes they were aware
2. In your opinion do you think this affects marketability? ahh....ahh...well....no...not really. The house has not been updated and I believe this is the reason it went for so low
(The house is under contract for 39k below market Value) and all of my comps have not been updated either.

3. Do you consider a stigma attached to this property? yes

My brother who's an attorney said to cross reference recent murder homes in the news and try and find if they were listed or sold right after by interviewing the brokers to see if it affects marketability. Just gather as much info as you can and disclose if it were to affect marketability.

On a side note, not to make light of a horrible situation, but another appraiser said the highest and best use could be a hunted house...

 

[Restrain]

Check out the (sp) Darlie Routier murder in Rowlett, TX. Appraiser in that area should be able to give you paired sales data. Also familiar with a very dated sale in Gainesville, TX, differential was 30% between what the buyer paid and market due to a murder in the home (I knew the buyer).

 

[Terrel L. Shields]

I can't find another similar "stigmatized property" Also is there a canned statement which I can include to "cover me"

Years ago, the daughter of my co-appraiser bought a house and got married, then rented the house, small, old house. The renter committed suicide with a shotgun which is a bloody way to go. The walls/ceilings had to be painted over, the carpet was kaput and the living room furnishings were blood splattered. She tried to sell but ended up giving it to the bank who lost about 20% of the value.

Fast forward to about 2011. I appraised a 2200 SF house with finished basement, the people didn't believe me and kept pricing it high. They finally sold it two years later for about what I appraised it for after another agent finally convinced them I was right and their first agent was wrong. The new owners were there about 3 months, maybe 4 when he got caught with another woman and in the night, the woman shot her husband in bed. She was arrested for murder, and his father was named the administrator and he simply turned the house back to the bank. They did a Hazmat cleanup before the foreclosure and the bank had it for less than six weeks. It sold for 10% over the previous sale price...go figure.

Last example. My cousin died and no one found him for over a week. Had to do a Hazmat cleanup, I was executor. We advertised the property for an auction, well advertised and several bidders, it sold for what I consider to be about 20% below what it should have. An independent opinion by the broker also came in very close to my pencil.

Do I ask for an additional fee?

Of course - any excuse works for me

y brother who's an attorney said to cross reference recent murder homes in the news and try and find if they were listed or sold right after

Your brother is on track.

 

[Mark K]

If just depends on the buyer. Some people won't care, others won't touch it. We have the same thing near the large airport nearby. No discernible price differential; its either all or nothing. Reduces the pool of potential buyers somewhat but not the price.

I've appraised 3 homes that were murder or suicide scenes. They sold for about the same as the comps, took a bit longer to sell but they were in the lower-than-average sales price cohort. I can see higher priced homes being affected more than the lower price homes.

 

[chad hampton]

Does your market have a high % of people who believe in ghosts? I'd appraise the home for what it's worth and then say it's selling for below market value due to a crime that took place there. In 1 yr, 5 yrs, or 10 yrs, no one will even remember what happened in that house.

People die in houses every day, some buyers may think that stuff matters, but I'd argue the vast majority of people don't believe in that sort of nonsense.

I'm sitting at a desk right now where a guy committed suicide at. It's been 10 years, no ghosts yet.

 

[Elliott]

Hospice care has become more common and I wouldn't think that would or should be a significant influence. Suicides and murders are more problematic. They tore down the duplex where Goldman and Nicole Simpson were murdered (outside).

 

[Terrel L. Shields]

They tore down the duplex where Goldman and Nicole Simpson were murdered (outside).

Celebrity murderers have longer impact. Studying history, there were 2 gunfights within a mile of my house. One in 1869 where two friends of Belle Starr's 1st husband were killed after they ambushed someone. The second were bank robbers surrounded by cops in 30's and two killed, one other made his escape. No telling how many more I don't know about.