Should homeless encampments be on the seller's disclosure!

By
Real Estate Agent with RE/MAX Professionals.

 

Should homeless encampments be on the seller's disclosure!

What should be on the seller's disclosure form?  Several people have asked me this question.  We have run the gambit in our state of what is on the seller disclosure.  At one point we were asked if there were any farms within a radius of the home.  This didn't make much sense for a house or condo in downtown Seattle or Tacoma.

The main reason for writing this was from a question I received from a new homeowner.  (Not my client!) She told me that she was never informed that there was a homeless encampment (Its been there for more than 6 months) not two blocks from her house she had just purchased.  She thought it should've been disclosed by the seller.  The encampment is behind a church but definitely has caused houses for sale nearby to remain on the market, and if sold, affects the price point. Of course, a lawyer, had told this lady she should sue both the listing and the selling brokers and agents. The old blame game.

Paul Henderson. ©2012, All Rights Reserved,

On our current seller's disclosure I find no mention of what the neighbors depict as an eyesore.  Some of these neighbors have had their houses on the market for several months.  We all understand that the economy has a lot to do with houses not selling but when you throw in an unzoned multifamily development, people get suspicious.

I would not have known of this encampment unless I've had been told what to look for and where.  Our inspection addendum does allow for a neighborhood review however does one expect to encounter a homeless encampment in a suburban neighborhood?  If you saw a church with a large fenced in area in the back; would you become suspicious?

What is your line of thinking on this?  

 

This post was authored  and picture taken by Paul Henderson ©2012, All Rights Reserved, This content may not be reproduced or reprinted (Except for ActiveRain Re-blogging) without express written permission of Paul HendersonRE/MAX Professionals, Tacoma, WA.

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Paul Henderson, Residential Real Estate Broker

Realtor ® ABR, BPOR, CRS, GRI, CDPE

RE/MAX Professionals

As a Residential Broker and Relocation Specialist, I sell homes in or around JBLM, DuPont, Tacoma, Gig Harbor and Hartstene Pointe in Washington State.
Please visit my website at http://www.phenderson.net to search for homes and information 

(all information is believed to be accurate but is not guaranteed or warranted in any way)


Referrals are always welcomed and appreciated, Thank-you!

(As a member of the NWMLS, this blog post is intended to comply with NWMLS rules as pertaining to blogging.)

 

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  1. David A. Weaver 06/12/2012 10:26 PM
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Show All Comments
Ambassador
1,197,255
Paul Henderson
RE/MAX Professionals. - Tacoma, WA
I always put my clients first in any transaction!

Kevin, I do like to see what other parts of the country disclose 

AJ, that is in interesting that the seller is not required to disclose anything outside the property boundary. Good comment! 

Jun 12, 2012 05:47 PM #9
Rainmaker
738,334
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

Disclose, disclose, disclose....I know it has to be painful.  But, lawsuits are even more painful.

Jun 12, 2012 06:52 PM #10
Rainmaker
582,897
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Paul - I always say, if you wonder whether to disclose, then clearly you need to disclose.  The fact that it even occurrs to you that disclosure might be appropriate means that it will be an issue for some people. Our disclosure forms in California are pretty detailed but there is still room to add anything else that might be relevant.  I certainly would have urged my clients to disclose that encampment.

Jun 12, 2012 07:23 PM #11
Rainmaker
1,162,306
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Fascinating topic, Paul!  I agree with Susan's #12 comment regarding how I usually handle these things. 

Jun 12, 2012 07:29 PM #12
Rainmaker
338,965
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley R since 1976;408-565-8177

Did the seller live in that house or was it a rental?  The existence of the encampment may not even be known to the seller especially if he doesn't live there.  It has been there only 6 months.

When we ask CA attorneys if something needs to be disclosed, they turn the question around and ask if the seller thinks it's something that could affect the buyer's decision to purchase the property?  If "yes" it's a "material fact" and therefore needs to be disclosed. 

The CA disclosure has a question: Is there any neighborhood nuisances?

Is this a legal encampment approved by city/county authorities, or just swatters?  If it's swatters they'll probably be moved when there are enough complaints.

Jun 12, 2012 07:43 PM #13
Rainmaker
371,010
Linda D. Pufford
Stage with Divine Style - Home Staging - Novato, CA
ASPM, Marin/Sonoma Home Stager

Hi Paul,

This is a fascinating post...  and really great comments too.  Although not a Realtor...  my opinion as a home buyer is that I would definitely want to know.  I agree with you that it would effect the resale of the home.  I've only sold one house before but my Realtor advised me to disclose everything and get everything repair or he would not even list my house.  In the long run I was really glad I listened to him.  Congratulations on the well deserved feature!

