Home Buying in San Jose>Question Details

Dana White, Home Buyer in Menlo Park, CA

How much (% wise) does a death disclosure reduce sales price?

Asked by Dana White, Menlo Park, CA Tue Sep 30, 2008

My wife and I are considering making an offer on a home where the owner died of natural causes at 88. We are concerned that if we have to sell (relocate) within 3 years we will have to disclose. Any insight into how much % less we can expect. 0%, 5%, 10%, 15%. ?? A ballpark rule of thumb would do.

Your help is appreciated.

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The answer really depends on the market at the time you sell. Compare it to a more common question - a home on a busy road compared to the same home inside the neighborhood. In seller's markets, the discount approaches zero, in buyers markets with tons of inventory, the home is completely dismissed unless its at a dramatically low price (could easily be 20%). So, timing is crucial when selling a home that has an obvious negative.
With your home, because it is not a "violent" death - the disclosure laws sunset after a specific amount of years. Although beware, even though you may not be required to disclose, a buyer could still sue you (they may not win) if they find out from your neighbors after the closing.
The main discount comes when you are buying the vacant home that the owner just passed away in. You will be selling in a completely different situation. Negotiate as hard as you can and sell in a strong market. You may do better than your neighbors in price appreciation.
0 votes Thank Flag Link Tue Sep 30, 2008
Mario Pinedo,…, Real Estate Pro in Beverly Hills, CA
MVP'08
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Hello Dana,

You should know about Civil Code 1710.2. It states " No cause of action arises against an owner of real property or his agent, or any agent of a transferee for failure to disclose the occurrence of an occupant's death upon the real estate or the manner of death where the death has occurred more than three years prior to the date the transferee offers to purchase..." Civil Code Section 1710.2 does not actually require disclosing a death on the premises within the three years before the sale. However, many agents feel that such disclosure is implied by the statute and they should disclose death by murder or suicide within three years of the sale. After three years, an agent need not disclose a death or the cause of death of a prior occupant. To answer your question it should not decrease the value of the home since it was a natural death.

Trisha Motter
REALTOR®, e-PRO, SRES
1 vote Thank Flag Link Tue Sep 30, 2008
This is a good question, it is true that a death in the home can dissuade some buyers from making offers, but for most buyers it will not affect the price at all. Depending on the demand a death can limit your buyer pool, and in an area where multiple offers are still the norm you may find less offers, which will impact how much you can leverage the sales price. Keep in mind that you may be buying the home at a discount because of a death in the house, if so you will be selling it and roughly the same discount which will make the death a wash.

More important then a death on the house is the homes location, market conditions, as well as other variables that could put pressure on home prices in the next three years. Good Luck!
1 vote Thank Flag Link Tue Sep 30, 2008
Depends on the cause of death. A "peaceful" death has a less impact than a murder and/or suicide. According to a study by two business professors at Wright University, houses where murder or suicide have occurred can take 50% longer to sell, and at an average of 2.4 percent less than comparable homes. Read more at: http://www.legalzoom.com/everyday-law/home-leisure/ghoul-dis…

To get help answering the question, "Has someone died in your house?” Go to http://www.DiedinHouse.com.

Using a valid U.S. address, Died in House â„¢ instantly searches millions of records to determine if a death has occurred at that location. Go to http://www.DiedinHouse.com.
0 votes Thank Flag Link Mon Jun 3, 2013
Hello Dana. While your question is certainly a good one, I think that there's no definite answer as it involves projecting the future. You can't ask for a discount now because of something that may or may not be an issue when you sell. While the fact that a death occurred in the house has to be disclosed for 3 years, whether or not this will be an issue will depend on the potential buyer pool and also whether you will sell within the 3 year time period. It is true that a death on the property can be an issue for certain people, but how concerned you should be will depend on whether the most likely buyer in that neighborhood will be turned off by that fact. I think a buyer who is concerned about a death in the home will just not buy the house at all, rather than buy at a discount. Thus, I think you'll possibly have to deal with a smaller buyer pool, but not necessarily a discounted value issue. This is similar to someone who will only buy a house that meets certain Feng Shui criteria. If the house does not meet those criteria, then the buyer will just not buy rather than buy for a lower price.

If you truly plan on selling again within the next three years, I'd be more concerned about not being able to break even just because I doubt that the property will appreciate sufficiently in the next 3 years.
0 votes Thank Flag Link Tue Sep 30, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
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