Stigmatized Properties: When a Home’s dark Past Matters
When a real estate agent guides you through a home for sale, they’re required to point out physical or material defects in the property. In most states, a recent death in the home doesn’t count.
However, some homes are considered "stigmatized properties," or dwellings that have been "psychologically impacted by a past or suspected event on the property, but has no physical impact of any kind," according to the National Association of Realtors.
Which states require disclosure of death?
Listing agents will have different requirements state-by-state on what to disclose to a buyer. Most states don’t have any death disclosure requirements. Among those that do, rules can be straightforward and explicitly require prior death to be disclosed to homebuyers. For example, in California, a seller must disclose if someone died in the house within the last three years. In Alaska, the listing agent must communicate if any known murders or suicides happened in the last year. South Dakota requires sellers to disclose deaths within the last 12 months.
Regulations will depend on the stigma in question. In New York, a seller doesn’t need to disclose if the house was the site of death or crime. But if a seller has made claims of paranormal activity in the home, they have to inform the buyer of potential ghosts in the property, experts say.
How to find out a home’s history
If you have questions or concerns about a property’s history, the first thing you should do is ask the real estate agent. In some states, real estate agents need to provide truthful information upon a buyer’s request, or at the very least, point you towards the right direction to find out. Here are two ways to check:
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Talk to neighbors and officials
Keep an eye out for the property’s neighbors, experts say. Besides the real estate agent, neighbors can give you first-hand experience of the area, as well as information about the previous homeowners. You can also call the county manager where the property is located, and ask for someone who may know about the property you’re considering and if there are any crime records associated with it. - Follow the paper trail
"The internet is a dangerous source for information," Vavra said, as you can find a wealth of details about a property. If police responded to any activity at the house, the event will likely be reported in the newspaper and it would be public record. You can do an advanced search online through newspaper headlines and police reports, as "all that information is free," she said.
Who buys stigmatized properties?
Stigmatized homes can be a "turn off" for homebuyers who believe in ghosts or spirits, said Daryl Fairweather, chief economist at Redfin, an online real estate brokerage firm. "Some people are spooked away," while others might "seek out those homes." Nearly three-quarters, 72%, of potential homebuyers said they would buy a haunted house for a lower price, according to a new report by Real Estate Witch. Some buyers don’t care what happens in a stigmatized property "if it can get them a discount on price." About 43% of polled Americans would offer at least $50,000 below market value on a haunted house, Real Estate Witch found in the report.
Conclusion
Buying a home is a significant investment, and it’s crucial to understand the property’s history before making a decision. While some states require real estate agents to disclose certain information about a property’s past, others may not. Homebuyers should be aware that there might be more to a property’s history than what’s initially disclosed. By asking the right questions and doing some research, you can make an informed decision about your new home.
FAQs
Q: Do all real estate agents need to disclose a property’s history?
A: No, not all states require real estate agents to disclose a property’s history. Some states may have different requirements for disclosure.
Q: What are some stigmatizing events that can affect a property’s value?
A: Stigmatizing events include murder, suicide, alleged hauntings, and a notorious previous owner.
Q: Can I find out a property’s history on my own?
A: Yes, you can research a property’s history by talking to neighbors, contacting local officials, and searching online for public records.
