Disclosure of info while selling a house

[GoVanGogh]

The house next to us is in foreclosure and went on the market this week. Today alone, I have been outside while three people stopped by to look at the house. So far no one has walked over to ask me about the house or the neighborhood, but I figure it is only time before someone does. I want to be prepared and could use some info and/or wisdom.

 

1.) If a house is sold in foreclosure, does the owner/bank have to reveal negative information, like that the house is a former drug house and a young kid died of an overdose in the house?

 

2.) If it doesn't legally need to be disclosed, but you know what happened and a potential buyer asked you about the house, would you tell them?

We live in a small neighborhood where everyone knows everyone. If someone bought it w/o knowing it would only be time before they did find out.

 

3.) Would your opinion change if someone is buying it to fix up and flip instead of buying it to actually live in?

 

Thanks in advance.

[~Amanda~]

disclosure is not required in forclosure.

 

i would worry about sharing info that might bring property value down, that would reflect on your prop value

 

sorry nak

[mommaduck]

I would think that disclosure would have to do with things actually wrong with the house, not wrong with the previous owners/tenants. I'm also not sure how someone dying in a house has anything to do with the new owners. *puzzled*

[LibraryLover]

Do you want that house to sell, and for a good price? Bad things happen in homes sometimes, but you really don't want to devalue your own property because of bad tenants. The realtors are not breaking any law, in fact.

Edited March 10, 2011 by LibraryLover

[regentrude]

Depends on the drugs.. if it was a METH house, they should be required to disclose because of the residue that will harm the subsequent buyers. (But I am not sure whether they actually ARE required)

 

If the tenants were just drug users, or if a kid died - that is nobody's business. Doesn't have to do anything with the house.

[GoVanGogh]

I'm also not sure how someone dying in a house has anything to do with the new owners. *puzzled*

We were told by the detective that worked the case that deaths/drugs were part of the "house history" and would legally have to be disclosed, but we have not been able to confirm that. I know two people IRL that are in the real estate business - one says that is true, the other says it isn't. I was hoping someone here could cite the law, if it is true.

 

Depends on the drugs.. if it was a METH house, they should be required to disclose because of the residue that will harm the subsequent buyers.

Meth and heroin. Meth was just used in the house, not manufactured, if that matters.

 

i would worry about sharing info that might bring property value down, that would reflect on your prop value

Oh, I'm not really worried about property values at this time. We live in an affluent area and simply having the jerk homeowner kicked out of the house improved our property values. :tongue_smilie:

[In The Great White North]

I suspect the law varies by state, but it would always apply to the seller, not the neighbors.

[DawnM]

I thought you had to disclose a death in the house.

[Lawana]

We had a somewhat similar situation in our neighborhood, where a man committed suicide in the basement. The house was bought sight unseen from out-of-state customers. When they found out about the suicide they were pretty upset. If I was buying a house, I would want to know the facts you have mentioned.

[happypamama]

I know less than zero about meth, drugs, and residue, but in the two states where I've sold houses and worked in real estate, drugs were not part of the disclosure; it just includes known material defects. If there is damage from meth, that might need to be disclosed; I just don't know enough to know what kind of damage that might be. However, foreclosures often do not have disclosures. I'm not sure about the drug use death either; I don't remember ever seeing anything like that on any of the listing information for any of the houses my office sold. It may depend on your state; disclosures aren't even required in all states, so the other info may vary as well.

 

I would not personally discuss the house's history or anything with potential buyers unless I was directly asked. That seems like it could leave you open for potential trouble with the bank that's selling the house.

[elegantlion]

I suspect the law varies by state, but it would always apply to the seller, not the neighbors.

 

:iagree:

We bought a foreclosure in last fall. It was unoccupied and we suspected some of the activity that had taken place. Since we moved in we've had several neighbors tell us this was a former drug house (we weren't surprised) and that the basement had repeatedly flooded. That explained the new concrete floor and sump pump in the basement. It does not change my feelings about the house.

 

I wouldn't be rushing to tell people what the activity was. In this market so many people are used to foreclosures they may not be looking for background info.

[Happy]

I'm a licensed real estate agent in Texas...part of the what are you going to do after homeschooling group...I'm still new so...

 

Meth production MUST be disclosed in a 'normal' home sale.

 

Death...natural causes--someone dying of a heart attack or cancer in the house does not have to be disclosed. .

 

Here's the line in the official Seller's Disclosure Notice Does the seller know of...Any death on the Property except for those deaths caused by: natural causes, suicide, or accident unrelated to the condition of the Property.

