Reproduced from Fairfax Domain
Author Ann Pilmer - June 27, 2007
Melburnians are increasingly swapping the purchase of land for air. In a turnaround from conventional wisdom that acquiring land was the way to go, today's urban property buyers are forking out for highrise apartments on footprints little bigger than a sizeable suburban block.
The ultimate purchase is literally the pinnacle of the building, that is, the penthouses and sub-penthouses at the top.
The newest penthouse at 150 Clarendon at East Melbourne was valued at $15 million last month. Top-floor places in Eureka Tower, Lucient, Yve, the Mercy hospital site, Freshwater Place, The Melburnian and the Domain in St Kilda Road usually trade in the high-million-dollar range.
But their owners are far from airheads. They're spending - and making - big money on these "islands in the sky".
A St Kilda Road penthouse-style apartment, for example, increased in value by more than $500,000 in a matter of months. Bought for $2 million in February last year, it was put back on the market twice, selling in May for $2.3 million, then in September for $2.6 million to a London-based buyer.
Penthouse specialist Robert I. Mitchelson of Icon Property, who handled all three sales, says highrise buyers tend to be 45-plus baby boomers who have sold the big family home and still want plenty of living space, but without the maintenance.
"The kids have gone, they are free to travel and have the money for such a lifestyle," says Mr Mitchelson. "They love the security of an apartment because they can lock it up and go and the body corporate will look after the maintenance. They free up their lives."
For many buyers, the penthouse becomes not just a home, it's a lifestyle. And financially, "there's not a better investment" than a good penthouse, says Mr Mitchelson.
"They're as scarce as hen's teeth because they can't be built without the block of lesser apartments underneath and there's not as much apartment building going on."
Mr Mitchelson says demand has always outstripped supply in his agency.
Canny buyers recognise the quality of existing buildings such as Eureka and realise that similar apartments in new developments will be considerably more expensive, reflecting the cost of living and increases in the price of building and land.
The penthouse is also seen as a prestigious buy.
When Eureka Tower was launched seven years ago, there was a rush to buy off the plan by investors keen to rub neighbourly shoulders with celebrities and the city's leading lights. Many of those apartments are now being resold.
Hocking Stuart's Brett Jarvis, a highrise apartment specialist, lives on the 60th level of Eureka Tower (sometimes called "towers" because it's effectively three highrise buildings in one) with wife Jill.
"I bought it way back and wish I'd bought more," he says. "We have a bedroom and a study and plenty of living space with views of Albert Park Lake, the Botanic Gardens, Government House and the yachts on Port Phillip Bay. It's something special. I give traffic reports to people coming to the football. You're 17 minutes from the airport and you can walk everywhere in the city so you don't need a car."
Mr Jarvis says any big apartment near the top of Eureka's 580 apartments on the 88 residential floors, fetches high prices. A penthouse shell on level 86 sold for $7 million. And a 320-square-metre apartment with 290-degree views on the 73rd level is for sale at $4.3 million.
Aside from the "million-dollar" views - which Mr Jarvis reckons more than make up for the price of the apartment - buyers like a big apartment with quality finishes. They are realising that quality comes at a price and because of rising costs new developments will be more expensive than existing ones. Mr Jarvis says good apartments on levels 50 to 60 in the Eureka Tower have jumped, from $100,000 to $600,000 and $700,000, since selling started seven years ago. A spacious 250-square-metre apartment on level 30, completed 21/2 years ago, would have sold at around $985,000 and is $1.4 million today.
He estimates apartment prices leap from $5000 to $10,000 a floor, depending on the view, and average $8000 to $10,000 a square metre.
A lot are bought by overseas buyers who find Melbourne's apartment prices very competitive on a global scale. Many former tenants are also buying into the building, and owners who bought on lower floors often buy higher up as they get used to the style of living.
Tim Blackett of Kay & Burton says a big problem is finding large, quality apartments for buyers selling the family home who don't want maintenance but still want space.
He says the right property with the right space, location, quality finishes, outdoor terrace and views will easily fetch from $10,000 to $15,000 a square metre.
For these buyers, says Mr Blackett, budget is secondary to finding the right property.
Bird's eye on the jams below
One of the best things about high-rise living - apart from the lack of maintenance - is that you can spot the traffic jams before you leave home. That's the view of Fiona and Bob (who did not want to include their last name).
Five years ago, the couple swapped an outer suburban house on two hectares with horses, chickens and dogs for a city penthouse on the 27th floor.
