Deadly homes present quandary for buyers, sellers

• Under some state laws%2C real estate agents are obligated to disclose whether a murder or suicide took place in a property
• Realtors can face dilemma when weighing full disclosure against potentially losing a sale
• Home buyers are encouraged to ask questions if they suspect a home was site of a violent death

Kayla Bentley was thrilled to move into her in-laws' house as a 19-year-old newlywed back in 2010.

That is until she found out that the unassuming house on a quiet street in Allen Park, a suburban Detroit community, was where Justin Olszowy, a mentally unstable 26-year-old man, fatally shot his parents two years earlier.

"We were kind of upset about it," she recalled. "It freaks me out, especially because in this situation, he's not dead. If he was released or escaped, this is where he'd come."

But her in-laws, retirees Paula and Jerry Bentley, had fallen in love with the house — three bedrooms, full-size kitchen, nice living room, privacy fencing, a garage, a corner lot.

Location, location, location may be the adage, but what happens when that location is the site of a violent death?

Properties that were the sites of homicides or suicides have an interesting stain that remains long after crime-scene investigators leave. For some potential buyers, owning a home with notoriety gives them, well, notoriety. Others are freaked out by it.

In short: I see dead people — and lovely crown moldings.

"One group says, 'I don't want to have anything to do it.' Another group says, 'I'll get the carpets cleaned. How much can I buy it for?' " explained Jason Abrams, owner of the Abrams Team based out of Keller Williams in West Bloomfield, Mich., and star of HGTV's "Scoring the Deal."

Under Michigan law, real estate agents aren't obligated to disclose whether the property was or was suspected to have been the site of a homicide, suicide or illegal activity "which had no material effect on the condition of the real property or improvements located on the real property."

Although sellers don't have to fill you in on any ghoulish details, they do have to confess to a leaky basement or roof or whether the insulation is made from toxic materials, such as formaldehyde.

However, elsewhere in the country, some states, such as California, require would-be buyers to be told. (In the Golden State, that's spawned a micro-industry of home cleansers who remove spirits from homes.)

"On the seller's disclosure form, there's nothing that says, 'Has there been a murder? Has there been a ghost?' " said Michelle R. E. Donovan, a Bloomfield Hills, Mich., real estate attorney. "You don't want to fail to disclose something that would influence the buyer's decision to not purchase the property."

Donovan, whose former home in Clinton Township was down the street from where a man fatally stabbed his wife, said someone who buys a so-called stigmatized property might try to sue under misrepresentation or fraud.

For higher-profile killings, buyers know what they're getting into, but that doesn't mean it's very easy for the Realtor selling it.

"Obviously it's not like any other house, when you have a distressed property, said Janis Chiapparo of II Elite Real Estate in Roseville, Mich., the real estate agent who sold the Grosse Pointe Park home that Jane Bashara shared with her husband, Bob, who is now charged with killing her. "The house was innocent ... Grosse Pointe is full of homes people have died in. Maybe not in that manner."

Chiapparo wouldn't say how much it sold for, only that it was less than the listing price of $415,000.

"Buyers obviously are going to want a steal. They think they're going to get the price cheaper or they stay away from it," she said.

That's what happened with the Bentleys. Kayla said the family believes in ghosts, but the issue was more about the cash than Casper. They got it for less than $70,000.

"They talked the people down, because it had been empty for two years. Obviously, no one wanted to buy it," said Kayla Bentley, who admitted that her husband, Joshua, slept with a baseball bat at his bedside for part of the two years they lived with his parents.

Disclosure posed a dilemma for Mario Como, the broker-owner of St. Clair Shores-based Realty Executives Select, a few years ago when showing a house in that community that he suspected someone had committed suicide in.

"I knew that would only cause the client emotional conflict. On one hand, they were excited about the property and on the other hand, it was giving them an opportunity to pass on the property," he said. "I was definitely torn. I have certain duties as an agent of client or buyer, but ultimately, one of my duties is to help them reach their goals. In this case, the goal was very clear: a home they were very, very enthusiastic about."

Abrams said he thinks sharing a house's violent past is the way to go. He never has sold a home in Michigan that was the site of a homicide or suicide, but he has elsewhere in the U.S.

"The more information a buyer can have, the better off a buyer is. If you're going to be a state that's really serious about consumer protection, the idea should be always disclose," he said. Death "weeds people out. Death is that topic that universally makes people squeamish and it ends up being a focal point, no matter how beautiful the home is."

How to find out if a home has a deadly past

You're looking to buy a home, but how do you find out the 411 behind the for-sale sign?

Here are some tips on how to find out whether that bungalow, ranch, condo or McMansion was the site of a violent crime:

Direct question: Sure, Realtors aren't obligated to tell you if someone died on the property, but if you ask the question point-blank, they might have a hard time evading the answer. If nothing else, pay attention to whether they're hemming and hawing or changing the subject quickly.

Read between the lines: If the asking price is much lower than it should be or if the house has been on the market for quite a while, ask why. There might be a good explanation or you might have to parse it out.

Independent research: Do a Web search of the address — both the exact house number and the block number. You might find news stories about a crime or suicide online or if it's a smaller community, the local library's newspaper collection. Also, ask the local police department; someone there would surely know.

Shoe leather: Whom better to query than the neighbors? Some might be nervous about talking, especially if they're secretly hoping the long-vacant home will now be inhabited. However, every block has one blabbermouth — find him or her and get the inside scoop.