 

However, in a foreclosure, it's what you see is what you get. No disclosure, no fixing, no history. It's let the buyer beware.

 

The fix and flip folks do a good service to the community. They take property that is in horrible shape and make it liveable again. FWIW, I sold my mom's home to a fix and flip fella...my mom had been ill, her husband couldn't keep the property up, we couldn't get in to work on it...plus a boat load of family issues. A few years later I was in that town again and stopped to talk with the new owners who bought from F&F. The house LOOKED great. My mom would be so, so, so happy to see her home being used and loved and cared for again.

 

There's a distressed property down the street from me. I wish I had the $ to get my hands on it to fix and flip. I'd love to have good neighbors again.

[RanchGirl]

I would guess the bank is selling it "as is" and not disclosing anything. The realtor may not even know any of the history. If someone came up and asked me about the history of the house, I would tell them the truth. They may be your future neighbors and you don't want them to feel they were misled by you. If they do talk to you, they are more likely going to be asking about the neighborhood in general rather than trying to get info on the house history, so it may not come up, though you can certainly say that you are looking forward to some nice friendly family moving in there because the last residents left a lot to be desired. )

 

However, I wouldn't consider it my responsibility to put up a flyer or stand on the porch with a megaphone when buyers drive by.

[GoVanGogh]

If someone came up and asked me about the history of the house, I would tell them the truth. They may be your future neighbors and you don't want them to feel they were misled by you. If they do talk to you, they are more likely going to be asking about the neighborhood in general rather than trying to get info on the house history, so it may not come up, though you can certainly say that you are looking forward to some nice friendly family moving in there because the last residents left a lot to be desired.

That's it - I don't want anyone to think I misled them, if asked. I am struggling with what is ethical to say or not say. I do like the suggestion of simply saying that we are looking forward to having nice neighbors.

Thing is. I'm still so shaken up by the events. We had someone drop by our house last month looking for the former neighbor. I felt like I had been kicked in the stomach and went white as a ghost. The guy could tell instantly that he had frightened me and kept apologizing. I shook for an hour after he left. So I'm worried if someone does come over that I want to be prepared. If I know they know - or will know - it is one thing. But if they don't know and probably won't know, well - I'm certainly not going to say anything. But if I have a flashback like last month, they will know something is amiss. :001_huh: I need closure badly right now, so am praying the house is sold quickly and to a lovely family.

 

However, in a foreclosure, it's what you see is what you get. No disclosure, no fixing, no history. It's let the buyer beware.

Good to know that. Thanks. I will brace myself with the knowledge that they won't know.

 

The fix and flip folks do a good service to the community. They take property that is in horrible shape and make it liveable again.

I would love for someone to fix/flip this house. It is a nice house. That last few years, notwithstanding.

 

I'd love to have good neighbors again.

Amen.

[sewingmama]

I would tell them - if it doesn't matter to them they will still buy it - if it does matter then you won't create hard feelings if they buy it, find out and then wonder why you didn't tell them.

 

FWIW -I would not buy a house that had drug activity in it. I once lived in a home which had had previous drug activity (growing and using). Months after the previous tenant left there were always "shady" people knocking on the door looking for him because they didn't know he moved etc. I hated answering the door to those types of people - plus what if one tried to break in one night because they thought previous tenant still lived there and they wanted payback or something (I"ve seen it happen).

 

Also the house itself had a lot problems that were not at first evident because drug usuers are not always known for their cleanliness. Our pest control bill was huge, we ended up ripping out the carpets to find "you-don't-even-want-to -know" under them. Loose tiles in the roof where people had broken into the house and later collapsed under heavy weather etc etc etc.

 

One time when I was out the backyard doing some weeding - the cops pulled up and came around the side of the house. I only saw them out of the corner of my eye (didn't realise they were cops just thought they were more crazy drug people looking for previous tenant) and sprang up and raced into the house where my DH was. The cops thought I was a "running suspect" and charged through the house after me. My DH was very bewildered at the scene he witnessed but managed to convince the cops it was only his "freaked out wife" who had run into the bedroom and locked the door and that I was not in the room "stashing stuff" :001_huh: The cops were also looking for the previous tenant and took a lot of convincing that we were just new tenants who had no connection or any idea where previous tenant currently was. They searched the house before they left - talk about an invasion of privacy.

 

So yeah - no more houses with drug histories for me.

[OrganicAnn]

It can be very expensive to clean up a Meth house. It might vary by state about what has to be disclosed.

