With Halloween around the corner, you might be wondering…. do I have to disclose my house is haunted? Or if there was a murder or a suicide in the home? So a stigmatized property may or may not have to have a disclosure to the potential buyer depending on the state you live in.
Do I Disclose My House Is Haunted?
When we talk about haunted houses fo sale, we classify it as stigmatized property or home.
What does stigmatized mean? It means to mark with disgrace or infamy.
A stigmatized home could include:
- A haunted house
- A home that had a murder
- A home where the owner committed suicide
- A home where a crime was committed
- A high profile house (like the house on Breaking Bad)
A stigmatized property is a home that is “psychologically impacted” by an event or events with no physical damage to the home. It is strictly psychological.
Massachusetts Disclosure Laws on Psychologically Impacted Homes
A Massachusetts real estate agent must disclose any material fact known about the house that could affect the value.
Now let’s face it a recent murder or a rumored haunted house is going to be a tough sale to a home buyer.
But, oddly enough a “stigmatized house” in Massachusetts is not an issue that must be disclosed to the home-buying public.
The seller or listing agent is well within the law by not disclosing such events as a haunting, murder, suicide or other crime that may have previously occurred in a home.
Many years ago I listed a home that had a recent murder occur inside the home.
The house was popular and received offer after offer only to fall apart after the buyers found out the home had a murder.
The homebuyers and buyer’s agents were angry at me for not disclosing the fact that the property was psychologically impacted by murder.
I immediately got on the phone and called a real estate attorney I work with and he said it is not an issue that must be disclosed and to do so without my client’s permission would put me in violation of agency law.
Basically, my fiduciary responsibility was to the seller. The seller did not want me to disclose, so I could not do so upfront.
Other States Regarding A Stigmatized Property
Before thinking you do not have to disclose a psychological event, check the laws in your state. Laws vary greatly from state to state on what must be disclosed to a potential home buyer when it comes to stigmatized homes.
In Alaska, a listing agent must disclose if a murder or suicide occurred on the property the past year. The agent is not required to disclose if they did not know.
California requires the owner of a home to disclose if an occupant of their home has died in their house in the past three years. Most states that require a death to be disclosed cap it at one year.
In Connecticut, nonmaterial facts like murder or felony do not have to be disclosed.
In Iowa, it is the responsibility of the buyer to discover any “psychological defects” in a home. No disclosure is required.
How Do I Avoid Buying A Haunted House?
Ask!! While an agent nor a seller does not have to disclose upfront about a psychological impact or defects, they are bound by law to answer all questions truthfully when asked.
So if it is important to you not to buy a haunted home, one that has had a murder, suicide or major crime committed in it, get a list of questions together to ask before writing an offer.
By the way, Google is a great way to find out if the home you are interested in is sitting on a superfund site! What did we use to do before Google?
Sellers And Their Stigmatized Home
This is obviously a very controversial subject and the law varies greatly. So if you do own a stigmatized house that you want to sell, I always recommend talking with a real estate attorney.
Here’s a great article from Richard Vetstein, a Massachusetts Real Estate Attorney, about Dealing with a Stigmatized House.
My limited experience in this matter, having gone thru selling a physiologically impacted home, carefully consider disclosing upfront any issues impacting the home.
If the issue is recent and in the news or it is a highly known fact about the house I would suggest disclosing to the buyers before viewing. Otherwise, there will be a lot of work done and deals falling apart.
If it is an older issue that the community has forgotten about then consider not disclosing the issue. Either way, talk to an attorney!
Other Real Estate Resources:
The Economist says that stigmatized properties and haunted houses for sale definitely scares off buyers and impacts value.
Bill Gassett states “buyer beware” when buying homes with an emotional impact from haunted houses to homes with a murder or suicide.
Find out what home sellers should be disclosing with advice from Paul Sian.
Happy House Haunting!!