Deceased owner property - deal or no deal

[Louis Van Der Westhuizen]

Hello BP

I'm looking at a probate short sale and the estate is saying the owner passed away in the house. I know that this is something that would need to be disclosed if I flip this property. Would you do this deal or walk away? I'm certain many buyers would be turned off knowing someone died in the home. Anyone have experience with this type of situation? 

[Jennifer Ryan]

If the death were from natural causes say, an illness, most buyers won’t care. So purchasing the property would depend on the circumstances of the death.

In most states you only have to disclose a violent death like a murder or suicide or death resulting from a defect in the property. I’m in Texas so it may be different where you are.

Here’s the rundown & I’m paraphrasing: you have to disclose anything that would cause a “prudent” buyer to not want to buy a property I.E., a violent death like a murder, could mean that the neighborhood is bad or say, the home owner was electrocuted. There could be faulty wiring.

If you know that someone passed away from natural causes though, you may not lawfully have to disclose it, but you might anyway because I can guarantee you that if the neighbors know about it, they will tell the new occupants.

Lastly: there’s something called a “Stigmatized Property.” Google it. In most states, you have to disclose a stigmatized property. In a nut shell, it’s a property that has notoriety attached to it. An example would be a property where everyone in town thinks it’s haunted.

A longwinded answer but I hope it helps.