Question: I've recently purchased our first home. I was told by my agent that the previous owner had died on the property, cause was unknown. Fact is -- according to the neighbors -- he committed suicide with a gun right next to the entry door. My wife and I are deeply disturbed by this and wonder why such a violent death was not disclosed by the seller and the agents?

Answer: In your example, the house is physically fine but -- if the neighbors are right -- there was a suicide on the property. Homes which have been the scene of suicides or murders are said to be "stigmatized" and around the country there have been different approaches to this issue.

Depending on your state, a stigmatized property law might require disclosure for some acts, but not others; require disclosure for so many years; or forbid disclosure. Some states do not have stigmatized property laws and in such jurisdictions the matter is unsettled. Thus, what is required of an owner or broker varies widely by state. It may well be that no disclosure is required in this case.

Question: My husband owns a rental property with his sister and brother-in-law. We would like to purchase our first home by buying-out the in-laws. They claim the property is worth $490,000 but the comps state between $429,000 to $465,000! How do we solve this problem.

Answer: First, unless there is an agreement requiring a sale, the in-laws have no obligation to sell, so you need to make the transaction attractive. Second, whether the home is sold or not, you'll want to maintain good relations with your in-laws.

Try this: Ask if they would accept an estimate of market value from a licensed appraiser, someone selected jointly by the two parties. A more complex approach is for each party to pick a licensed appraiser and then accept a value midway between the two estimates.

If possible, have a lender recommend an appraiser -- then, if the house is quickly financed or refinanced you may not need another appraisal.

Question: I am a real estate agent. I am making an offer for my buyer. I agreed to give him some credit back in escrow if the seller agrees too sell the property. Now, is there any maximum amount of money that a agent can credit to the buyer? If so, how much is it?

Answer: You agree to give credit back from what? You are an "agent" or salesperson, the buyer brokerage agreement is actually between your broker and the purchaser. You will receive no money at closing -- the buyer brokerage commission goes directly to the broker. So, first, is your broker willing to provide a credit to the purchaser at closing?

Then, is the lender aware of this credit and its source? Some loan programs, but not all, allow for "seller contributions" such as a credit at closing from the owner, perhaps 3 to 6 percent of the sale price. You, however, are not the seller so the question needs to be whether the lender will allow a credit from your broker to the purchaser. As long as it is disclosed and no repayment or interest is required, this should be acceptable to most lenders because no additional debt or monthly cost is being created. However, there must be disclosure to the lender in advance of closing.

Lastly, by any chance is the property also listed with your broker? If yes, what written disclosure must be provided to the property owner in advance? What permission is required from the owner, if any?

Question: We have a problem with our recently purchased home for which we used a real estate agent. I understand there is a company that regulates real estate agents that I would like to discuss the problem with to determine any possible alternatives. Do you know this company's name and contact information?

Answer: There is no "company" which regulates real estate brokerages or their salespeople. Instead, each state has a real estate commission or department which issues licenses and sets standards for brokers and salespeople. For a list of state regulatory agencies, see: www.arello.org.

If you are dissatisfied with the services provided by a salesperson, your first step should be to sit down with the individual and his or her manager to discuss the matter. It may be that your concern is with the former owner, covered under a re-sale warranty, or outside the broker's responsibility.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.

Published: July 18, 2003

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