[elegantlion]

I would tell them - if it doesn't matter to them they will still buy it - if it does matter then you won't create hard feelings if they buy it, find out and then wonder why you didn't tell them.

 

FWIW -I would not buy a house that had drug activity in it. I once lived in a home which had had previous drug activity (growing and using). Months after the previous tenant left there were always "shady" people knocking on the door looking for him because they didn't know he moved etc. I hated answering the door to those types of people - plus what if one tried to break in one night because they thought previous tenant still lived there and they wanted payback or something (I"ve seen it happen).

 

Also the house itself had a lot problems that were not at first evident because drug usuers are not always known for their cleanliness. Our pest control bill was huge, we ended up ripping out the carpets to find "you-don't-even-want-to -know" under them. Loose tiles in the roof where people had broken into the house and later collapsed under heavy weather etc etc etc.

 

One time when I was out the backyard doing some weeding - the cops pulled up and came around the side of the house. I only saw them out of the corner of my eye (didn't realise they were cops just thought they were more crazy drug people looking for previous tenant) and sprang up and raced into the house where my DH was. The cops thought I was a "running suspect" and charged through the house after me. My DH was very bewildered at the scene he witnessed but managed to convince the cops it was only his "freaked out wife" who had run into the bedroom and locked the door and that I was not in the room "stashing stuff" :001_huh: The cops were also looking for the previous tenant and took a lot of convincing that we were just new tenants who had no connection or any idea where previous tenant currently was. They searched the house before they left - talk about an invasion of privacy.

 

So yeah - no more houses with drug histories for me.

 

OMG, how horrid. someone had tried to flip our house after the drug house had been shut down. Fortunately we haven't had anyone knocking at the door, they probably quit coming when it was being flipped.

[H.S. Burrow]

The house next to us is in foreclosure and went on the market this week. Today alone, I have been outside while three people stopped by to look at the house. So far no one has walked over to ask me about the house or the neighborhood, but I figure it is only time before someone does. I want to be prepared and could use some info and/or wisdom.

 

1.) If a house is sold in foreclosure, does the owner/bank have to reveal negative information, like that the house is a former drug house and a young kid died of an overdose in the house?

 

2.) If it doesn't legally need to be disclosed, but you know what happened and a potential buyer asked you about the house, would you tell them?

We live in a small neighborhood where everyone knows everyone. If someone bought it w/o knowing it would only be time before they did find out.

 

3.) Would your opinion change if someone is buying it to fix up and flip instead of buying it to actually live in?

 

Thanks in advance.

 

 

You should check the laws in your state. It is possible that you could be held liable for disclosing information about the property that interferes with the sale of the property.

 

I know that at one time we were purchasing a for sale by owner. The home was a rental and the couple living in it were only there because their house sold and their new constuction was not complete. She cautioned us to "look very carefully" while looking down at the floor. She couldn't by law disclose anything *without proof*. Well, we did, but it was covered with boxes at the time. After we moved in and had the boxes unpacked, it was VERY obvious that there were major foundation problems.......there was a raised ridged running under the kitchen floor!!

 

I am thankful to this day that we were told to "look very carefully", but my point in all of this is that you should protect yourself!!!

 

I don't know if telling them the house was a drug house and someone died in it would fall into this category, but I would do my legal homework before making any comments to potential buyers. Maybe you suggest that in doing their research they ask for any police reports pertaining to the property.

[Mom0012]

I would think that disclosure would have to do with things actually wrong with the house, not wrong with the previous owners/tenants. I'm also not sure how someone dying in a house has anything to do with the new owners. *puzzled*

 

I think this is true most of the time, but I would be very reluctant to buy a former drug house because who knows who might come knocking on the door? That would worry me.

 

Lisa

[Dobela]

The house next to us is in foreclosure and went on the market this week. Today alone, I have been outside while three people stopped by to look at the house. So far no one has walked over to ask me about the house or the neighborhood, but I figure it is only time before someone does. I want to be prepared and could use some info and/or wisdom.

 

1.) If a house is sold in foreclosure, does the owner/bank have to reveal negative information, like that the house is a former drug house and a young kid died of an overdose in the house? The bank likely has no histories on the house. Foreclosure homes are sold as is, where is. Our realtor asked us to consider having a place inspected before making an offer instead of the typical afterward because buying a foreclosed is a like buying a giant mystery box.

 

2.) If it doesn't legally need to be disclosed, but you know what happened and a potential buyer asked you about the house, would you tell them?