Traffic is not a problem for Bob, who is a property developer. His office happens to be on the ground floor of the building, and while he has a car, he rarely drives, preferring to use a bike for getting around the city.
After three years in their original three-bedroom apartment, the couple also bought the three-bedroom apartment next door and hired Ferntree Gully building company Rori Homes to renovate the two units into one big home.
Their grown children and partners also live with them, so residential space for six adults - and pet pooch Brando - was a priority.
The spaces are vast and include a family area, a formal space on a raised podium with a Versace couch, home theatre, and an entertainment area with a bar bigger than those in an average nightclub.
Fiona and Bob spent more than a $1 million on renovations, including $400,000 on electronics. Now, fibre optic lights around the base of the bar change colour at the push of a button and a television set drops out of the bar's rounded back wall.
The apartment also has three large bedrooms, four balconies (one with a gas barbecue and outdoor heater), gymnasium, five bathrooms, office, six car spaces and three storage cages.
The main bedroom includes a library and two bathrooms. If he doesn't watch the TV mounted on the wall, Bob can sit in his bath and look out onto Albert Park and St Kilda.
Stylish interiors aside, Bob says the penthouse is unique because of its size.
He's not in the market to sell but, if someone came up with $8.5 million, he says he might consider it.
Eureka! Loving the view from 49 floors up
Up-market apartment dwellers are notoriously shy of publicity, so Warren and Raelene Gainsmith of Gainsville Furniture were initially reluctant to tell their story. But they say they have the best of both worlds.
They still have their suburban home and, seven years ago, bought two apartments off the plan and rebuilt them into one on the 49th floor of Eureka Tower (pictured).
They combined the three- and two-bedroom apartments to get more living space and four bedrooms.
They use the apartment, which they moved into two years ago, during the busiest period for their business.
"Having a spot here has been fantastic. We're 30 seconds away from the business so I've cut down on travel time," says Mr Gainsmith, "and we've used the apartment as a display suite and now we've become specialists in apartment fitouts."
In their spacious apartment, with its lime green walls and aubergine carpet, mirrors are strategically placed to reflect views to Geelong, Albert Park, Port Phillip Bay and the helipad on the Yarra.
"You don't feel any movement," says Mr Gainsmith, who admits he won't let his young grandchildren on the narrow balcony without adult supervision.
The main bedroom, or parents' retreat, is a vast, angled space, dominated by a central leather bed overlooking the city.
"The city is lit up like a Christmas tree at night," Mr Gainsmith says. "You never get tired of looking at it. We put in a mirrored wall to reflect the lights of the Bolte Bridge, which gives the room a floating effect. "The sunsets are great, too, and there is always so much going on in the city," Mr Gainsmith says.
"On our days off, there is just so much more to do in the city. There's a great community atmosphere at Eureka and we've made some good friends here.
"They tell us the cost of building has gone up about 80 per cent since we bought. And in any future picture of Melbourne, you'll see the Eureka Tower like an icon." He's satisfied that the penthouse has been a "red hot investment".
What makes a great penthouse?
What exactly is a penthouse these days?
According to agents Robert I. Mitchelson and Brett Jarvis, definitions have become a bit elastic.
Once defined as the large, luxurious apartment at the top of the building, a "penthouse" now embraces any large apartment high up in the building.
A sub-penthouse used to be on the floor below the penthouse. Now it includes floors near the top of a tall building, with apartments offering penthouse-style trappings of spaciousness, luxurious finishes and desired location.
Buyers prefer apartments of more than 300 square metres, including plenty of living space. Formal rooms are not a priority and neither is a separate kitchen but sheltered, wide terraces and sweeping views are.
Ideally those views should be on the north-east away from south-west winds and fierce west summer sun.
Mr Mitchelson has had buyers fleeing winds - so strong in parts of Port Melbourne and Docklands that they have had to tie the outdoor furniture down so it didn't blow away - to the more sedate surroundings of St Kilda Road and Southbank.
Most buyers are not height-phobic, even in apartments with walls of floor-to-ceiling glass. "Some of the elderly might worry," Mr Mitchelson says. "But with time you don't even think about it."
Wednesday, June 27, 2007
Monday, June 25, 2007
Melbournes winter is hot
Woodards Ruth Roberts. Caulfield auction. Property on the market at 750K sold $895K.
