What the Realtor Didn’t Tell You About Your New Home

"Conveys with property"

From the Boulder, Colorado real estate listings:

FOR SALE: $2,300,000

“Stunning, updated, classic Uni-Hill home. Elegance of past generations combined with modern updates make this home unique. Huge rooms, great light and an over-sized, gated lot on a fine street just a short walk from CU and Chautauqua. Beautiful high-end kitchen, a large terrace with a view and a master suite which encompasses the entire upper level and has stunning views. Nicely finished basement with high end finishes, wet bar & wine cellar. Too many features to mention in this beautiful home.”

One of those “features”: JonBenet Ramsey was found dead in that nicely finished basement, and was almost certainly murdered in the house.

Oh, that.

Only a couple of municipalities have laws requiring sellers to divulge these kind of disturbing details; it is firmly in the realm of “let the buyer beware” (of the headless ghost who howls in the master bedroom every night). The listing is still deceptive for what it omits, and unethical. It is a near certainty that a lot of potential buyers would prefer not to live in a house that was the scene of a murder, some more who don’t want to reside where there was a high-profile murder, and an additional batch who would recoil from the idea living at the scene of a child’s murder. Then there is the fact that this murder remains unsolved. Maybe the killer’s plan is to make regular visits, say every 20 years or so.

All of this means that full disclosure lowers the value of the house, which means that the asking price is based on deception. Realtors will give you a lot of standard rationalizations for the practice of trying to keep murders and suicides hush-hush.

“Oh, something bad has happened in every old house!”

“All they have to do is ask!

“What difference does it make? That was a long time ago!”

“Oh, everybody knows about it anyway!”

The truth is still this: there is something about the $2,300,000 house that makes it undesirable to a lot of prospects, and that means that even if the law doesn’t require the seller to tell interested house-hunters the story of the little dead girl in the basement, fairness and the Golden Rule do.

34 thoughts on “What the Realtor Didn’t Tell You About Your New Home

  1. I call shenanigans on your reasons, except for the high profile aspect.

    Nothing else is in the least bit relevant. Do real estate agents also need to disclose if there was domestic abuse in a house? A single incident of child abuse? That a previous resident was a felon? That a previous resident was associated with felons? What’s the line?

    This isn’t a house built on top of a massive snake nest. There’s no reason to believe that the past history will intrude in any way on future occupants, unless obsessed “fans” are coming by all the time.

    Leaving out that this house is infamous is the only issue I see with this listing.

    • All that matters is that there is a feature about the house that a seller can reasonably anticipate will make a significant percentage of potential buyers not want to live there. It doesn’t have to be rational to be real. Was the home a house of prostitution? Did satanic worship occur there? Is it built on a an Indian burial ground? I know polls on the topic of murder houses indicate that the percentage of the population that feels this way is around 50%. That makes it a material misrepresentation, in my book.

      Sure, the slippery slope argument is what I get from realtors. But most people don’t care about those lesser events you mentioned. Living in Lizzy Borden’s home, they do—and not because the house is infamous.
      My house is infamous because I live there.

      Love your classic use of “shenanigans,’ by the way. I meant to note that earlie.

      • It’s a useful word.

        I don’t see how you can avoid the slippery slope question. Your basis is 50% of the population having a desire. Is that the cutoff?

        I think over 50% of people would prefer to live in a house where there hasn’t been child abuse. Go back a few years, and I bet a significant portion of the population would prefer to live in a house that had never had black occupants.

        Back in today’s world, more than 50% of the population doesn’t want to live in a haunted house. If a previous tenant thought the house was haunted, does the complete nonexistence of ghosts make not mentioning this a material representation?

        If an event is uncommon, does a realtor need to take a poll before deciding what is material and what isn’t?

  2. Easy: I draw a hard line at murder. That’s it. The haunting issue is a fun one. I think telling someone a house is haunted increases the chance that they’ll think they see ghosts there. There might be an obligation NOT to tell a buyer that.

  3. Oh, please. If a murder, or multi-murder has occurred in a house, it ought to be reported. Not because prospective owners fear the “ghosts” of residents past, but because it may give the buyer some negotiation abilities they may have not had before. We had a house in our multi-million dollar neighborhood lie empty for two years because the owner was murdered by his contractors. Who wants to live there? Who wants to live where the contractor/murderers know the address, the lay-out, and the security systems (such as they were)?

    I think it is incumbent upon realtors to tell the whole story of a house. Ours, for exmple, was built in 1950, is brick and block, and before sale in 1980 had only one owner. Our realtor was honest enough to let us know that the previous owner (an oral surgeon) died in our house.

    Now, if the realtor had told us that our home was the site of a home invasion and that 10 people were killed, and even that all the perpertrators were in jail, I would think we’d have some leverage as to price.

    Agreed?

