Found a house that needs some cosmetics. New flooring, painting, cabinet faces, and counter top, landscaping. We are general contractors and have done a number of major remodels, so none of the work is at all an issue. Asking price is 105,000 with 2000 carpet allowance and 1500 to closing costs. Listing has been on market for 50 days and price has been unoccupied and they have lowered the price once already. Realtor says ARV should put us in the 147,000 area. The Question is 10 years back there was a suicide in the home. This has to be disclosed to any buyer. We are looking at flipping with financing with hard money so we need a fast sale. Is the suicide a deal killer? Its always going to follow the house. Any ideas? Thanks
It would follow the house but it should not affect the sale, but this is not something I had to deal with. People die in houses all the time, not sure why the law is anal about suicide disclosures.
I guess my question is… when and how is this disclosed? I know the question isn’t on the sales disclosure. I would have second thoughts about buying a house where someone killed themself, but that’s just me.
How was the suicide disclosed to you? Perhaps, you could use the same disclosure technique with your buyer.
The cosmetic repairs you cited may cost between $7K and $10K depending upon the amount of work involved. A $2K carpet allowance may not even cover the cost of the replacement flooring, so factor in rehab estimates from your contractors into your maximum purchase price.
Suicide stigmatizes a house. Many people won’t purchase when the previous owner committed suicide, and the difficulty to sell a stigmatized house lowers its sale price. A lower sale price for that house may have some dampening effect upon the property values of neighboring properties. Over time, the effect of this stigma evaporates. I would think that after ten years, few buyers would be turned off after learning about suicide in the property ten years earlier.
Have you verified that the suicide HAS to be disclosed? Most states do not require disclosure of deaths in the prop unless specifically asked by the buyer. Also, I’m sure that there is a timeframe involved in disclosure if it is required. If a property is 30 years old, chances are good that someone has died in the home. 50 years and older, you can count on it. I find it hard to believe that someone would have to disclose every death that happened in the home.
As Dave said, 10 years the stigma attached to the home because of the suicide should have faded. If anything, what would probably be more of an ‘issue’ would be the possible ‘haunted house,’ which could be good or bad, depending on the mindset of the buyer.
My suggestion, assume that you’re going to have to discount the property to get it sold and base your offer on the discounted price. If you get full value, then happier you.
Thanks for the suggestions. Paul
So did you decided to go after it Paul?