When adversity is not adverse
It is a requirement of all licensed real estate agents to disclose, "Adverse Material Facts" to parties in a real estate transaction. As defined in Idaho real estate license law an Adverse material fact is one that, "would significantly affect the desirability or value of the property to a reasonable person..."
We can all agree that a broken foundation or leaky roof must be disclosed as it has a direct impact on "desirability or value." But what about the, not so obvious, characteristics of a property? Coverage in this week's Press causes us to ponder the paranormal presence claimed by many to be a part of their environment.
First, we have to decide if these believers are "reasonable person(s)." We are not attorneys of course so certainly couldn't guess how the court may rule, but generally speaking, an unproven presence of paranormal activity is not likely an adverse material fact. In fact, a recent study conducted by Realtor.com suggests that a property purported to be haunted, may have some competitive edge over the everyday offerings found on its website. According to Realtor.com:
"Survey data reveals that while the majority of consumers are open to purchasing a haunted home, many buyers conduct their own research on a home's history to be aware of any weird incidences," says Alison Schwartz, VP of corporate communications for Move. "Data also finds that while some respondents are willing to purchase a haunted home at a discounted price, many say levitating objects, ghost sightings and seeing objects move from one place to another would deter them from purchasing a home."
For at least a fourth of the respondents a haunting seems to be no deterrent at all. For others, a haunting would be an acceptable amenity if they could buy at a reduced price.
In the survey a full 56 percent said they would buy a haunted house at a deep discount while 12 percent say they would pay full price or better. A story found at MSN.com real estate told a story of just such a purchase:
"If you think ghost stories make a house less valuable, you might be right - most of the time. But not all the time. The Schaibles weren't your typical house buyers. They were living in a two-bedroom town house and were looking for a big, old Victorian house to restore. As soon as they stepped through the pair of 8-foot-high front doors, they knew this house was the one. Furthermore, the Schaibles are famous among their friends for elaborate Halloween bashes they hold every other year, complete with caskets in the rooms and a hand sticking out of the punch bowl.
"The ghost stories about the house 'made it completely more valuable,'" Schaible says. "Would I pay more money for a haunted house? No. The decision to buy the house was based on the house itself." But, he adds, the spectral tales "juiced it up. The fact that the Halloween people bought a haunted house was so funny - too perfect."
So you see, a haunted house may be less valuable to some, but unless there is a documented presence that negatively impacts the value, we wouldn't expect disclosure to be required by "reasonable person(s)."
Have a safe and Happy Halloween.
Trust an expert...call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.