Stigmatized property: What you should know before you sell

On Behalf of | Apr 25, 2019 | Blog

If you’re selling a home, you’re likely conscious of the fact that you need to disclose any known defects to potential buyers. However, some defects involve more than plumbing issues or leaky roofs. Some properties are considered “stigmatized” for reasons that are disturbing and unique.

What’s a stigmatized property?

It is one that has a history that might give buyers pause — even if you aren’t particularly bothered by the problem. This could include property that:

  • Was the scene of a murder or suicide in recent history
  • Has been used as a graveyard (especially if connected to a crime)
  • Was associated with a notorious crime (like the Lizzie Borden house)
  • Has a reputation for being haunted (particularly if it appears on local ghost walks or has been featured in documentaries about paranormal activity, like the Amityville Horror house).

While that last item may sound peculiar to many, there have been real instances where a seller proudly advertised a home as haunted prior to selling it and then hid its reputation from an out-of-town buyer to make a quick sale. The buyer was quite naturally upset and sued.

What other things could make a property stigmatized?

Some issues may not fall cleanly into one of the above categories — yet still present a problem. For example, maybe you’re the realtor in charge of selling a property that was seized from a local drug dealer and former clients keep dropping by because they’re unaware the owner has gone out of business.

The best rule to follow is this: If you’re wondering if you have to disclose something, the odds are high that you should. If you’re still not sure, you should speak to a real estate attorney about the issue — before you end up in litigation.