Buying with death in the house

[Nhi Nguyen]

Hello BPers.

For me, buying properties with natural death is not a problem.

What about other causes/accidents like fire or tree falling, etc …, assuming no foul play or crime?

Would you buy (either for holding or flipping) it? If you would, how much discount you’d anticipate if flipping within the 3 years of the death?

I know it would definitely affect the pool of buyers. But I’m not sure about pricing. I’m guessing I’d plan for accepting offers at 5-10% lower than usual.

Thoughts?

[Leo R.]

@Nhi Nguyen I believe that the laws about deaths in properties vary from state to state (and I'm not familiar with these laws).

From an investment standpoint, if the death in the property demonstrably lowers the property's value, then yes--I'd either offer less, or just avoid the property entirely.

From a personal comfort standpoint, people obviously have widely varying reactions to deaths in properties...some people would be completely unwilling to buy or live in a house where a death occurred, and other people don't care.

Personally, I've lived in old houses all my life, and I presume that people have died in those houses (it's almost a statistical certainty for a 120+ year old home)--and it doesn't bother me at all.  

However, I recently experienced a situation with a death in a property I had under contract, and it affected me completely differently than I would have expected.

The house was my dream house, and I had been under contract for a while; we had just finished the inspections, and everything was going smoothly. One day, my agent and I went to the house to do a walkthrough, and we happened to run into the seller's daughter (a recent college grad who had been living in the house, and was moving out). We talked with her for about 10 minutes, exchanging pleasantries and discussing the house and the neighborhood--she seemed really nice.  Tragically, that night, she committed suicide inside the house (self-inflicted gunshot).

I reacted to this situation very differently than what I would have expected--it shook me up pretty badly, and I just couldn't see myself owning the property (much less living there). For me, it turns out that I react completely differently to knowing someone (who I had met) died tragically and violently in the house, versus the more abstract assumption that someone has died in the house in the past (again, I've always lived in old houses that probably had deaths, and that doesn't bother me).   ...In the end, we canceled the contract on that house, which is no picnic in any situation--much less a scenario like that... 

Real estate investing is a roller coaster, and all sorts of things (good and bad) occur that no real estate book or podcast or forum post can really prepare you for... but, moral of the story: when it comes to deaths in properties, it's definitely worth thinking about--because people have very wide-ranging reactions to it (everything from complete indifference to complete unwillingness to have anything to do with the house). If the death was violent or especially tragic in nature, it might have a particularly negative effect on peoples' willingness to buy the house or live in the house...

Hopefully that provides some context...