How do you sell a home with an unsavoury backstory? Some pundits will caution “Buyer beware,” but I recommend that you fess up.
Nineties TV buffs will probably remember Marge Simpson’s brief foray into real estate, which saw her offload Springfield’s “murder house” onto the Simpsons’ unsuspecting next-door neighbours, Ned and Maude Flanders. After closing, Marge was tormented by her ethical duty to tell the Flanderses about the home’s sketchy past, but was urged to keep quiet by her broker.
Sure, it’s a cartoon but, believe it or not, this is a situation that has grounds in reality. Recently, the Toronto Star and other city media outlets have been following the story of the so-called “murder house” at 934 Ossington Ave., which took nearly two years to sell. The challenge was finding a buyer who didn’t mind the house’s ghastly history. Eventually, though, someone bit.
News junkies are fascinated with stories like this—sensational cases make great reads—but most would never entertain a purchase like this themselves. Would you buy a house in which somebody was brutally murdered? What about an accidental death? A disputed legal history? What if your charming present-day duplex sits on the grounds of an old strip club?
A subsection of prospective buyers probably couldn’t care less, and their easygoing nature might result in them scoring their future home at a greatly discounted price. (A house somebody has been murdered in will sell for less than fair-market value, no doubt about it).
With just a cursory scan of its features—size, location, and a beautiful combination of old-world character and modern finishing touches—934 Ossington could easily merit a million-dollar price tag, but it sold for just $900,000. And that was after being listed four times, by three different agents, over a period of 16 months. I think we can all agree that in the Toronto market, in which the supply of freehold homes pales in comparison to the demand for them, no property should be that difficult to sell.
According to the Real Estate and Business Broker’s Act, realtors are required to disclose any “material facts” to potential buyers—that’s “a fact that would affect a reasonable person’s decision to acquire or dispose of the interest,” according to section 21 of the Real Estate Council of Ontario’s Code of Ethics. This stipulation leads to an ethical grey area of sorts: There have been instances wherein agents didn’t consider an on-site murder a material fact during bargaining. A couple in Bowmanville sued the agent and former owners of a house they purchased, along with the Re/Max branch that listed the property, when they found out that a man had murdered his mother and stepdaughter on those grounds in the late ’90s. For some bizarre reason, neither the former owners, the listing agent, nor the brokerage deemed this information relevant to the sale. And now, they’re in court.
Some pundits will caution “Buyer beware,” but I recommend, that you disclose, disclose, disclose. If you know about a material fact, whether that be a murder in the house or an oil tank buried in the front yard, fess up. Otherwise, you could end up paying large down the line if you’re sued by the buyer.
The disclosure also doesn’t have to be broadcast far and wide. You’d be hard pressed to find an MLS listing that reads, “Previous owners brutally tortured here, but brand-new hardwood throughout,” but you might see, “Please speak to listing agent before submitting offer.” At that point, the listing agent might hit you with the property’s slightly unsavoury backstory, and ask the purchaser to sign an acknowledgement.
In some cases, the seller might fail to mention a murder because, well, they just don’t know about it. Last fall, I sold a former hospital built in the 1880s. I’m sure that, at some point, somebody died there, but neither myself nor the sellers—who owned the property for just 20 years—had specific knowledge of any deaths. I can also recall a house on Balliol Street where, about a decade ago, its owner was found suffocated to death. Two shrewd realtors eventually purchased the home, gutted it, held onto it for a while, then sold for a massive profit. Sometimes, the real-estate market has a short memory.
David Fleming is a Realtor with Bosley Real Estate in Toronto, and author of the best known real estate website in the city: www.torontorealtyblog.com. A constant thorn in the side of condominium developers, David’s sarcastic, opinionated, outlandish thoughts can be read daily, although for some people, that’s far too often.