    There are those who are sick enough to pay top dollar for Jon Benet’s death house. Let them. But DON’T PRETEND A TRAGEDY DIDN’T HAPPEN THERE. This is PURE DECEIT. I would very much like to know what (if any) professional rules of responsibility apply to the real estate business.

  4. So, the sellers realtor should be required to give the buyers information that would give the buyer’s leverage, even though it has no actual effect on the buyers or the house. Greed is good.

    As for the house you reference. Is there any reason to believe the murderers would murder again in that house? Shouldn’t all houses those contractors worked on be given the same treatment? The murderers know the layout and security systems of those houses, too.

    As for your house, it’s required in various jurisdictions for realtors to disclose if the previous occupant died in the house. Why? Because legislators were superstitious idiots or pandered to superstitious idiots.

    Why is it sick to buy a house where a little girl may have been murdered? I don’t get it.

    • I think it’s worth keeping firmly in mind here that Jack is talking about what’s ethical, and not what’s legal. Perhaps, he believes that full-disclosure of a house’s historyshould be a legal requirement but, if so, he did not indicate it. Thus, it is, or ought to be, off the table for purposes of the current discussion.
      So, the question is, does the realtor have an ethical obligation to fully reveal the history of this house. Well, the funny thing about behaving ethically is, it often requires us to act in ways that are not in our own immediate best interest. As Elizabeth says, this may give a potential buyer a leverage point to negotiate a lower price for the house, to the detriment of the realtor, who could end up taking a lower commision as a result. No surprise, then, that the realtor would love to find a reason not to opt for full disclosure.
      But, if that realtor successfully conceals the house’s history from an actual buyer, one who would not have bought had they known otherwise? The realtor had a simple, human duty to disclose, even if it cost him money (and, yes, even if it cost me money, were I the realtor). What’s going to happen to the buyer? Maybe they’ll feel compelled to turn around and re-sell the house, possibly (even probably) at cost to themselves, certainly at great personal inconvenience. Maybe they’d feel they can’t re-sell, and so must live in it. Does anyone really want to make a sale so badly that it’s a matter of indifference to them that the buyer suddenly stops sleeping well at night?
      Jack’s right: this is Golden Rule time. If I am willing to treat with someone else in a way that I would not want anyone to treat with me, is that logically consistent (much less ethically consistent)? And would any of us want to live in the resulting society should everyone behave in that fashion?

      • The realtor had a simple, human duty to disclose, even if it cost him money (and, yes, even if it cost me money, were I the realtor) Why? Do I have the simply, human duty to tell everyone I work with in business that the pen I gave them was used by a murderer? (Not that I’m a murderer or anything.) If the history has no bearing on the house in any tangible way, then the history is irrelevant.

        As for the Golden Rule, how is anyone being treated badly? As a dollar store retailer, would I have the ethical duty to put signs on my plastic kazoos that they were transported to me by a company that hires paroled sex offenders? It’s just as relevant to the quality of the merchandise as a murder previously occurring in a house.

    • “Greed is good?” Give me a break.

      If one’s house sits on an old salt mine, is part of the overflow of a chemical plant, don’t we have a right to know? Don’t we take out chances based on our best knowledge of the property?

      If we can get a lower price based on the house’s history, is this greedier than any other arrangement based upon the history of the car, plane, train, home?

      People unknowingly buy on flood plains all the time. That’s not necessarily their fault, though they clearly haven’t done their research. “Caveat emptor” kind of loses the cachet of the “honest realtor,” doesn’t it? “Like a good neighbor” and all that.

      • You are misrepresenting my position. Factors that actually affect the property need to be disclosed. I have never argued against it. I have simple argued that things that are unrelated to the viability of the property (like a murder having been possibly committed there) are irrelevant. You can clearly see that in my CarFax analogy.

        You wanted a lower price because you wanted a lower price. That’s fine.

        You wanted to require the seller to give you leverage to get a lower price, not for any relevant reason, but just because you wanted a lower price. That part deserves the “greed is good” line.

  5. I think what Elizabeth was saying is that it’s sick to buy a house BECAUSE a little girl was murdered there. You get that, right?

    People buy homes to be happy be happy there. If something reasonably can be expected to make them UNhappy, then they should be told about it. I don’t think that’s unreasonable.

    • That was my first reading, but it doesn’t hold up. If the realtors thought they’d get above market for the house because of the previous crimes, they’d advertise that fact to pieces.

      As for your second point, you have now claimed 3 different lines for disclosure: 50% desire of general population not to live somewhere, murder only, and reasonable expectation of unhappiness. I can’t even make a coherent position out of those.

      • What? The first was meant to show the concern was material to a lot of people, the second is where I think this suggest the line should be drawn, and the third is why it is the right thing to do.

        And the latter also suggests a fair case by case judgment when something unusual is at play. I thing selling a house that was an abortion clinic to prominent anti-abortion advocates would be wrong, unconscionable, perhaps. (And they might well be able to get the contract abrogated.)

