As real estate agents, it's our duty to disclose any and all features of a home that may affect its value in the eyes of the buyer. This naturally includes telling buyers about material flaws like water damage or deteriorating roof shingles, but full disclosure can also include non-material elements like violent or illegal acts that have taken place on the property. While a home's sordid past may not affect it structurally, its perceived value could be reduced due to the stigma it's acquired.
Laws vary state by state regarding what types of incorporeal blemishes must be disclosed to the buyer.
In states where a death isn't on the list of mandatory disclosures, the real estate agent is faced with a moral quandary. If he tells the buyer about the event, she may back out of the sale or demand a price reduction. Neither scenario will leave you with a happy seller.
If you decide not to tell the buyer about the death, she could end up suing you for misrepresentation, in addition to dragging your reputation through the mud. Word of mouth carries a great deal of weight in our industry, so it's important to be honest and responsible with both parties of the transaction.
There's also your conscience to think about. As agents, while our main priority is our clients, we also owe it to the buyers to be forthcoming about the history of the home, and to provide them with enough facts so they'll be able to make an informed decision.
A large number of agents make it their rule to not disclose immaterial flaws unless asked directly about them. This can be a risky decision, particularly if the home was formerly used for something illegal like a meth lab. In a case like this, the home may be nearly new and in great condition, but the buyer's safety could be at risk if for instance, a drug addict comes to the house looking for a hit. Particularly if the buyer has children, the house's past could have a huge impact on their decision to buy the home.
A death in a home can be a particularly tricky situation for an agent to deal with. Death from old age or from a non-contagious illness seems to have less of a stigma attached to it, but the situation can still spook some buyers. If the death was a suicide or a murder, buyers may have a much more difficult time shaking off their unease.
Many people believe that dark energy can remain in a home after a violent death, and they fear that it may harm them somehow. There's also the idea that a haunting can occur if a person dies prematurely, and very few buyers want to live with an angry ghost.
If you tell buyers about a grisly event that's taken place on the property, they may very well back out of the sale. This isn't good for you or your client, but you'll be able to sleep well at night, knowing that you were honest. If the buyer decides to buy the home despite the violent event, then they're doing so with all the facts in hand. You won't be responsible for any buyer's remorse, and you won't be putting yourself at risk for charges of misrepresentation.
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