Jun 12, 2012 08:02 PM #14
Rainmaker
1,027,597
Michael Jacobs
Coldwell Banker Residential Brokerage - Pasadena, CA
PasadenaCA Real Estate Representation 818.516.4393

Paul -- not as simple an answer as some might assume --

For sellers:   what would you want to know about this property and neighorhood if you were the buyer -- is the standard question I ask.

For buyers:   drive through the neighborhood at different times of the day, stop and ask neighbors.

For the brokers/agents in the transaction:   disclose, disclose, disclose.

Disclosure issues vary by jurisdiction but good judgment always seems to be a good route.

 

Jun 12, 2012 09:46 PM #15
Rainmaker
111,158
Kathy Judy
Tri-Cities Real Estate - Ontario, OR

well, that is interesting, --I don't think it is the seller's duty to disclose that - it would be like having to disclosure that a neighbor in the next block has loud parties.  Depending on the client, the homeless encampment could be a sign of a welcoming helpful community spirit and be viewed as an asset by a client who values social activism. 

I remember having a buyer client tell me "this is a really good neighborhood".  And I thought "it is?"  It truly depends on the individual. 

 

Jun 12, 2012 10:03 PM #16
Rainer
96,421
Bart Foster
Keller Williams Realty Boston - Metro - Boston, MA
Boston MA Real Estate

How should a Realtor answer the question if the neighborhood was "safe"? A seller's disclosure has only to do with the property! Direct the buyer to the local authorities if its important.

Jun 12, 2012 10:05 PM #17
Rainer
58,089
David A. Weaver
Buckeye, AZ
20 years helping folks finance their homes.

Excellent information, it should be paid attention too, this is a great post. Have a great day!

Jun 12, 2012 10:22 PM #18
Ambassador
1,564,018
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

Paul - I think Lloyd was dead on with his answer for California sellers.

Jun 12, 2012 10:37 PM #19
Rainmaker
552,778
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

I would disclose it.  I would state that it is behind the church.  It may be a temporary thing, although you mentioned that it had been there for 6 months.

Jun 13, 2012 04:39 AM #20
Ambassador
1,889,850
Judi K Barrett
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma - Idabel, OK
Broker/Owner, Integrity Real Estate Services -IDAB

Does the church plan to make it a permanent part of their services to the community to have a homeless encampment on their grounds?  Are they breaking zoning rules by doing that?   

In our small communities, everyone usually knows what's going on but when a buyer comes from out of town to purchase, I always advise that they do their own drive around in the neighborhood and become acquainted with what's there. 

 

Jun 13, 2012 05:08 AM #21
Rainer
276,890
Kathryn Maguire
GreatNorfolkHomes.com (757) 560-0881 - Chesapeake, VA
Serving Chesapeake, Norfolk, VA Beach

I am sure that it varies by state.  In Virginia, there are certain things that must be disclosed but most things fall under the category of being the buyer's responsibility to discover.

Jun 13, 2012 05:17 AM #22
Rainmaker
1,100,311
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

I think it is important for the buyer to at least drive around the area to get to know it before making an area and the best way is to walk through the neighborhood, talk tio the neighbors and ask lots of questions.

Jun 13, 2012 05:55 AM #23
Rainmaker
1,273,647
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

I have dealt with this and I am dealing with this now...If an agent knows something, it has to be disclosed. Homeless and transients for sure affect buying decisions...this could be a lawsuit waiting to happen if not disclosed..good post here

Jun 13, 2012 06:48 AM #24
Ambassador
985,446
Bob Crane
Woodland Management Service - Stevens Point, WI
Forestland Experts! 715-204-9663

Hi Paul, I think that you have to draw the line somewhere on these out of hand disclosures, and requiring sellers to report on what class of citizens live nearby goes way beyond the line.  Whats next "how many families of each race are located within a mile"?

Jun 13, 2012 06:49 PM #25
Rainmaker
959,773
Georgie Hunter
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

If the sellers knew about it then they should disclose.  I can understand if they weren't aware of it.  Buyers do need to check out the neighborhood first.  Now that they are part of the neighborhood, they can be part of the solution to the homeless camp.

Jun 13, 2012 09:00 PM #26
Ambassador
1,197,255
Paul Henderson
RE/MAX Professionals. - Tacoma, WA
I always put my clients first in any transaction!

Bob, We don't establish what is reported. In our case the state of Washington's legislature mandates what's in the form. Right now, these mandates, average at least one new update per year. If something directly affects the price or equity of one's property should it not be disclosed? 

Georgina, I agree that now that she is part of the neighborhood she should use her vested interest, to help maintain her neighborhood or work on a solution. She felt that the sellers should have disclosed prior to closing so that she could have made the decision if she wanted to live within two blocks from the site. She equated it with painting over water marks, from flooding, in a basement. 

Jun 14, 2012 10:44 AM #27
Rainmaker
1,085,421
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

The flooding in the basement happend TO THE PROPERTY, something happening 2 blocks away is entirely different.

Jun 18, 2012 12:21 AM #28
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Paul Henderson

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