        • “Murder only” is the line, and the reason “murder only” is the line is because it would make people unhappy. That’s no justification, as we’ve already seen alot of other things would make people unhappy.

          As for the latter, I see absolutely nothing wrong with that in either direction. I don’t see how that prior usage would have any affect on the contract either.

  6. Ever hear of the “car fax?” By law one can ask for the history of a CAR, for god’s sake. What’s so wrong about asking for the history of a HOUSE, a much larger investment?

    Ghosts, murderers, and all that aside, if by law you can get the history of your USED car, why not the house you intend to invest logarithmically more in?

  7. First, car faxes are only optional reporting. Not the best example.

    Second, the information that would be on them is actually relevant to the object itself. A murder occurring in the house is not going to change the structural integrity or expected lifespan of the house.

    • If a car was involved in a drug deal, if people were murdered in same, wouldn’t that show up in the car Fax? And even if it doesn’t, a car is a car is a car, as they say, and a house is a home.

      We had friends who bought a Mercedes at the police auction, from arrested drug dealers, and have been looking over their shoulders for five years.

      • The car fax is advertised as the history of things that would effect your car. I don’t know what exactly would or could be listed. As I also noted, incidence reporting is 100% optional.

        Why are your friends looking over their shoulders? Do they expect drug dealers to track down a specific car they used to own and kill the people inside? I think your friends’ belief in urban legends is more worrying than that drug dealers once owner their car.

  8. Not to completely miss the point, but remember that guy who claimed he killed JonBenet Ramsey to get out of Thailand or wherever it was? I hope people remember, because the media sure dropped that story once they found out he was lying…

  9. I looked at the “Disclosure Statement” from the Sellers of the house we recently purchased. One of the lines read: “Lawsuits or legal proceedings (including foreclosures and bankruptcies) involving the Seller or threatening or affecting this real property.”

    I was curious, would “legal proceedings” include criminal investigation proceedings, or does that mean only suits in the courts?

    Oh, by the way, I would want to know if the house was believed to be haunted.

  10. Me too. I don’t believe in hauntings, but I also assume that there is always a small percentage chance that I am wrong. Between a house that is supposed to be haunted and one that isn’t, I’ll take the latter, thanks. I’ve seen too many movies.

  11. If I buy a house, I think I’d like to know if there’s a strong possibility of morbidly curious tourists, ghost hunters, fame-seeking psychics, documentary producers, or anyone associated with the History Channel showing up at my door from time to time.

  12. I agree with all of you. (Except re car fax). Our home is perhaps the biggest investment we will make in real estate terms. A later “ooopps, the rapper Iced Coffee is due out in ten years and it’s really his house” doesn’t do much for security.

    I think there needs to be a mandatory recitation of the previous owners of the house, and it should NOT be left to buyers to do their own research.

    If realtors are able or willing to to do this, then MAKE them…

    • Title searches already exist. Title insurance is required for pretty much all mortgages. It sounded above like you previously bought a house. Are you upset that you got to choose your title search company instead of relying on the seller to verify they are the legal owner of the house?

  13. “Legal” vs “ethical?” My fave. If the pipes have burst three times over the winter but are replaced and in great shape in April, and no mention is made of previous pipe problems, is that not deceit? And therefore unethical?

    If the walls were splattered with blood from a home invasion from two years prior, but are pristine now, and no mention is made of the home invasion, is that not also deceit? And also unethical?

    • In the first case it’s unethical and likely illegal. In the second case it is neither.

      If something actually affects the property it should be disclosed. Otherwise, it shouldn’t. This isn’t very complicated.

  14. TGT:

    I am NOT misrepresenting your position. According to you we should all move like lambs to the slaughter and buy what looks pretty… regardless of what history may have occurred there.

    All I’m saying is that social/criminal behavior is just as A PROPOS as water tables, chemical plants nearby, etc. etc. And that it is NOT up to US to fairly represent the property.

    That’s all, I’d buy a murder house if it was my dream house. but (1) I’d think twice about it; and (2) would expect the realtor (dreams do exist) to be honest with me.

    • And now it’s not worth arguing with you anymore. History only matters when it actually matters. You seem to think history matters whenever you want it to matter.

      Social behavior that does not have future consequences is in no way like physical data that has tangible consequences.

  15. TGT:

    Of course we had a title search. (30 years ago.) But the title search doesn’t ferret out all we’d like to know. All the title search does is actually “search” who had held the title from time imerorium, so no one can come back and say, “I actually own that property?”

    I think you’re grabbing at straws here. Let’s just let it go, and hope you don’t buy a house in Amityville any time in the near future.

    • A title search is a record of ownership. Title insurance (that comes out of title searches) guarantees the ownership information. That’s what you said you wanted to know. What information do you want? The geneology of the owners? Their food preferences?

      What relevant information is not provided?

  16. In this day and age where a person can go on line and check to see what crimes and have been commited in the neighborhood I see no reason to disclose it.

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