Posted by SandyFL on February 12, 2000 at 23:22:37:
Yes it IS grand! Having made some big dufus mistakes myself, and still made money, I am in complete agreement with you.
Sounds to me like this was a success story of another type. It’s just the “during” part had you sweating bullets. (no pun intended)
Mother and son’s murdered in property… - Posted by Lynn_Atlanta
Posted by Lynn_Atlanta on February 12, 2000 at 08:07:59:
This is a new one on me. We looked at a property in September 1999, and decided to pass because the seller wanted too much for it. In October 1999 the mother and two teenage sons were shot and killed in the property. The father was also shot, but he survived. The father has now recovered and REALLY wants to give us the house ?subject to?.
My question to the group isn?t concerning the numbers, but concerning disclosure to potential buyers. I would like to know what I ethically, morally and legally need to disclose. This isn?t a rural town where everyone in town would know the house based on it?s past, it?s Atlanta, Georgia where we have crimes like this on a regular basis, but there is no doubt that any new buyer will find out ?eventually? (from neighbors or something) about the houses past.
I would like to help this guy out, and there is some good equity in the property. What do I do???
Thanks!
Lynn
Unless it’s huge, let it go! - Posted by TRandle
Posted by TRandle on February 12, 2000 at 15:18:56:
That’s my opinion. I think you must have a huge return to justify the risk of taking on a murder house. I most likely will not do that again, and ours is only one person, not a family.
You have to disclose regardless of the rules if you consider yourself an honest person. How would you feel if you had been in Sandy’s shoes? The neighbors talk immediately. We tried to limit our knowledge of the event by demanding people shut up when they began to share the wonderful details. In fact, our handyman knew plenty after his first visit to the house thanks to a neighbor. Kids will tease the kids that move in. I can’t see how you “hide” this fact and sleep well.
Also, we’ve recently discovered that “Court TV” is running an hour episode on our house each month for the last few months. It’s strange knowing the details now and seeing your property on the television. Hopefully, our T/Ber’s haven’t seen it. The realtor who lives next door to the house called to inform us it was on the tube. Anyway, this is my long-winded way of saying let it go unless it’s absolutely huge.
Re: Mother and son’s murdered in property… - Posted by Bob H
Posted by Bob H on February 12, 2000 at 14:29:06:
Check with the Real Estate Commission in your state. In CO, you are not required to disclose, and I believe there is a state statute prohibiting damages from a lawsuit regarding non-disclosure of stigmatized properties.
Re: Mother and son’s murdered in property… - Posted by Eduardo (OR)
Posted by Eduardo (OR) on February 12, 2000 at 11:25:41:
Lynn–
Two comments: 1. Let’s suppose you live in the community where the house is. Let’s suppose you don’t disclose or only partially disclose. Let’s suppose the new owner finds out the truth and doesn’t like the fact that you didn’t tell them. Even if your locale doesn’t have a legal requirement to disclose the details, the upset people are going to bad-mouth you to others. What happens when you get a bad reputation? People aren’t going to want to work with you. In my town (60,000 pop.) there are several people with bad reputations garnered from shady real estate dealings. Nobody likes them or wants to work with them. Always tell the truth and disclose things that someone may not like. Better they hear it from you ahead of time than from somebody else later. 2. The good news is that disclosure shouldn’t slow you down. There are always people who will buy or rent anything. In 20 years of selling real estate before I retired, we sold property near the train tracks to retired railroad workers, property near the freeway to truckers, property near airports to pilots. I would make a game out of the “Murder House.” Tell people they can paint it “blood red.” Tell them it’s a natural for Halloween. Joke about it. But disclose! Honesty pays off. Good luck! --Eduardo
Re: Mother and son’s murdered in property… - Posted by steph in tex
Posted by steph in tex on February 12, 2000 at 09:55:55:
Hi Lynn
You do have to disclose any death that occured in the house–
but you really don’t have to explain all the grory details. You can simply state that someone passed away in the house.
However with it being more than one person- that might be a little tricky.
Also, there have been numerous threads on how murders have affected your ability to sell/market the property.
You might try searching with our new search feature for previous posts. Apparently it can make it difficult- I know TRandle has had some experience with this, and maybe he will respond too.
Good luck!
steph in tex
Re: Mother and son’s murdered in property… - Posted by SandyFL
Posted by SandyFL on February 12, 2000 at 09:14:05:
Oops. Forgot your original question. You said the magic phrases - good equity (how much?) and subject to. So, the question is, what are you doing reading this Lynn? Go get it!