Buxtons Craig Williamson. Reported fierce competition for an ordinary house with a quirky layout on the wrong side of the street. The house, at 12 Huntley Road Bentleigh, sold for $760K, 100K above the reserve.
Craig said there had been 23 requests for contracts, and six bidders competed furiously. 23 requests!!
"South facing, main roads, railway lines, quirky floor plans - it's like "who cares?" he siad. "Its creating real estate heaven."
Buxtons Craig Williamson. Reported fierce competition for an ordinary house with a quirky layout on the wrong side of the street. The house, at 12 Huntley Road Bentleigh, sold for $760K, 100K above the reserve.
Craig said there had been 23 requests for contracts, and six bidders competed furiously. 23 requests!!
"South facing, main roads, railway lines, quirky floor plans - it's like "who cares?" he siad. "Its creating real estate heaven."
Thursday, June 21, 2007
247Legal - digital conveyancing for vendors & clients
247Legal is digital conveyancing. Its makes the conveyancing process simple to follow. Its online. Its interactive. You can follow the progress of your file online. The information is shared with your agent making their job of selling easier.
Wednesday, June 20, 2007
NZ - conveyIT partners with Fairfax Trade Me
The national network of property conveyancers, conveyIT, is now in partnership with New Zealand’s largest online marketplace Trade Me, to provide legal information to Trade Me property buyers.
Property listings on Trade Me have a direct link to conveyIT for purchasers seeking advice. The website also contains a network of local firms throughout the country that will provide property conveyancing for Trade Me members.
Tony Southall, chair of Gibson Sheat Lawyers – the law firm behind the development of the conveyIT system – says, “Increasingly, people are conducting their property transactions over the net, so it is important that legal information is as accessible as the property listings”.
Trade Me Property is the most visited real estate website in New Zealand and currently has over 38,000 properties listed, with an estimated 100,000 listings across New Zealand to appear over the next year.
Trade Me general manager Sam Morgan says conveyIT was selected for its “obvious commitment to eCommerce”.
“The conveyIT website gives the Trade Me community of 1.6 million users a source of free legal information and access to lawyers in their area.”
Property listings on Trade Me have a direct link to conveyIT for purchasers seeking advice. The website also contains a network of local firms throughout the country that will provide property conveyancing for Trade Me members.
Tony Southall, chair of Gibson Sheat Lawyers – the law firm behind the development of the conveyIT system – says, “Increasingly, people are conducting their property transactions over the net, so it is important that legal information is as accessible as the property listings”.
Trade Me Property is the most visited real estate website in New Zealand and currently has over 38,000 properties listed, with an estimated 100,000 listings across New Zealand to appear over the next year.
Trade Me general manager Sam Morgan says conveyIT was selected for its “obvious commitment to eCommerce”.
“The conveyIT website gives the Trade Me community of 1.6 million users a source of free legal information and access to lawyers in their area.”
Sunday, June 17, 2007
Telstra wants out of the Trading Post
Print can't compete with online ad sites
The Age online
James Kirby
June 17, 2007
Three years after Telstra paid a pricey $636 million for the publication, it has put the business back on the block and it will be lucky to cover its costs.
At first glance, it's another flop from Telstra (in this case its directory business, Sensis) but who could have known three years ago that the internet would not just threaten print media in the "non-journalism" categories but beat it out the door.
In the world of job ads, real estate ads, exchange and mart classifieds, such as those in The Trading Post, a whole generation has popped up that would not dream of waiting for a weekly magazine.
They move instantly — and they move online. Telstra's shift into "media without journalists" — as the purchase of The Trading Post was considered in 2004 — was much riskier than buying, say, the Packer group's magazine stable.
With the planned sale of The Trading Post, Telstra is acknowledging it does not have the expertise in traditional media to recreate the publication as a successful print/online hybrid, which it must become to survive.
The 7 per cent drop in interim revenues at The Trading Post in the six months to December is inexcusable. No wonder Telstra CEO Sol Trujillo pulled the trigger. He is much more excited by new media ventures such as SouFun.com, the real-estate website Telstra owns in China that is everything The Trading Post is not — new, exclusively online, low-cost and free of baggage.
The sale of the Packer group's Australian media interests is a sign that shifting traditional media assets into an online environment quickly is too hard. However, Packer's buyers, private equity group CVC, clearly have no fear.
Telstra might not look too clever when it sells The Trading Post. But at least Telstra knows what it doesn't know.