We live in a small neighborhood where everyone knows everyone. If someone bought it w/o knowing it would only be time before they did find out. I would be honest. I would appreciate the knowledge you have to share. And that includes knowing that the backyard floods in a rainstorm or that they just had the ac replaced last summer. We actually tried to buy a foreclosure in a particular neighborhood. They neighbors were just delightful. So much so that even though we lost in a bidding war on the forclosed home, when another home on the street became available we bought it. All beacuse of the good neighbors.

 

3.) Would your opinion change if someone is buying it to fix up and flip instead of buying it to actually live in? I like that idea. Especially if they do it well. My dad has done that on occassion to earn extra money. There are great people who don't have the knowledge or the money to fix up a home but would make great neighbors. Let someone fix it up and wait for the great neighbors.

 

Thanks in advance.

 

So yeah - no more houses with drug histories for me.

This must have been a rental with no down time between tenents. Our last home was a drug dealers home. Well, the owner wasn't, but his son was pretty notorious and stayed in lots of trouble. The neighbors have exciting stories to tell of pipe bombs and AFT agents. After the dad died, the son was arrested and jailed, the house then went to estate and was vacant for several months before we bought it from the sister. We lived there 9 years. In that time only one person came to the home looking for the son - and it was a man that had been in prison and didn't know the dad had died and the son was in a prison in another state.

 

We did have to call police when we found a stash of pipes and unusual plants began growing about the yard. They also told us much more of the colorful history of the home.

 

We dont' regret living there, and if circumstances were right, I might do it again.

 

However, it is it a known fact that meth was produced in a home, I would not want to buy it. I am in Arkansas and if meth was produced in a home, it is considered hazardous and can be condemned. Children who are removed from meth producing homes by CPS are not allowed to bring any toys or clothing with them because they are considered to be toxic and dangerous. Production releases deadly chemicals that are absorbed by the walls, floors, and so on of the house. There was a well publicized article (cnn or fox??) several months ago about a family who bought a house that was known by authorities as a meth house. It cost them their health before they found out and the cost to repair was going to be more than they paid for the house. It was an awful situation

[Dobela]

I would think that disclosure would have to do with things actually wrong with the house, not wrong with the previous owners/tenants. I'm also not sure how someone dying in a house has anything to do with the new owners. *puzzled*

When we were house hunting there was one house that we loved. The realtor said that according to our state laws he must inform us that a man died of natural causes in the house. He was elderly and alone when a different realtor came to the home to show it and found him sitting in the kitchen deceased.

 

It didn't bother me, but apparently for some people this is 'bad karma' or something. According to our realtor some people have expressed religious reasons for not buying the home after learning this, some were creeped out, and even a couple refused to see it when he disclosed this before taking them there. Some realtors won't even show the home for similar reasons. Sad really to me.

 

If the person died of an overdose in the home that is just so tragic. But I also wouldn't automatically assume the worst about the home or that it was a heavy drug selling home.

[missmoe]

I know in CA banks are required to disclose nothing --other than termite damage! :tongue_smilie:

 

As a neighbor asked about the history of the home, I would say something along the lines---oh, we would be so happy if a nice family like you bought the house. It needs a nice family. That would be it. No need to say anything else. What would it really accomplish to share the rest of the info?

[GoVanGogh]

Just an update:

Federal and local drug agents were at my house today, regarding my former neighbor and his knowledge/involvement in the teen's death.

At the end of their questioning, one of them said, "The house is in foreclosure. If someone asks you about the house, ethically you need to tell them. It is going to be in the news soon and going to trail and it will be on public record what happened here. For the sake of being a good neighbor, you need to go ahead and disclose what you know." :tongue_smilie: I was talking with the neighbor on the other side tonight and she said she already had one real estate agent come over and ask her about the property. Think I will just stay inside until the house sells.

 

(On a homeschool note: One of the agents told me I was wise to homeschool in this "top-ranked" school and he would never put a child in this district. So, there. My homeschool is endorsed by the feds.:001_huh:)

[newlifemom]

Glad you were able to get the info you needed.

 

I will say that I wished someone would have disclosed to me that the house we purchased was outside of city limits. I found out about 5 min prior to closing and had no idea what that meant so didn't think to push the matter. Now, 6 months later with terrible water service and only being allowed one adult book out of the library at a time, I would have appreciated this knowledge much sooner. I don't know that I would have changed my mind, but I do feel a bit swindled.

 

FTR, because of this and many other issues, I will never recommend that realtor. :glare:

[Sparkle]

Stigmatized Property

 

Duty to Disclose: Selling Stigmatized Property

[Tap]

If someone asks you a question, and you answer truthfully and with only fact based information, I can't imagine you could be held liable for an sales issues. If you approach people and start making the story more that it was....then I could see a potential problem.

