Do we have to disclose that the house next door is in foreclosure?
Here is the senario.
I am a single agent for the buyer and we made an offer on a house last week.
Asking price was $797,000 we offered $750,000 cash, closing asap, as is, no inspections, $50,000 in escrow.
I explained to the listing agent that we came up with this price because of an old roof and a seawall that was in very bad shape etc.
The seller countered with $795,000 with the argument that they had comps to support this price.
So, here we go again and this time I used what I though might be my best argument
I told the listing agent that the house right next door (no for sale sign, exact same location and lot size and view and age, same house, best possible comp you cold ever find) is a short sale and that the seller of this property had acceped $650,000 for it and was just waiting for bank approval and that once this deal closed, it will most liklely bing the prices down a lot in the neighborhood.
I really thought she and the seller would be shocked by this news and evt be a little more negotiable.
Well, I was very wrong.
Her answer was “Oh yes, we know all about the short sale next door”
So here is my question
Listing agent and seller know about short sale or foreclosure next door – shouldn’t they have disclosed it in their property disclosure?
In our standard disclosure there is one questions at the very end
which reads something like
Is there anything else that materially affects the value of the property?
So, here is my question to you
Should or would you disclose a short sale or foreclosure in the immediate neighborhood for a very comparable property?