The Age online
James Kirby
June 17, 2007
Three years after Telstra paid a pricey $636 million for the publication, it has put the business back on the block and it will be lucky to cover its costs.
At first glance, it's another flop from Telstra (in this case its directory business, Sensis) but who could have known three years ago that the internet would not just threaten print media in the "non-journalism" categories but beat it out the door.
In the world of job ads, real estate ads, exchange and mart classifieds, such as those in The Trading Post, a whole generation has popped up that would not dream of waiting for a weekly magazine.
They move instantly — and they move online. Telstra's shift into "media without journalists" — as the purchase of The Trading Post was considered in 2004 — was much riskier than buying, say, the Packer group's magazine stable.
With the planned sale of The Trading Post, Telstra is acknowledging it does not have the expertise in traditional media to recreate the publication as a successful print/online hybrid, which it must become to survive.
The 7 per cent drop in interim revenues at The Trading Post in the six months to December is inexcusable. No wonder Telstra CEO Sol Trujillo pulled the trigger. He is much more excited by new media ventures such as SouFun.com, the real-estate website Telstra owns in China that is everything The Trading Post is not — new, exclusively online, low-cost and free of baggage.
The sale of the Packer group's Australian media interests is a sign that shifting traditional media assets into an online environment quickly is too hard. However, Packer's buyers, private equity group CVC, clearly have no fear.
Telstra might not look too clever when it sells The Trading Post. But at least Telstra knows what it doesn't know.
Dont qualify for a loan - turn to the web for help
New York Times
By JULIE CRESWELL
Published: June 16, 2007
Want to buy a home, but hampered by bad credit, an empty bank account or no job? No problem!
That may sound like an exaggeration of a late-night infomercial. But it is, in effect, the pitch that a number of Web sites are making to consumers, saying insolvent home shoppers can be made to look more attractive to lenders.
The sites, for example, offer better credit scores by hitching customers to a stranger’s credit card, or providing them pay stubs from a bogus company. One has even offered a well-stocked bank account to rent for a month or two.
Industry experts say these sites, which are relatively new, played a role in fueling the rampant mortgage fraud that has caused a huge spike in loan defaults in recent months because people bought homes they could not afford.
“There is a whole underground world — an online cottage industry — that has grown up that allows anyone to commit mortgage fraud,” said Constance Wilson, executive vice president at the financial fraud detection firm Interthinx.
Regulators and the mortgage industry are now vowing to crack down on aggressive lending practices that have led to a rising number of foreclosures. But that greater scrutiny, including lenders requiring more documentation than they have in the past, may actually increase demand for some of the services that these Web sites offer.
“We think these types of Web sites are increasing,” said Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.
Policing them is difficult, partly because it is unclear which laws, if any, the Web sites might be breaking (for their customers, though, the laws are clear — anybody who uses fake paycheck stubs or other false documents to misrepresent financial status to a bank or mortgage lender is committing fraud).
The people who operate these sites can also be hard to track down. At the first whiff of trouble, they can easily shut down and then quickly start a new Web site with a different name.
No statistics exist on the number of these Web sites and how many people use them, or whether any of the operators of such sites have been prosecuted.
An examination of loans made last year, including prime and subprime, in which some sort of fraud occurred, showed that incidents of false tax or financial statements had risen to 27 percent from 17 percent in 2002; fraudulent verifications of deposit had climbed to 22 percent from 15 percent four years ago; and false credit reports rose to 9 percent from 5 percent in 2002, according to a report issued this spring by the Mortgage Asset Research Institute based in Virginia.
If any documents were required, it was unclear whether the bogus documents were created by do-it-yourselfers or whether they turned to the products and services sold over the Internet.
Still, Joan E. Ferenczy, director of institutional investigations at Freddie Mac, said there had been a growing discussion in recent months among industry investigators about Web sites offering false identifications and income statements.
“Either it has been underground all along, or there has been a spike of activity there,” she said.
One service that appears to have grown exponentially in recent months, investigators say, are sites that offer to improve an individual’s credit score by adding them onto the credit cards of individuals with good credit scores and histories.
The practice, known as piggybacking, started innocently enough with individuals adding their spouses or children to their credit card accounts as authorized users.
One site, RaiseCreditScoreNow .com, offers to add a person to four separate $20,000 credit lines with 10 years of “perfect payments” for $4,000 (although they do not have access to the actual credit line). Doing so could increase an individual’s credit score by as much as 200 points in 90 days, the site says, and make the difference between qualifying for a home loan or not.