[StephanieZ]

I think that you have a moral obligation to fess up if you meet prospective buyers.

 

The Golden Rule, right?

 

How would you feel if a family bought it. . . and their child ended up harmed by some drug residue they hadn't thought to search or test for?

 

I know that if I were considering such a purchase, I'd use much more diligence cleaning, testing for residues, etc both before and after the purchase.

 

Do the right thing. You know what it is or you wouldn't have posted.

[Impish]

From what I learned from my Mom when she was in real estate, yes, there would have to be full disclosure. In that province, anyways.

[Gooblink]

What I understand for TX is that foreclosures do not require seller's disclosure.

 

As for death on the property, it's required to disclose (on normal sale, not foreclosure) when the cause of death was attributed to some aspect of the property itself. (again, TX...don't know about other states)

 

If a prospect asked me about the place next door, I'd simply answer honestly based on my first hand observation or what is public record.

[Guest Kurt01]

It is always advisable to give the task of selling house to a highly experienced and talented real estate agent. A real estate agent will be aware of all the formalities that should be followed while selling a house and he will also be up to date with the news laws implemented by the government.

[Miss Sherry]

We were told by the detective that worked the case that deaths/drugs were part of the "house history" and would legally have to be disclosed, but we have not been able to confirm that. I know two people IRL that are in the real estate business - one says that is true, the other says it isn't. I was hoping someone here could cite the law, if it is true.

 

Meth and heroin. Meth was just used in the house, not manufactured, if that matters.

 

Oh, I'm not really worried about property values at this time. We live in an affluent area and simply having the jerk homeowner kicked out of the house improved our property values. :tongue_smilie:

Years ago, we had made an offer on a house, and after we had already made the offer, the real estate agent called and told us that the owner had killed herself in the house. The bank required him to tell us. The bank said it had to be disclosed because it was the law. The idea of living in the house after that really bothered my dh. He thought it would bother our children if they heard it from the neighbors, which they probably would have. We backed out of the deal.

It did affect the value of that home. It was on the market for a substantial discount.

This was in the state of Oregon. Perhaps the laws vary from state to state. Also, it was years ago, so the law may have been revised. I have no idea.

Edited March 31, 2011 by Miss Sherry

[Miss Sherry]

The house next to us is in foreclosure and went on the market this week. Today alone, I have been outside while three people stopped by to look at the house. So far no one has walked over to ask me about the house or the neighborhood, but I figure it is only time before someone does. I want to be prepared and could use some info and/or wisdom.

 

1.) If a house is sold in foreclosure, does the owner/bank have to reveal negative information, like that the house is a former drug house and a young kid died of an overdose in the house?

 

2.) If it doesn't legally need to be disclosed, but you know what happened and a potential buyer asked you about the house, would you tell them?

We live in a small neighborhood where everyone knows everyone. If someone bought it w/o knowing it would only be time before they did find out.

 

3.) Would your opinion change if someone is buying it to fix up and flip instead of buying it to actually live in?

 

Thanks in advance.

You may want to ask yourself, if you were the buyer and asking a neighbor about a house, how you would want to be responded to. The reason I say that is, if someone does that, and then becomes your neighbor, you may see them in the neighborhood on a regular basis for a long time after that. If you really dread speaking to someone about a house if anyone does knock on your door to ask, maybe it's best to just not answer the door. That way you won't say something or leave something out that they may resent you for later. I really doubt anyone will knock on your door to ask anything. Several houses near ours have sold since we've been here and I haven't seen any of the new owners talk to any of the neighbors first.

Edited March 31, 2011 by Miss Sherry

[AuntieM]

Depends on the drugs.. if it was a METH house, they should be required to disclose because of the residue that will harm the subsequent buyers. (But I am not sure whether they actually ARE required)

 

If the tenants were just drug users, or if a kid died - that is nobody's business. Doesn't have to do anything with the house.

 

Missouri law requires disclosure of meth operations on a property for sale. I imagine that even in a foreclosure, things like meth cooking, lead based paint and asbestos must be revealed. You might want to check if your state board of realtors has a web site that might address this. Also, if you call the mortgage department of your own local bank, they may be able to tell you.

 

FWIW, I would be very upset to know that someone had died in the house in a terrible way. On our last house hunting expedition our agent kind of pointed out some negative things about one of the houses on our to-view list, and we ended up not touring it due to it's not so good location. Only later did we learn that a young boy had been locked in a closet and starved to death there.