Murder, gruesome accidents, sex crimes, bad things happening to children â€“ itâ€™s enough to turn oneâ€™s stomach. Something that many people never consider is the fact that every crime has to happen SOMEWHERE. Oftentimes, some of the nastiest and most horrible crimes happen right in peopleâ€™s homes. Which begs the question â€“ what happens to those pieces of real estate afterwards? After the blood and crime tape are cleared from the scene, there is still a house left behind â€“ a house that usually needs an occupant. Unsurprisingly, many buyers are reluctant, if not downright appalled, at the thought of purchasing a so-called â€˜murder house.â€™ In the real estate industry, homes with an ugly past are tactfully referred to as â€œstigmatized properties,â€ and itâ€™s a known fact that they are hard to sell. Talk about a loss in home equity, especially in todayâ€™s housing market, where homes are already selling at a snailâ€™s pace. Not all stigmatized properties are â€˜murder houses,â€™ although those are certainly among the toughest to unload.
Buyersâ€™ reasons for not wanting to purchase stigmatized properties are many and varied. There is, of course, the plain, old reason of superstition. Some buyers fear that a house where violent crimes were committed could have become haunted. Some visitors to these homes will report getting chills or the feeling of a bad aura when they walk through the house, and are compelled to leave quickly. There is also the fear â€“ however irrational â€“ of copycat or vengeful crime against the location. Movies like John Carpenterâ€™s â€˜Halloweenâ€™ that feature a crazed serial killer who comes back to his childhood home to take revenge on the inhabitants do nothing to help with these fears, although prospective buyers worried about arson or burglary against a home that was formerly used as a gang hideout might have a slightly better case.
Even those would-be buyers who scoff at ghost stories and have the ability to look past the tragic past of a stigmatized home may want to be careful with the possible purchase of such a propertyâ€¦ there is always the question of resale value to consider. YOU might be perfectly comfortable living in one of these houses, but what happens if you decide to sell five years down the line and the neighbors are still whispering about the homeâ€™s bloody past? You may end up as the one who has trouble selling!
Several states have rules governing the disclosure from sellers to prospective buyers concerning grisly events in the homeâ€™s past. You know that realtors are obligated to tell all would-be buyers about broken air conditioners, leaky roofs, termite or mold infestation, or other serious defects in a home they are thinking of buying. If you live in states like California, you have to add rape, murder, or suicide to the list. In fact, Californiaâ€™s rules state that realtors must disclose ANY deaths in the home within three years â€“ even if the death in question was an elderly personâ€™s peaceful and expected death of natural causes. The article I read about this topic gave one humorous anecdote of a Houston realtor who let slip to his clients that a murder had taken place in the home just scant months earlier. The couple, who had â€œlovedâ€ the house up until that moment and verbally stated that it was the home they wanted for their family, backpedaled like crazy and never came back to the house again. The realtor never did sell that house â€“ after months of prospective buyers all but running out the door when they heard the news, the home was taken off the market.
The question of whether to disclose a homeâ€™s troubled past in states where no disclosure requirements exist is a sticky one. Sellers and realtors are understandably reluctant to share information that will devalue the home or make it harder to sell, but the consequences of covering up this sort of thing can be ugly. Another realtor quoted in the article declined to tell a homeâ€™s new owners more than the fact that someone had died in the home within the past year, which didnâ€™t initially bother them. Within a few months, however, they had discovered the fact that the previous owner actually hung himself in the garage.
The new owners were creeped out and angry, and sued the seller and the realtor for hiding that information. They claim that they never would have bought the house if they knew the ugly truth. The realtor in question could lose their license and be heavily fined for failing to disclose this kind of information if they resided in a state where disclosure regulations existed, although the fact that their particular state does not have any on the books makes the issue infinitely stickier. Another real estate lawsuit stemming from stigmatized property (in terms of the land underneath the house, which was brand new in this case) arose from a couple who excavated their backyard with the intent of putting in a swimming pool, only to dig up human bodies. Turns out that their home is located on the site of an old graveyard. The homeowners sued the developer of their neighborhood, claiming that the wife of the family was being haunted by angry spirits. They initially lost the case, but the Supreme Court of that start awarded them a judgment.
A New York buyer sued the seller of the home for which he was under contract to buy for the thirty-three thousand dollars in earnest money heâ€™d put down on a Victorian-era mansion before he discovered that it was believed throughout the community to be haunted. Itâ€™s said that the house in question was plagued by troublesome poltergeists. Another case for the real estate law books is that of an Asian family that sued when they discovered that their new home was the former site of a suicide. Many Asian people have cultural beliefs about suicide bringing lasting bad luck to a home, which they explained to a judge. The realtor argued that she could not have been feasibly expected to know that they buyers were sensitive to the issue of suicide, and they did not live in a state where disclosure was mandated. The family lost the suit in this particular case, although outcomes have gone in either direction.
For the unfortunate owners of stigmatized real estate, giving up can sometimes be the only option. I heard on one of my favorite real estate discussion forums on the World Wide Web about a house in the Midwest that was priced fifty percent below comps in the area (in a very nice, upscale, and desirable neighborhood), and had still been on the market for upwards of nine months. The year before, a father went on a psychotic rampage and killed his wife and three kids in the house. The house was like poison, said the poster, who had previously considered purchasing the home as a rental property. They decided against the purchase, based on fears about the homeâ€™s future resale potential.
Thereâ€™s no doubt that a death in the home sinks the home equity, at least by a little bit. Even a garden-variety suicide can drop a homeâ€™s value by ten thousand dollars. On the whole, say experts, most homes will experience a fifteen- to twenty-five percent decrease in equity if a violent crime has happened there, especially in the past half-decade. This isnâ€™t a frequent issue, say realtors, but one that comes up often enough to be a serious issue for those involved in the sale of the property in question.
Itâ€™s a well-known fact that only the most notorious of stigmatized properties will carry a reputation for longer than a few years. If owners can weather the storm of gossip, speculation, and lies, they will most likely find that their â€˜murder houseâ€™ is a fine investment over time. The home where six-year-old beauty queen JonBenet Ramsey was found murdered in the 1990s initially had trouble selling, although it has changed hands three times since the crime, and appreciated in value by sixty percent over that period. They say that time heals all wounds, and this is definitely still the case when it comes to stigmatized real estate! On the other hand, you have one of the houses where notorious serial killer Ted Bundy murdered several people. That house had to be razed and rebuilt with a new address, considering its terrible notoriety.
Would you buy a notorious address in order to get that 'killer' deal? What property still lingers in your areas because of being stigmatized?