People with strong credit scores and a reliable payment history of at least 24 months on various credit accounts can be paid up to $1,000 for each person they add to the account as an authorized user, the site offers.
Several lawyers said it was unlikely that this practice was illegal, although many warned it could open the person renting out their credit card lines to fraud or identify theft. Attempts to contact the Web site were unsuccessful.
Another company, which operates SeasonedTradeLines.com, claims on its site to have an inventory of more than 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. The site asks: “How would your life be different with a 700+ credit score?”
A person answering the phone at the company declined to comment. “I’m not going to answer any questions,” he said. “I’m not going to give out any information.”
Last week, the Fair Isaac Corporation, the company that developed FICO credit scores, said it was trying to shut down piggybacking.
Starting in September, Fair Isaac said people who were added to someone else’s credit line would not benefit from the secondhand credit history in its formula, which is used by the three major credit bureaus.
“There is going to be no way to get around the new system,” said Ron Totaro, vice president for global scoring solutions at Fair Isaac.
One Web site that prompted mortgage regulators in Nevada to issue an alert to consumers and the mortgage industry two years ago offered to set up a bank account that could be “rented out” and verified to creditors or lenders at a cost of about 5 percent of the value of the assets. The people renting the assets did not actually have access to them.
While that site has disappeared, fraud experts say others have moved in to replace it.
“We’re seeing now a lot of checking accounts where funds are going in and out,” said Mr. McKenna of BasePoint. “Borrowers begin the month with $4 in the account and end the month with much, much more.”
Other sites offer help to people who need proof that they are working.
For $55, for example, the company that operates VerifyEmployment .net will ostensibly hire a person as an independent contractor, providing a paycheck stub showing an “advance,” with the corporate name and address. Another $25 will assure telephone verification of employment when a lender calls to check.
By JULIE CRESWELL
Published: June 16, 2007
Want to buy a home, but hampered by bad credit, an empty bank account or no job? No problem!
That may sound like an exaggeration of a late-night infomercial. But it is, in effect, the pitch that a number of Web sites are making to consumers, saying insolvent home shoppers can be made to look more attractive to lenders.
The sites, for example, offer better credit scores by hitching customers to a stranger’s credit card, or providing them pay stubs from a bogus company. One has even offered a well-stocked bank account to rent for a month or two.
Industry experts say these sites, which are relatively new, played a role in fueling the rampant mortgage fraud that has caused a huge spike in loan defaults in recent months because people bought homes they could not afford.
“There is a whole underground world — an online cottage industry — that has grown up that allows anyone to commit mortgage fraud,” said Constance Wilson, executive vice president at the financial fraud detection firm Interthinx.
Regulators and the mortgage industry are now vowing to crack down on aggressive lending practices that have led to a rising number of foreclosures. But that greater scrutiny, including lenders requiring more documentation than they have in the past, may actually increase demand for some of the services that these Web sites offer.
“We think these types of Web sites are increasing,” said Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.
Policing them is difficult, partly because it is unclear which laws, if any, the Web sites might be breaking (for their customers, though, the laws are clear — anybody who uses fake paycheck stubs or other false documents to misrepresent financial status to a bank or mortgage lender is committing fraud).
The people who operate these sites can also be hard to track down. At the first whiff of trouble, they can easily shut down and then quickly start a new Web site with a different name.
No statistics exist on the number of these Web sites and how many people use them, or whether any of the operators of such sites have been prosecuted.
An examination of loans made last year, including prime and subprime, in which some sort of fraud occurred, showed that incidents of false tax or financial statements had risen to 27 percent from 17 percent in 2002; fraudulent verifications of deposit had climbed to 22 percent from 15 percent four years ago; and false credit reports rose to 9 percent from 5 percent in 2002, according to a report issued this spring by the Mortgage Asset Research Institute based in Virginia.
If any documents were required, it was unclear whether the bogus documents were created by do-it-yourselfers or whether they turned to the products and services sold over the Internet.
Still, Joan E. Ferenczy, director of institutional investigations at Freddie Mac, said there had been a growing discussion in recent months among industry investigators about Web sites offering false identifications and income statements.
“Either it has been underground all along, or there has been a spike of activity there,” she said.
One service that appears to have grown exponentially in recent months, investigators say, are sites that offer to improve an individual’s credit score by adding them onto the credit cards of individuals with good credit scores and histories.
