Growing up, many, if not all of us had stories about the haunted house down the street. The house that, no matter what, always seemed to be empty, despite multiple attempts to sell it. This type of home is what is considered a stigmatized property.
Know the Different Types of Stigmas
One of the main things about stigmatized properties is that there are often no physical defects to the home that would affect its ability to be safely lived in. Instead, it suffers from what is known as a psychological impact. This means that the home has a reputation in one form or another that makes potential owners unnerved to live there. For example, a home that someone died in.
A home can become stigmatized for a variety of reasons including, but not limited to:
- Debt stigma: The previous owner had debt which is still attempting to be collected by debtors, who are now harassing the new owners. This is especially prevalent if the methods of collection are illegal or aggressive.
- Criminal stigma: The home was the scene of a crime.
- Murder/suicide stigma: A murder or suicide occurred in the home. In many states, these have to be disclosed to buyers.
- Phenomena stigma: The home is considered haunted or the location of supernatural or unexplained events to the local community.
- Public stigma: The home has a widely-known reputation from either a haunting, infamous past resident or even a famous home that attracts unwanted tourists.
Not All Stigmatized Properties Need To Be Disclosed
The legal language surrounding stigmatized properties that are psychologically can be tricky. This is because, depending on where you live, those stigmas may or may not have to be disclosed to sellers—such as deaths. For example, in California, sellers and realtors must disclose a death in the home if it occurred in the past three years.
Otherwise, buyers must do their due diligence in researching the home, following the principle of “let the buyer beware.” Always ask questions about the home you plan on purchasing. Even if a state doesn’t require a seller to disclose certain information about the property, duty of honesty requires them to disclose when asked. If a buyer doesn’t ask, finds out later, and state law does not require disclosure, then there is little they can do. However, if the seller misrepresented the home, the buyer can take legal action if they so choose.
Stigmatized Properties Can Be a Good Deal
Since a stigmatized home can remain on the market for a long time, often with a lower selling price, they can be a gem to new homeowners who can look past its reputation. But, before you go buying a stigmatized property, or any other home, contact the expert agents at Merchant of Homes. We will work with you to manage your expectations when buying a home or property, ask the right questions, and help you find what you are looking for and a price you can afford.