Selling Stigmatized Homes

Have you ever had that one house on the market for a while? That one house that just “seems” creepy to all buyers? The house that just has a bad reputation to everyone? Well, believe it or not there is a name for homes like that, and just like any other home put on the market, someone wants to sell it.   

These types of home listings are called stigmatized homes. According to Legal Match, “A stigmatized property is a home or apartment where there has been a suicide, murder, cult activity, AIDS, famous adulteries, or other misfortunes and crimes.  Examples include the house that Nicole Brown Simpson was murdered in, which sold for much less than desired.”  

For example, if someone was murdered in a home, that type of home will be considered a stigmatized home. In fact, there are many different types of stigmatized homes.

Types of Stigmatized Homes 

  • Phenomena Stigmatized Home – This is when the home could possibly be haunted, ghost sightings have been spotted or any other type of spooky or paranormal incident that has taken place is this home. Surprisingly, this type of information is required to be disclosed to potential buyers in many states. 
  • Murder or Suicide Stigmatized Home – This type of stigmatized home is exactly how it sounds. It’s when anyone has been murdered or commits suicide in the home. This type of information is required to be disclosed to potential buyers in many states.  
  • Debt Stigmatized Home – Some states require that outstanding debt from the previous owner be disclosed so that buyers can be warned about potential callsvisits and potential liens from creditors if not paid. 

Other types of stigmatized homes include any type of criminal activity that has taken place on the property such as drug dealing or prostitution.  

How to Sell a Stigmatized Home 

So, if you’re a real estate agent taking on the task of selling a stigmatized home, your question may be – “How do I sell it?” We aren’t going to sugar coat it for you, it’s definitely tricky but it can also be extremely profitable if you work hard and follow a few simple steps.  Today, we’re disclosing five ways on what you can do to help you  sell your stigmatized home listing.   

Be Honest, When Asked 

Spencer Peterson at Curbed says, “This is the number one rule.” He also says that, “All ethics aside, honesty is the best policy, because it’ll keep you out of the courtroom.” This is something extremely important to keep in mind as both the agent and the seller. In fact, many states require that you have to disclose past events that might devalue a property and make it a stigmatized home. While being honest can get some in trouble, it always works out in the end.  

Only Disclose What You Have To 

While being honest is important, the key to that statement is to be honest, when asked. Some states do not require you to disclose the property’s specific type of stigma. If that is the case, simply follow the rules and keep quiet, unless asked.  

Market It As An Opportunity 

Who doesn’t love creating a haunted house and profiting off of it? Another way to sell a stigmatized property is to completely embrace it and market it as an opportunity.  

Andrew Schmeerbauch at Clever  shares a story where the owner could have taken full advantage of a business opportunity with the notorious LaLaurie Mansion in New Orleans, Louisiana. “LaLaurie Mansion was the site of a depraved aristocrat’s torture chamber back in the 19th century and is believed by some people to still be haunted. A businessman moved into the mansion recently and reported that it was a spectacular home with no apparent paranormal activity. He did, however, report that the ghost tours that showed up every night and stood below his windows talking and taking pictures were “annoying with a capital ‘A.’”

While the nightly ghost tours might have been “annoying” to this businessman, don’t you think if he wasn’t so scared he should have turned this into a business opportunity? Framing a home might be the best opportunity you have to counteract public perception.  

Look Into Renters 

Another thing to look into is renters to live in the stigmatized home. Oftentimes, renters won’t really care since they are renting the home and don’t have a vested interest at the end of the day. It’s also much easier to sell a home when it’s occupied with the renters items, and it’s easier to say someone else has lived there since whatever incident may have happened.

Give it a Little Refresh 

Another way to sell a stigmatized property is to refresh it with a little facelift! A few renovations and cleaning can go a long way. Spencer Peterson at Curbed talks about an experience Randall Bell, who runs an appraisal firm specializing in real estate damage economics, went through after selling a stigmatized home. “Bell once worked a case where, after a family had moved into their new home, the daughter found a bullet hole in her closet. The father proceeded to trace the path of the bullet back to its probable starting point, in the garage, where he found “brain matter” below the water heater, where the previous occupant had committed suicide,” says Peterson.  

As you can imagine, the family had never heard of this event prior to buying and moving in. Sothey ended up suing the brokerage and previous owners. Which brings us to this: if you know of any sort of incident that has happened in your listing, check anywhere and everywhere to make sure “brain matter” isn’t left over. Do your part and clean up with a little refresh! 

Wait it Out? Or Convince the Buyer? 

Although you want this property off of your hands and your sellers hands, try convincing your sellers to wait it out a little bit if you haven’t received any offers. By doing so, they (hopefully) will not end up losing money.  

However, on the flip side you can convince buyers that stigmatized homes often come with a major discount.  

Andrew Schmeerbauch at Clever gives a great example on this, “Remember the Heaven’s Gate cult that committed mass suicide in a San Diego mansion 1997? Before the newsworthy event, the property was worth $1.6 million but later sold for only $668,000. That’s nearly a million-dollar discount because of some bad publicity.” 

So are you ready to sell your next stigmatized home We hope these few tips help with getting your ghosts and bad vibes out of the way for your potential buyers. Happy selling!