The practice, known as piggybacking, started innocently enough with individuals adding their spouses or children to their credit card accounts as authorized users.
One site, RaiseCreditScoreNow .com, offers to add a person to four separate $20,000 credit lines with 10 years of “perfect payments” for $4,000 (although they do not have access to the actual credit line). Doing so could increase an individual’s credit score by as much as 200 points in 90 days, the site says, and make the difference between qualifying for a home loan or not.
People with strong credit scores and a reliable payment history of at least 24 months on various credit accounts can be paid up to $1,000 for each person they add to the account as an authorized user, the site offers.
Several lawyers said it was unlikely that this practice was illegal, although many warned it could open the person renting out their credit card lines to fraud or identify theft. Attempts to contact the Web site were unsuccessful.
Another company, which operates SeasonedTradeLines.com, claims on its site to have an inventory of more than 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. The site asks: “How would your life be different with a 700+ credit score?”
A person answering the phone at the company declined to comment. “I’m not going to answer any questions,” he said. “I’m not going to give out any information.”
Last week, the Fair Isaac Corporation, the company that developed FICO credit scores, said it was trying to shut down piggybacking.
Starting in September, Fair Isaac said people who were added to someone else’s credit line would not benefit from the secondhand credit history in its formula, which is used by the three major credit bureaus.
“There is going to be no way to get around the new system,” said Ron Totaro, vice president for global scoring solutions at Fair Isaac.
One Web site that prompted mortgage regulators in Nevada to issue an alert to consumers and the mortgage industry two years ago offered to set up a bank account that could be “rented out” and verified to creditors or lenders at a cost of about 5 percent of the value of the assets. The people renting the assets did not actually have access to them.
While that site has disappeared, fraud experts say others have moved in to replace it.
“We’re seeing now a lot of checking accounts where funds are going in and out,” said Mr. McKenna of BasePoint. “Borrowers begin the month with $4 in the account and end the month with much, much more.”
Other sites offer help to people who need proof that they are working.
For $55, for example, the company that operates VerifyEmployment .net will ostensibly hire a person as an independent contractor, providing a paycheck stub showing an “advance,” with the corporate name and address. Another $25 will assure telephone verification of employment when a lender calls to check.
Sunday, June 10, 2007
Houses with a past
Does Ontario need a law requiring real estate agents or sellers to disclose whether a home being sold has a history of violence?
The question arises in the wake of the publicity surrounding the sale of a house in rural Lake County, Fla., last month. On May 5, when John and Kathy Johnson and their 24-year old daughter Christina began to move into the $227,000 house they had just bought, they were shocked to learn from a neighbour that the Greenbrier St. residence was the scene of a grisly triple murder and suicide.
Back in February 2006, local police officer Michael Mount shot his estranged wife Kim, fellow officer Joe Gomez and Gomez's wife Serena in a jealous rage, before turning the gun on himself.
Six-year old Justin Gomez inherited the house. His maternal grandmother, Debra James, represented the estates of her daughter and son-in-law. She listed the house with Larry Beard, owner of Beard Pippin Properties Inc.
James specifically instructed Beard not to reveal details of the murders and suicide to potential buyers. A Florida state law allows real estate companies to withhold details about a house if they would tend to stigmatize the property.
That law says that the fact that a property was the site of a homicide, suicide or death is not a material fact that must be disclosed in a real estate transaction.
Since the purchasers were moving into the area from another part of Florida, they were not aware of the home's grisly history.
The Johnsons have decided not to move into the house, and have put it back on the market. Relying on an old Catholic tradition that purports to speed the sale of real estate, they buried a statue of St. Joseph in the yard.
"There was no way we could ever stay here," Kathy Johnson told a local newspaper. "It would be like living in a morgue."
Events such as homicides, suicides and deaths, or even the allegation that a house is haunted have been known to affect the value of a property.
The National Association of Realtors in the U.S. requires its members to reveal all material factors that might affect the desirability of a house, but psychological factors are a grey area.
In a study published in 2000, James Larsen, a professor at Wright State University in Ohio, surveyed more than 100 stigmatized houses, including those associated with murders, sex scandals, suicides and hauntings.
Ohio does not have a law requiring disclosure of real estate stigmas, and Larsen discovered that disclosure practices varied widely. More than one-third of the surveyed brokers disclosed relevant information to all potential purchasers, but 19 per cent never disclosed the information at all.
Larsen's study concluded that stigmatized homes sold for just 3 per cent less than those not associated with scandal or violence, but stayed on the market for 45 per cent longer than average.
