Former realtor explains ethics of 'haunted' property sales in Vermont
There is real estate, and then there is "distressed real estate."
Distressed real estate is when a former owner or tenant did something illegal or tragic, like manufacture drugs, commit suicide, or murder a partner or spouse and commit suicide. In such cases, there is a black cloud over the history of the property.
For some private sellers of distressed real estate, it's better from a marketing point of view not to say anything to the buyer.
In Massachusetts, the law is strict when it comes to the sale of distressed property -- property marred by crime, violence, or an alleged "ghost haunting." If the buyer has the presence of mind to ask the private seller or agent if a property is distressed, the seller or agent is legally bound to tell all.
While other states have simliar buyer protection laws on the books, it's a little different in Vermont, says Matt Musgrave, advocacy and development director for Vermont Realtors, a property owners advocacy group in Burlington.
Musgrave says there is no disclosure law in Vermont for a private seller who doesn't have a real estate agent to represent the sale.
"If you don't have an agent involved, you don't have a law [requiring disclosure]," Musgrave says. Even so, he says it's a "moral issue" for the private seller to disclose.
Agents in Vermont are required by state and national real estate codes of ethics to dislose -- even if the seller says not to when "material facts" are involved, says Musgrave.
A material fact, Musgrave says, is not as simple as a reported ghost sighting. It's when a property is known to be tainted "in terms of its lore -- a suicide, for example."
If the folklore does exist "it's a material fact, because of [the property's] history. That is where the challenge is," adds Musgrave, who sold real estate for 15 years in Vermont and had a ghostly encounter of his own.
An agent is "not supposed to hide that information, he says. "If it's a material fact, then they are required to disclose."
Some buyers may think living in a haunted house is cool. Others, however, might balk at a sale if they knew that their future home-sweet-home has a bitter past.
In the end, Musgrave says, honesty is the best sales policy in Vermont when dealing with distressed property -- even when it's to die for.