Halloween is one of the most celebrated annual holidays. Just like Christmas, New Year, Ramadan, or Yom Kippur, almost every country in the world observes it. This celebration is famous for its external attributes, such as pumpkins, costumes, and the children roaming around the community, asking for sweet treats. However, this seemingly joyous event was not like this a long time ago. Originally, the celebration has something to do with spirits, occults powers, protection against evil forces. Now, it is more like the other holidays, a little bit spooky, but still enjoyed by the people from all walks of life. So, where did it originate?
An article from about.com explains that, in the historical sense, the word Halloween was a retrenchment of the phrase “All Hallows Eve,” which means the day before “All Hallows Day,” or in the modern time, “All Saints’ Day.” It was initially a Catholic holiday and had religious connotations dedicated to the commemoration of all the Church’s saints and martyrs. As time passes, this eventually turns into a day of trick-or-treating, with matching scary costumes, and a series of hilarious pranks.
So, why are we talking about this stuff? This holiday celebration has something with the real estate industry, not in the historical sense but with its relation to the spookiness. So, let’s get started.
Before anything else, may I ask if how you would react if you discover that someone died in the property you recently bought? If you say that you’ll be uncomfortable, then you are not alone. In a survey conducted by Realtor.com, about 26 percent of the participants said they would not live in a house where someone has passed. This unfortunate event is one of the ubiquitous examples of an event that stigmatizes a particular property.
When does a property become stigmatized?
Properties or homes that some buyers find detrimental because of psychological or emotional reasons are called stigmatized properties. Usually, a house is stigmatized when unfortunate events such as suicide, murder, and sexual assaults occurred in the property or somewhere close to the property. A home where paranormal occurrences exist can also be stigmatized. Residences with this kind of history are often considered “psychologically impacted.” This sways most home buyers as they do not want to reside there and or to properties near them as much as possible. Most often, agents who listed properties like these have difficulty finding a buyer, especially when stories about these houses are widely publicized through news and social networking sites.
According to a study conducted by Wright State University, stigmatized properties were sold for 3 percent less than other properties. These homes take 45 percent longer to be sold compared to those unblemished homes. Luckily, there are some remedies that could help to address this kind of impediment. Some spend money to remodel the house, and others try changing the address. When a particular property is heavily stigmatized, some just opt to demolish it to build a new one. The house of American former football running back Orenthal James Simpson Home located in Los Angeles and the Sandy Hook Elementary School in Newtown, Connecticut, are some examples, to name a few.
Sad as it may seem, there are homeowners who even give up a massive cut from the price out of desperation. And even so, there are buyers who still would not want to take advantage of the offer. A 2,500 sq. ft. property, thought initially to be listed for $1.8M, was only listed for $1.49M. It has been on the market for several months already. The buyer decided to put an offer, given the half a million pricing discount. However, upon learning the heartbreaking story behind the property, the buyer immediately put it off. The San Francisco Home was listed with a 20 percent discount because a fire broke out that killed three members of the family: a 33-year old father, his one-year-old daughter, and her grandfather.
There are other reasons why a home is stigmatized. Examples of which may include: a suicide or death in the property, the house is a subject of public intrigue, reports that a property is haunted, the property became a scene of a major crime, the former owners have fallen to debt, etc. Let us further discuss them one by one.
TYPES OF STIGMATIZED PROPERTIES
- Stigma of Murder or Suicide
This stigma occurs when someone was murdered or have committed suicide inside the property. This type of stigma is the worst for buyers. Most buyers believe that the trauma that this incident has brought into the property prevails after death. About forty-five percent of Americans think that the spirits of the dead come back to haunt, according to a survey by Huffington Post.
