(NEXSTAR) — As you may well know, the current housing market is a seller’s dream (and a buyer’s nightmare), but several factors can negatively impact property value and asking price on a home — including in-house deaths, particularly a murder.
Often called “murder houses,” these homes are also known as “stigmatized properties” by the National Association of Realtors. Stigmatized properties include places that have been impacted by events such as murder, suicide, a notorious previous owner, and alleged occurrences like hauntings.
California real estate agent Dr. Randall Bell is a self-described “Master of Disaster” who has helped sell some of the most noted stigmatized properties in the U.S., including the previous homes of Nicole Brown Simpson and John and Patsy Ramsey. Bell is CEO of real estate/economics advisory firm Landmark Research and specializes in real estate damage economics.
“This means I study the effect detrimental conditions have on property values,” Bell told Nexstar. “…We inspect the properties and then develop case studies of other similar situations to determine the most likely impact. We can also study what can be done to reduce any negative effects.”
In an interview with VICE, Bell explained that sellers of “tainted” properties can expect a “15 to 25% diminution in value for two to three years after the fact. Over time the discount evaporates, but it takes 10 to 25 years for the stigma to go away entirely.”
Bell’s data is echoed by that found by Realtor, using public data sourced by DiedInHouse.com, a website that uses property records to tell users whether someone died at a specific address. Data shows house murder sites sell for a median 21% less than their previous sale price and 9% less than the list price. These properties also sell for 15% less than comparable houses in the same zip code.
Washington Post explains buyers have more access to property information than ever, which can add to difficulty selling a stigmatized house at all or for a break-even price. Knowing a home’s backstory can lead to buyers having a predisposed “bad vibe” before even seeing it.
NAR says a property’s stigma can even negatively impact neighboring homes.
Even houses of “famous” murder sites aren’t immune.
The Los Angeles condo where owner Nicole Brown Simpson and friend Ron Goldman were murdered sat on the market for two years before finally selling at a loss of $525,000. Brown Simpson previously purchased the home for $625,000, Realtor explains. The home at the center of the O.J. Simpson murder trial would later sell for $1.72 million after remodeling and an address change.
Sometimes even a remodel can’t save a home from its past. The home of serial murderer John Wayne Gacy was foreclosed on, completely demolished and re-addressed. The new house, atop the site where Gacy killed at least 33 young men and boys, finally sold after its owner cut the cost three times — $30,000 lower than the list price.
Nevertheless, some high-profile murder locations do become commodities, like the Massachusetts home of accused axe murderer Lizzie Borden.
Meanwhile, the Los Angeles site of the 1969 Manson Family murders, where actress Sharon Tate and five others were killed, was sold for $1.6 million ($3.7 million adjusted for inflation) by owner Rudy Altobelli in 1989 — 18 times what the Hollywood talent manager paid for it in the early 1960s. The home, previously located at 10050 Cielo Drive, was host to a string of musicians, including Nine Inch Nails’ Trent Reznor, before its demolition and re-addressing in 1994.
In January, the home built in place of the 10050 site was put up for sale by owner Jeff Franklin, creator of “Full House,” with a list price of $85 million.
But these Hollywood owner stories are the exception, as Realtor reports. Citing public records, it reports that 59% of stigmatized home buyers are everyday people, while 20% are purchased by corporate entities for investment.
The family who purchased the former Arizona home of convicted murderer Jodi Arias told AZ Central in 2013 that the $206,000 they paid for the home, where Arias stabbed ex-boyfriend Travis Alexander 30 times, was “a good deal” and they didn’t consider it a crime scene.
For many regular homebuyers, a “good deal” on a stigmatized property is exactly the calculus behind buying the home.
Do realtors have to tell you about a murder in the home?
Depending on where you live, it can be completely legal for a realtor to leave out a home’s grizzly history.
Experian explains that realtors are legally obligated to disclose “material facts” about a property, but deaths aren’t included under that definition in many states.
Buyers purchasing directly from the homeowner should receive what’s known as a seller disclosure from the owner. As with real estate agents, the disclosure document will list information about the physical home and its land, Nerd Wallet reports. Common items on a seller disclosure are any liens on the property, flooding issues/water damage, and mechanical issues. Unfortunately for buyers, deaths on a property also tend to fall outside of necessary information about a property.
Bell says sellers — particularly in California, which has some of the strictest laws in the nation — should always tell the truth. He recommends that sellers work with qualified agents, brokers and attorneys to mitigate any possible critical omissions.
If you’re buying and want to cover bases about your prospective home, it’s best to find out what sellers are required to tell you in your state. In many states, sellers are only required to disclose a death in the home if directly asked.
(Information from the Nexstar Media Wire)