Halloween is right around the corner and ghoulish conversations regarding real estate are bound to come up. Here are some common questions and helpful advice for dealing with Haunted Houses and the like. 

Did you hear what happened?

A real estate agent was telling us the shocking story that happened after a closing. Finally, following months of searching, his buyer fell in love with a home, placed an offer, and the condo closed with no problem. Shortly after closing, keys in hand, the new owner stopped by to take measurements for her new furniture, which was expected to arrive in a few days. As she was walking out, a neighbor showed up and said, “Are you sure you want to move in? The previous owner slit her throat in the bathroom and bled to death.” The new owner freaked out and called her agent right away. The agent said he was aware that the previous owner had died. No details were asked beyond that as there appeared to be no cause for concern. However, now the new owner feels very uncomfortable moving in and places the property back on the market that week with the same agent.

This once-hot property that sold in less than 30 days, now sat without any offers. Why? Every time an agent brought a buyer, the neighbor stopped by and told them what happened. The potential buyers got spooked and ran. This home sat vacant and lonely until finally someone said yes….a year later.

Did the animals perceive something the humans couldn’t see?

This incident took place in Long Island, New York. A couple bought a home and moved in with their two teenage children, a cat and a dog. One of the sons refused to sleep in his room because it was ice-cold. The room was a completely different temperature than any of the other rooms. It was checked by professionals who found nothing wrong with his bedroom. Although, yes, it was a different temperature than the rest of the house. What made it creepy for them was that the dog and cat would never enter the room. When the son tried to get the dog to follow him inside the bedroom, it would begin howling at the entrance. The cat would run away. Did the animals perceive something the family couldn’t? The son preferred to share a room with his brother or sleep on the couch rather than ever go into his bedroom. The owners chose to stay, still live there and have had no other problems. They shared the story as an example of possible “spirits” inhabiting the home.

 

Stigmatized Properties

The real estate examples above could fall into the category of a stigmatized property. The National Association of REALTORS® (NAR) defines “stigmatized property” as that which has been “psychologically impacted by an event which occurred or was suspected to have occurred on the property, such event being one that has no physical impact of any kind.” In other words, something happened in that property that didn’t affect the physical condition of the property but could have an emotional or psychological impact on people. Events such as violent murders, human trafficking or famous adulteries that took place in the property fit this category.

 

Questions Agents Ask

As real estate agents, the questions we ask ourselves when facing these types of properties are, do the sellers need to disclose this information? Should the buyers’ agent have asked how the person died? What if the listing agent did not know? Or perhaps the listing agent knew and failed to disclose? It is not a far-flung occurrence to represent a property where someone has died. Do we inquire as to how the person died in the home or its history?

And how far do we take it? Most homes have emotions in them as this is what occurs in our day to day lives as human beings. Does divorce constitute a stigmatized property? Remember the movie, “War of the Roses”? Under the above definition, no, unless a murder, death or suicide has taken place.

And what if the seller is directly asked a question concerning the property, but withholds the truth in fear of losing the sale or having to reduce the price? Or what about the neighbors? Are neighbors liable if their actions prevent the home from selling?

Don’t get spooked, or worse, sued, when representing this type of real estate. Make sure you understand and are in compliance with national and state laws. Ask your legal experts for advice.

 

What Are Your Disclosure Requirements?

Remember the phrase, caveat emptor, “let the buyer beware”? According to the American Bar Association, “in recent years, many states have even enacted ‘stigma statutes’ that limit sellers’ and brokers’ liability for failure to disclose stigmatizing details to potential buyers.” However, every state varies widely on their definitions of what the seller has to disclose if any such history does exist that could categorize the property as stigmatized.

For example, in California, sellers must reveal if a death in the home has occurred anytime in the past three years. This includes death by natural causes (although certain types of deaths, like those from AIDS, cannot be disclosed). If a buyer in California asks about a death that occurred at any time, even longer than three years ago, the seller is required to provide a truthful response.

In Alaska and South Dakota, only murders or suicides must be disclosed if they happened within the past year. In Florida, the statutes declare that failure to disclose homicide, suicide, deaths, or diagnosis of HIV or AIDS infection in an occupant of real property is not a material fact that must be disclosed in a real estate transaction.

I’m no legal expert, so again, be sure you check with your local legal experts to determine what is your required legal disclosure. Nevertheless, as an experienced Realtor, it has been my experience that if a buyer or real estate agent asks for specific information about the property and its history, and you know the answer, it is important to tell the truth. As a professional Realtor, lying can result in misrepresentation. It may also be the death of your career.

 

A tip for buyers

For buyers wanting to further explore the neighborhood and the homes they are interested in, my recommendation is that they first do a Google search of the address of the property, then the name of the street and the names of the sellers.

Also, a lot of information also can be found through public records by searching deeds, property records and death certificates.

Lastly, to gain further insight on the history of a property and to learn whether a tragedy has taken place, check out this website: www.diedinhouse.com. You can see a sample of the type of reports they do when an inquiry is made on a home. It’s not inexpensive, yet it is a lot less money than purchasing a property and later finding out information that could have saved potential buyers much time, money and anguish.

In the end, it all comes down to due diligence. Armed with knowledge, you and your clients can sleep better at night.

Written for Form Simplicity by Janice Zaltman, REALTOR®, LEED AP, Marketing Coach and Writer with more than 20 years of experience in the sales, marketing and media fields.