Hauntings, Scandals, and Notoriety—How to Sell a Stigmatized Property

When it comes to unusual things you might disclose when selling a house, there are three possible responses from potential buyers. Some people won’t care; for others it will be a deal breaker; and a third group will think it’s cool. This is true for pink tile in the retro bathroom or the circa 1970s wet bar in the wood paneled basement. It’s also true for a house with a dark past or one with… dare we say it? Ghosts.

Whether or not you believe in the supernatural, the fact is that every house has a history. And sometimes there’s a stigma attached that might be unsavory for potential buyers. Whether the owner is convinced the house is haunted, or if the home was the scene of a crime or traumatic event, knowing how to sell a stigmatized property can be a challenge.

How much should you say about the home’s past? Do you need to say anything at all? The answers depend on the state where you live and the nature of what happened there.

What is a Stigmatized Property?

A news report went viral recently, noting that Zillow was listing a 26 acre cemetery for sale in the Philadelphia area. This would definitely fit the bill of a stigmatized (and possibly haunted) property! But there are plenty of single family homes that have a stigma too, including places like the house made famous by The Exorcist here in St. Louis.

Stigmatized properties are those where events have occurred that have a psychological impact. In other words, while there might be nothing wrong with the structure itself, something about the house or its past could be unsettling or upsetting to future owners. Some things that cause a stigma are:

Unexplained Phenomena

According to a Pew Research Center survey, 18% of adults say they’ve seen or experienced the presence of a ghost. Whether or not you believe in the supernatural, there are plenty of people who do, and insist that they live in a haunted house. Strange noises, flickering lights, inexplicable cold drafts, and the like, all contribute to the belief that the paranormal is at play—and could discourage some buyers.

Natural Deaths

It’s not uncommon for people to pass away at home, and the older the home, the more likely it is that someone has died there. Areas like Soulard and Lafayette Square in St. Louis have many century old homes built when doctors made house calls and the ill or elderly didn’t necessarily go to a hospital. This fact can make some people uncomfortable (and may lead to tales of the lingering spirits of past residents.) 

Tragic Deaths

A history that includes a homicide or suicide can be even more disturbing than a peaceful, natural death. The stigma is heightened if it was a high profile violent death that made the news. Neighbors are likely to whisper for years about the “murder house” on the block.

Illegal Activity

Crimes besides murder can also stigmatize a home. Gang activity, drug manufacturing or dealing, brothels, domestic violence—in addition to damage the house might suffer due to these activities, it will also develop a bad reputation in the neighborhood. Potential owners could shy away from living in a house that is well known for the illegal activity committed there.

Many states, including Illinois and Missouri, require sellers to disclose if methamphetamine was ever manufactured in the home. This is because of highly toxic residue of meth contamination that can be left behind.  

Notorious Locations or Former Residents

Even if something bad never happened in the house, a famous or infamous former owner could make it undesirable—or the subject of curiosity. If the person was a criminal, that’s one type of stigma. But any famous person’s home could be sought out by fans and become a target of unwanted attention or trespassing. The same can happen with homes made famous in movies or on TV.

Vacant, Neglected Properties

When a house sits empty for an extended period of time, it can begin to look like the stereotypical haunted house. The simple lack of regular maintenance can create all kinds of damage, inviting overgrown vegetation, bugs and rodents, storm damage, leaking pipes and more. Worse, it could attract vandals or vagrants who break windows or enter the home and create a mess.

Homes like this can often be found for sale as-is for a low price. Buyers will need to invest time and money to clean it up and make it livable—and to remove the stigma that goes along with the neglect.

What You Must Disclose When Selling a House in Missouri and Illinois

Do you need to let potential buyers know that there was a murder or suicide there? Or that the owner before you went to prison for dealing drugs? Or that you’ve experienced paranormal activity and think it’s haunted? Just how much information do you need to disclose when selling a house with a disturbing, sordid, or unusual past?

Required disclosures are typically limited to what is discovered in a home inspection. In other words, you need to let people know about the physical condition of the house but not anything that may have a psychological impact. This includes both natural and violent deaths, most illegal activity, and any of the other stigmatizing factors we mentioned above.

In the St. Louis region, sellers must tell the truth if asked about anything with a psychological impact, but they’re under no obligation to volunteer the information. They’re also not obligated to research their home’s entire history to find out about past crimes, deaths, etc.

Missouri’s disclosure statements cover mostly structural issues, but not not deaths or crimes, with the exception of warnings about meth production. The state also requires sellers to disclose if property has lead paint or pipes, was previously a solid waste disposal site or demolition landfill, and the existence of hazardous materials. 

Illinois disclosure statements are concerned with uncovering material defects that affect value, healthfulness, and safety of the property. The document covers the same types of issues as Missouri. Buyers must be given information about meth production, but not any other crimes or deaths.

Disclosure Rules in Other States

Laws about what to disclose when selling a house differ from state to state.

In Alaska, California, and South Dakota, for example, sellers are required to disclose any deaths in a house but only if the event happened within three years of the sale. And believe it or not, in New York, there was a court case that led to what was nicknamed the Ghostbusters ruling. It says sellers must let buyers know about any paranormal activity in the purchase agreement, but only if they have publicly stated that a house is haunted by, say, participating in haunted house tours or being featured in books or articles or TV shows. 

Sellers in Arizona, Georgia, and Pennsylvania are explicitly told they do not have to disclose deaths or any psychologically impacting events. Most states, like Missouri and Illinois, don’t even mention such things, allowing sellers to skip any disclosures unless they are specifically asked by a buyer.  

Tips for How to Sell a Stigmatized Property

According to a realtor.com, only a third of the people in a survey said they’d be willing to buy a haunted house. And property with any type of stigma can experience a 10% to 25% drop in market value. Luckily, stigmas tend to fade with time, but if you must sell one of these problematic homes, there are some tips.

• Find and fix problems. There could be a logical explanation for weird, spooky phenomena. Perhaps those strange noises are due to loose siding rattling in the wind or a bird that’s gotten into the attic. You might need a handyman, not an exorcist!
• Make changes. In the case of tragic events or illegal activity, be sure to give the house a thorough cleaning. Consider extensive renovations that change the look of the home completely. In the high-profile murder case of Nicole Brown Simpson, the city agreed to changing the street address to discourage the curious.
• Only disclose what you must. Find out what your state requires you to disclose when selling a house. Don’t lie if asked, but don’t feel obligated to provide any information you don’t have to. 
• Lean into it. Remember that there is a segment of the population who would be thrilled to live in a house that is said to be haunted, or that has a storied past. You can call in a paranormal investigator to learn more about the house (or get rid of the problem) and use the information as a marketing tool. The right agent will know how to attract the appropriate type of buyers.

The most important tip for how to sell a stigmatized property is to find an experienced real estate agent. At Berkshire Hathaway HomeServices Select Properties, our agents have experience with homes with all types of histories. They’ll know the best way to market a stigmatized property while holding themselves to a strict code of ethics, making sure their clients make all necessary disclosures. 

Cover Image by melis82 purchased on Envato Elements

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