U.S. states’ have different laws when it comes to disclosing such information to the buyers. The majority of them do not direct sellers to give away the data openly; however, if the buyers raise a question regarding the property’s history, agents and sellers cannot lie or misinform the buyer to prevent the deal from falling off. For example, in California, the Civil Code Section 1710.2 obligates the seller to disclose information on death that occurred within the last three years. States such as South Dakota and Alaska require sellers to report an incident if it happened within the previous year. New York has more demanding stigmatized property disclosure laws. Even though they are not obliged to give information about past owners’ death, North Carolina agents need to answer a direct question truthfully. On the other hand, Florida state law doesn’t order disclosure at all.
- The Stigma of Public Intrigue
Most of the time, people succumbed to different kinds of public intrigue. Properties and houses are no exemption. No matter how innocent a particular property may look like, it can still become a subject of curious onlookers. Properties used in films and TV productions are likely to experience increased traffic due to fans who want to visit the house. In the famous television series entitled Breaking Bad, an Albuquerque home housed Walter White, a Chemistry teacher who created a meth empire. The once peaceful neighborhood became the talk of the town as the fans of the series flocked to the address, creating an unsafe environment for the homeowners. The disturbed property owners feared leaving the house without someone watching after it. They had to put a metal fence to keep the tourists out.
Moreover, when a particular property or home was a previous site of a sensational crime, this can be an issue that will put the property into a public stigma. The owners of this kind of stigmatized properties are often aggravated by people who constantly visit the property to take photos. There are also instances when people try to break in to feed their curiosity.
If whatever transpired in a property is well-publicized and widely known to the point where a residence becomes a scandalous landmark, whatever type of stigma it is, it is deemed “public” and always requires full disclosure. The other rules around disclosing are more complex to interpret.
- The Stigma of Paranormal Activity
Many people believe in spirits or ghosts, and there is nothing wrong with that. However, in the real estate industry, this is a factor one may consider before selling. For those who believe in ghosts, when a house or property has experienced or been a site of paranormal activities, it poses as a hindrance in closing a deal. According to Realtor.com, 49 percent of home buyers will not consider living or moving into a haunted property regardless of the benefits and discounts or any form of advantage. Additionally, the seller and agents must be fully aware that, most of the time, when the property a known site of paranormal activities, most of the phone calls they will receive will not come from the actual buyer. It will come from the people who are just looking for a thrill or from those who are just beginning their ghost hunting journey.
In New York state, if the seller builds the notoriety that the house is haunted and then takes an errant advantage of a buyer’s unawareness of the home’s spooky reputation, the courts will revoke the home sale. For instance, if you welcome ghost hunters to your home, then later sell it to an unknowing buyer who likes sitcoms, a court could dematerialize that sale.
On the other hand, Massachusetts and Minnesota resolutely state paranormal or supernatural activity as a “psychologically affected” aspect that does not need to be divulged.
Some real estate agents share that eerie properties pose other challenges that can horrify buyers.
- Stigma of Criminality
Some home buyers are interested to know if a property was used for unlawful activities such as drug selling or drug making. A criminal stigma results from tenants who have used the property in illegal activities. For example, if the previous dwellers have used the residence as a drug den or a bordello, many states regard the property as stigmatized. Some other states require up-front disclosure, but most states don’t. Curiously, Indiana requires up-front disclosure of any property used to produce methamphetamines in the past. Methamphetamine is a recreational drug that may result in adverse health complications when taken.
As long as there are no physical dangers from a criminal stigma, many buyers will overlook the fact that a property was previously used for illicit activity.
- The Stigma of Debt
The stigma of debt occurs in the properties in which the former owners owed a tremendous amount of money that the creditors and collectors regularly call or visit the house requesting payments. Many buyers are interested in asking about this type of stigma because most often than not, they are the ones being chased by collectors who are trying to reach the previous owner. Even if future owners might have to deal with the collectors unfairly, real estate professionals say that this stigma is the easiest to clear up. The new property owner could simply say that they have recently moved in, and the person they are trying to reach no longer lives there.
Generally, collectors are not informed that a debtor had left a particular residence. Some states demand disclosure of debt stigmatized properties.