Re: Mother and son’s murdered in property… - Posted by Sandy FL
Posted by Sandy FL on February 12, 2000 at 09:08:02:
I don’t know if there is any disclosure laws concerning this, but let me share my experience.
I found out my first house had a “unique history”, but not till after I bought it. [Son tried to keep mothers deceased body in the house so that he could continue to collect the SS checks. I think the neighbors reported a smell and then said son was forced to seek mental health assistance.] Haha This sounds like a Bill Gatten joke waiting to happen. I can’t wait to see what he writes 
My second house belonged to drug dealers. Again, I didn’t figure that out till really strange people kept coming up to the house at 1 and 2 in the morning looking for “Greg”. Also the drug paraphanalia (sp?) that was found when we cleaned the thing out. Mind you this was after we signed on the dotted line. And strange people came up to this house still for about 6 months off and one before they all finally figured out “Greg” was gone. I had put tenants in the house by then.
These are the kinds of things that neighbors do not tell you until you have put down the money and moved in, or are rehabbing it. Think about it, someone has to be pretty comfortable with you to tell you these gruesome stories. But to disclose it before purchase? I don’t think as a layperson you are under any requirement to do so. I will leave that part of your question to the lawyers. No one felt it necesary to disclose it to meeee …
Good Luck
SandyFL
Re: Unless it’s huge, let it go! - Posted by SandyFL
Posted by SandyFL on February 12, 2000 at 16:55:50:
If you saw below, I did ask Lynn how much equity we are talking about. I hope that it is WAAAY more than 10k, for what he is taking on.
But as far as for how I felt… well, the difference between what happenned in my house and what happenned in his house is huge.
Frankly, dealing with the contractor I had on that first house was scarier than any news of a corpse being left in there rofl. There was also a long passing of time, the mentally ill son let it go to foreclosure, then HUD had it for 6 or more months, until one of my RE buddies bought it and then flipped it to me. I doubt that my RE buddy even knew the history himself.
TRandle, I am sorry, I didn’t hear the entire story of your “murder house” experience. I guess I will use the new search feature and look back. What month(s)?
SandyFL
Thanks Sandy - Posted by Lynn_Atlanta
Posted by Lynn_Atlanta on February 12, 2000 at 09:47:28:
Don’t worry, I haven’t lost my mind yet :). I have an appointment to get the deed on Sunday!
Happy Investing!
Lynn
Re: Unless it’s huge, let it go! - Posted by TRandle
Posted by TRandle on February 12, 2000 at 19:00:55:
Sandy,
I’ve never posted all the details. The murder took place over 2 years before I bought the place. A realtor friend of my wife told us she was getting ready to evict the current tenants. We went back and forth several times changing the deal with the sellers (with their agreement each time).
The neighborhood is great, appreciating, and selling quickly. The house needed cosmetics, but being a newbie and having done 3 deals in the prior 3 months, I was getting a little coqky. The house’s ARV was at least 150k and we eventually settled on a 90 day L/O at $115k with $3,500 in prepaid rent (they initially wanted a 4k earnest money deposit). I was positive I could sell it and we did the “prepaid MLS” thing.
All I knew about the murder was that a female tenant who had been living there over a year with another female tenant and a male tenant, walked downstairs one morning and shot the male tenant while he was eating his breakfast. We put something to the effect of “tenant died on premises 6/97” on the disclosure papers. We couldn’t move it after many lookers and began doing repairs. Brilliant, huh?
I won’t go into all the details, but suffice it to say that within 30 days of closing, we had no buyers, no T/Ber’s, no renters, and had spent probably 10k including the $3,500 up front on a house we didn’t even own. Emotions and concern were high needless to say.
We did close on a 90% LTV NOO investor loan and rolled the $3,500 (changed the definition again) into the note and other closing costs. So, I don’t know all the exact numbers, but we were in for a loan of about 110k and 16k out of pocket. We put a 2nd on the property 3 days after closing based on an appraisal of 148k and pulled out 23k. We did finally find a T/B with a small down and a note for the rest of the total 5% option consideration prior to making the first payment. So, we pulled about 7k profit out and have someone else making the payments. So far, it’s worked out okay, but not one of those “let me post the details of this deal”.
Re: Unless it’s huge, let it go! - Posted by TRandle
Posted by TRandle on February 12, 2000 at 19:35:37:
Sandy,
Actually, it was all borrowed money (LOC), but it feels the same. I probably made several years worth of bad decisions on that deal but I learned much and seemed to have found a profitable way out. Then there was my sandwich L/O on a condo, but that’s a different nightmare. That’s why I get stoked about this business. I can screw up left and right, still learn, and still make a profit. Ain’t it grand?