American law books are filled with reports of cases involving the lack of disclosure of property stigmas. Typically, the vendors and the real estate agents get sued by unhappy buyers. About half of the U.S. states have disclosure laws, and the other half do not.
Toronto real estate appraiser and educator Barry Lebow is a frequent lecturer on haunted and stigmatized houses.
As the unknowing former buyer of a house that was the site of a messy suicide, Lebow believes Ontario law should protect buyers and require disclosure.
"Quebec has disclosure laws," he told me, "while to the best of my knowledge the rest of the country is a free-for-all."
Frequently, says Lebow, the realtor becomes the "fall guy" for failing to disclose the history of a house, even if the seller is not totally honest with the listing agent.
He called on Queen's Park to enact a law requiring vendor disclosure of events that could stigmatize property.
Perhaps there should even be a registry of stigmatized properties. After all, the Toronto police maintain a list of marijuana grow operations, but not (to my knowledge) a list of the local homes that have been the sites of suicides, murders or other grisly crimes.
In the meantime, for most buyers of stigmatized homes in this province, Ontario law remains "buyer beware."
The question arises in the wake of the publicity surrounding the sale of a house in rural Lake County, Fla., last month. On May 5, when John and Kathy Johnson and their 24-year old daughter Christina began to move into the $227,000 house they had just bought, they were shocked to learn from a neighbour that the Greenbrier St. residence was the scene of a grisly triple murder and suicide.
Back in February 2006, local police officer Michael Mount shot his estranged wife Kim, fellow officer Joe Gomez and Gomez's wife Serena in a jealous rage, before turning the gun on himself.
Six-year old Justin Gomez inherited the house. His maternal grandmother, Debra James, represented the estates of her daughter and son-in-law. She listed the house with Larry Beard, owner of Beard Pippin Properties Inc.
James specifically instructed Beard not to reveal details of the murders and suicide to potential buyers. A Florida state law allows real estate companies to withhold details about a house if they would tend to stigmatize the property.
That law says that the fact that a property was the site of a homicide, suicide or death is not a material fact that must be disclosed in a real estate transaction.
Since the purchasers were moving into the area from another part of Florida, they were not aware of the home's grisly history.
The Johnsons have decided not to move into the house, and have put it back on the market. Relying on an old Catholic tradition that purports to speed the sale of real estate, they buried a statue of St. Joseph in the yard.
"There was no way we could ever stay here," Kathy Johnson told a local newspaper. "It would be like living in a morgue."
Events such as homicides, suicides and deaths, or even the allegation that a house is haunted have been known to affect the value of a property.
The National Association of Realtors in the U.S. requires its members to reveal all material factors that might affect the desirability of a house, but psychological factors are a grey area.
In a study published in 2000, James Larsen, a professor at Wright State University in Ohio, surveyed more than 100 stigmatized houses, including those associated with murders, sex scandals, suicides and hauntings.
Ohio does not have a law requiring disclosure of real estate stigmas, and Larsen discovered that disclosure practices varied widely. More than one-third of the surveyed brokers disclosed relevant information to all potential purchasers, but 19 per cent never disclosed the information at all.
Larsen's study concluded that stigmatized homes sold for just 3 per cent less than those not associated with scandal or violence, but stayed on the market for 45 per cent longer than average.
American law books are filled with reports of cases involving the lack of disclosure of property stigmas. Typically, the vendors and the real estate agents get sued by unhappy buyers. About half of the U.S. states have disclosure laws, and the other half do not.
Toronto real estate appraiser and educator Barry Lebow is a frequent lecturer on haunted and stigmatized houses.
As the unknowing former buyer of a house that was the site of a messy suicide, Lebow believes Ontario law should protect buyers and require disclosure.
"Quebec has disclosure laws," he told me, "while to the best of my knowledge the rest of the country is a free-for-all."
Frequently, says Lebow, the realtor becomes the "fall guy" for failing to disclose the history of a house, even if the seller is not totally honest with the listing agent.
He called on Queen's Park to enact a law requiring vendor disclosure of events that could stigmatize property.
Perhaps there should even be a registry of stigmatized properties. After all, the Toronto police maintain a list of marijuana grow operations, but not (to my knowledge) a list of the local homes that have been the sites of suicides, murders or other grisly crimes.
In the meantime, for most buyers of stigmatized homes in this province, Ontario law remains "buyer beware."
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