- Minimal Stigma
Unlike others, minimal stigma only affects a small number of the population. As such, it is unlikely to affect the ability to sell the property. A perfect example of this is when a terminally ill person passes away within the property. Although the illness is not contagious, buyers are anxious to live in the said home. If a sex offender lives in the area near the property, buyers may also impede the purchase. Of course, for some safety precautions.
It is still within the prerogative of the real estate agents whether or not to disclose information to prospective buyers. Depending on the severity of the situation, they could provide the information on a case-to-case basis. For instance, while diseases like AIDS may induce a property to become stigmatized, the 1988 Fair Housing Amendment Act considers them handicapped, thus prohibiting discrimination against these members of the protected class. In this scenario, the fact that the occupant has AIDS does not direct disclosure to a prospective buyer.
What all of this situation is calling for is the honesty amongst sellers and realtors. If someone asks, they should provide what is asked of them. On the part of the buyers, they should do their due diligence. It lies in their hands how far they want to scrutinize all the various kinds of minimal stigma that might have befallen at a property they are looking to purchase.
Stigmas vary for different people. What one individual might deem unacceptable may not really be an issue to the other.
What must be disclosed?
Non-disclosure of the happenings behind stigmatized properties is not illegal in most states. However, some states require disclosure of death if it was the home’s condition that caused it. For example, one’s death due to a leakage of carbon monoxide.
The members of the National Association of Realtors are encouraged to publicize the necessary facts concerning the property that would likely affect the buyer’s decision to proceed with the purchase. Most probably, a death that occurred twenty-five years will not become a hindrance for the deal to close. But a recent mass murder on the site will certainly do.
Sellers or real estate agents must always keep in mind that they should not lie when asked about the property’s history. One will not be to carry the burden of being tagged as fraud if the buyer discovers so. Buyers, on the other hand, has all the right to about stigmas that concern their well-being.
Choosing a home is like choosing someone you want to spend the rest of your life with. It is not an easy task. This necessitates a lot of patience and effort. You may say that you have fallen in love at first sight, but you need to be more reflective. Beauty, sometimes, hides a shameful reality. We might cling to something that is beautiful but, this fades over time. It doesn’t last for a lifetime. That’s the reality of our world. We might have a colorful and well-structured home, but if this will disturb you emotionally and psychologically, then it isn’t a good deal after all. To avoid these things from happening, we need to know more about the house we will live in for the rest of our lives. A little research could prevent us from making the worst decisions.
Boston Realtor and Real Estate Coach Dana Bull gave helpful tips on how to get to know more about the property you are buying since you will unlikely to encounter a property listing descriptions that openly state “haunted” or “former crime scene.” Here are her suggestions:
- Check with a real estate attorney in your state to see what disclosures are required.
Real estate laws can vary from one state to another, so it is essential to gather information from the local real estate attorney about the disclosures a seller has to make regarding the property. Knowing these data may guide you as you buy properties. Being well-informed saves your time from undergoing court fights.
- Ask the seller’s representative if a criminal or paranormal activity has been reported.
Although most states do not require to disclose previous events in the property, the sellers and agents are legally obligated to answer your question truthfully. Again, you need to know this thing because the home that you want to buy could be your shelter for the rest of your life. Knowing this will help you to save money. Why? If something terrible happens when you are occupying the property, the first thing that will come to your mind is transfer. This could be messy and will waste not only your money but also your efforts and time. To avoid this kind of circumstance, don’t be afraid to ask questions.
- Carefully review the seller’s disclosures if one is included with the listing.
Reading gives you power. It may not like what Superman and Thor have, but the ability to avoid future misfortunes and waste of time. Some states are required to disclose any events that might be affecting the future owner of the house or property. You, as a buyer, need to read carefully to have enough knowledge. Reading will not waste your time and spare you from the things you didn’t want to happen. So before you hit that “agree” button, make sure to read the terms and agreement you agree with.
- Get the inside scoop from the neighbors.
