First Time Buyers; Understanding Property Disclosures Part I
For most of us, when we hear the word, “disclosure” we assume it means “full-disclosure.” This is not always the case, particularly when we are talking about the Residential Property Disclosure Form AKA the Holy Grail of buying or selling a home. During this 3 part series we will unlock the secrets to the Property Disclosure series, so stay tuned!
All Holy Grail jokes aside, whether you happen to be a seller preparing to sell your home or a buyer scouring the disclosure forms for insight into the home of your dreams know this: everything you have ever wanted to know about the home may NOT be found within those pages.
While it is an important piece of the puzzle, in most states there are statutes that offer guidelines as to what should be included.
One of the most fascinating parts, for me, of being in the real estate industry is having the opportunity to tour MANY different types of homes. From the historically old to the luxuriously new, most homes have a story to tell.
If These Walls Could Talk
So maybe the picture is a little over the top, most stigmatized homes show nothing but A+ curb appeal coupled with standout interiors. Think the sociopathic, charming, handsome, too good to be true gentleman but in house form. At some point during the “looking” process with my prospective buyer clients, nearly all have asked this million-dollar question: What if someone died in the house? Would that be disclosed? Are the sellers required to tell us?
In Ohio the short answer is….not really, not quite. Clear as mud? With a stigmatized property, one where a violent murder, suicide or any other hostile event has taken place, the event would be considered a material defect by some buyers. That said it would be in both the Realtor and seller’s best interest to disclose the event to avoid a possible legal battle.
The best course of action would be for the seller(s) and Listing Agent to discuss the situation in-depth, and decide when to disclose. Of course the Realtor must have the consent of the seller(s) in order to disclose any information regarding the previous event. From a professional perspective, I would suggest disclosing the event to interested parties upon the second or subsequent showing, rather than publicly on the disclosure form itself, keeping looky-loos and nosy neighbors at bay.
In the Stambovsky v. Ackley Case, NY 1991, the stigmatized house case went all the way to the state supreme court. The Judges ruled in favor of the out-of-town purchaser, given the fact that the seller had previously advertised the home as haunted, had the home on a haunted walking tour, and also reported to Reader’s Digest as well as the local newspaper, the presence of poltergeists.
The exception to most other states is in CA, property owners are required to disclose the event if it has occurred within the last 3 years. In the remaining 49 states, caveat emptor, or" let the buyer beware is highly encouraged. In layman’s terms, do your own research in addition to asking questions of your Realtor, Google the address, the previous owner’s names, and the best source of information is usually the good old fashioned neighbors, particularly if you are an out of town buyer.
Some buyers (myself included) love a good story behind a home, after all, life is full of compelling stories, what’s not to love?