Earlier this week a HUD home came up on the market. 4 bedrooms, 2 bathrooms on 3/4 acre with a creek running through the back yard. Best of all, it is priced $99,000 under fair market value! I immediately sent a spec sheet out to my buyers database. It didn't take long before I scheduled my first showing. After the showing I walked through and took a video of the home so I could show my investors who don't have time to look at houses all day. During my 7th showing of this home the buyer was very interested and it was just a matter of offering asking price or try to negotiate. As he was walking around the house for the fourth time, he asked me "did someone commit suicide in this house?" What would make him ask such a question? It turns out that his family remembered hearing someone commit ed suicide on this short quiet street about 9 months ago. I quickly Googled the address on my phone and saw no mention of any suicide. We went over to the neighbors to get the scoop and sure enough, the previous owner shot himself in the basement. My buyer cancelled his offer on the spot. I couldn't blame him.
As I tell people this story I ask them what they would do and it is about 50/50. We can all agree on the fact that now that I know the situation, even though I don't legally need to disclose this information, ethically I do.
So now it's your turn.......
What would you do?
Buy the house because it is great and $99,000 under fair market value
cancel the deal because someone commited suicide in it?