Speaking to your would-be neighbors can help you expose the details the seller may not want to share with you. You would be surprised what things you will discover just by talking to the neighbors! Most of the time, they know more, especially when they live around the property you are purchasing for a long time. Your neighbors would probably know about the rumors about crime and haunted houses in the area.
The neighborhood stories will either encourage you or will make you think twice. For example, there was a murder on the property. Surely, there were police patrol cars and ambulances will be around. This kind of scenery will be remembered by those present in that particular event, and they probably can recall the things that transpired that day. Locals in that area can provide more vivid descriptions than the news and police reports can.
Once you’ve found the home you like, walk around and initiate a conversation with the locals. Talk to someone walking along with their pets, to someone watering the plants, or to the one drinking coffee on their lawn. Ask questions about the area, the health of the homeowner’s association, and any information you may need to know.
- Always Google the address of your future home. You may uncover a headline that sways your decision.
In our current settings, instants are everywhere—instant noodles, instant coffee, etc. Just like in real estate, you can instantly acquire the information that you want. You just need to maximize your smartphone and internet you will know almost everything you wanted to know. Many things are circulating the net, especially the events that shook the community. For example, previous police reports, the meetings held in the association, local blogs, to name a few. If you feel that you need to know more, you might want to ask Google in this regard. Again, the realities that you will uncover may encourage or discourage you. We are looking for a property to fulfill our dreams and become our place of rest when our work exhausts us. We need to get our stress out of our entirety, which will not happen if something is disturbing you. To avoid this, ask Google.
If the paragraphs above don’t suffice your needs and don’t quench your curiosity, you might want to consider checking the history of the property or house that you wanted to buy, such as, buy, sell, and even its repair history. There may be a lot of information coming from the internet and neighborhood, but some facts can be revealed when you check the previous buy and sell history of the house. Did the house increase or decrease its value over time? Does it have a long list of being sold and bought several times over the past years? These two things indicate that there could be something about the property that keeps people from staying inside it.
If you are concerned about different types of stigmas, it would be best if you will communicate it to the real estate professional at the onset of the home buying process. For example, if the stigma of murder or suicide bothers you. If you give your real estate professional the list of stigmas that concerns you, they could directly ask the owner or the listing agent the questions about the property. For some states, the seller and the agent must not answer such questions about stigma; however, they cannot mislead you by telling a lie. If they choose to answer the queries about stigma, they must answer truthfully.
However, when the seller doesn’t want to answer your question, this may be seen as a red flag indicating imminent danger. If this is the case, you can proceed with the purchase even without getting any answer from the seller – this is somehow a bit of a dangerous move. If you badly want that house, you are free to buy it. But, you must be ready for the consequences of the things that you didn’t want to just happen before your eyes. Another option is to find a different home to purchase – this is advisable, especially when it concerns your mental health. Remember that you are the one who will stay inside the property and the previous owner. You will just be wasting your time, effort, and money if you are not sure of the things, especially your home.
According to Jane Phillips, a psychic, medium, and paranormal investigator for Geyser Energy Clearing Services, in Santa Fe, New Mexico, buyers might want to look for the unusual amount of repairs conducted for the last months or even years because this could indicate some paranormal activity.
If you want to go for the extra mile and to make sure that unwanted spirits do not inhabit your home, call the professionals. The medium or paranormal investigator can give you the right service regarding those uninvited guests of yours.
However, despite the given tips to avoid jumping into a stigmatized house, we cannot deny that there are still some who wanted it because of its friendly price. In our evolving society, the prices of properties and houses continue to rise. Because of this, some tend to buy the stigmatized but cheaper ones.
According to the recently conducted research by Realtor.com, where one thousand people had participated, out of three buyers, one is willing to buy a particular property or home if they could get great deals. Above all the age groups, millennials tend to take this kind of challenge to get a lower price.
An example of this massive price reduction because of some spooky stories is the Victorian. It was built in the year 1912. The fine details from its original Victorian architecture, such as crown moldings, a sun porch, and the staircase, can still be seen even though it was built a long time ago. The property was listed for nearly 900,000 US dollars a couple of years ago; then, after the 88.88% price reduction, it can be bought for just 100,000 US dollars. If you are brave enough to shake off those spooky stories and manifestations of spirits, this could be a great deal for you.
Seventeen percent of the millennials say they are amenable to experiencing or seeing paranormal activities inside the property they bought to earn a good deal. Other generations do not oppose this kind of idea. Thirteen percent of Gen X and also thirteen percent of baby boomers also agreed that they would purchase a property or house with paranormal activities for a lesser price.
About 10 percent of Gen Xers were most likely to brave a poltergeist to get large rooms or a better neighborhood. While 13 percent of the millennials would choose a haunted house to get a better community, 12 percent would choose a haunted house to get a large space or a backyard. However, the generation of baby boomers was the least one to consider when selling a haunted home because they least likely purchase one.
Although there are many articles and videos about the haunted houses, most buyers don’t know that their future home was haunted. About thirty-four percent of sellers only disclose ghosts’ stories to the interested buyers, and the other twenty-seven percent would only tell about this when they are asked about it.
In general, stigmatized properties tend to be on the market for a long time and are sold under the market value. Some sellers renovate the house to make it more appealing to avoid the buyers’ questions about the house’s terrible past. Maybe, sometimes aesthetics can save you from the numerous inquiries you may get, but that’s not always the case. The decorations and the likes do not always click with the buyers. They tend to be more rational rather than emotional. They are thinking of what could happen after this and that. So, hiding the terrible past with colorful walls and modern designs is not always a good thing to do.
What can I do if I am a seller of the property or house?
The real estate professionals would likely say that don’t go on a particular track wherein you could be asked to bring up the property’s stigma. However, it would be best to be honest when asked about this thing; otherwise, you will be held liable for misleading the buyer. Whether the stigma of the property was only psychological but not material, there is still a gray area to this.
If I am a real estate agent, what should I do?
It’s simple, even if you are only just an agent or broker, you still need to perform and do the best practices. Be honest and straightforward. As real estate agents, we don’t want to ruin the future of our clients. Because we are with them when they are still looking for their future home, and hiding something from them is a total betrayal. We are building relationships with our clients, and dishonesty will absolutely ruin this.
If I am just a buyer, what can I do?
When you are looking for your future home, you will most likely talk to a real estate professional with regards to the things you wanted. You also need to discuss what you didn’t like so that your agent can quickly provide the list of the property that suits well with your preference and budget.
Your real estate professional will help you to decide and will always present choices that fit your preference. However, as a buyer, there are also things that you need to ensure for your agent to find the right property.
- Schedule a second showing of the property if you are still interested but not quite sure – this step will probably help you arrive at a firm decision because there is always something new in every encounter. Even if you are visiting the same place repeatedly, there are still new experiences and discoveries.
- Ask about the specific things in the property – some sellers and agents include furniture and designs when you buy a property; however, not all. In order to avoid the pain of expectation, don’t be hesitant to ask. Again, this will always help you to decide whether this is worthy of buying or not?
- Ask the real estate professional – to ensure that you are not missing any point and details; always ask your real estate professional. Ask them to search for issues regarding the title of the house or even the building design restrictions.
After all the given information and a series of dos and don’ts, we still have a question to ask. Is it okay to buy stigmatized properties? In monetary terms, purchasing stigmatized properties is always a good deal because it is under the market value. By series of renovations from the exterior to the interior, you can convert it into a profit. There are types of stigma that fade over time; however, they cannot be forgotten. So, in this case, you need to gamble. Events that do not reach the news probably will not hinder or will not affect the property’s value. However, the property could still be an object of attention for a long time to the people around it or its history. You just need to be ready for the questions if you are a seller, realtor, or a buyer.