Most people are looking for a scare this time of the year, what with Halloween creeping upon us.
We pop in scary movies about ghosts, monsters and haunted houses.
But, would you want to live in one?
When it comes to buying real estate — and, it may seem like the last thing to worry about — how much do know about that home’s past?
A lot can happen in a home that can affect the value in a sale; from mildew and water issues to grow-ops and even murders.
Barry Lebow, a specialist in stigma and agency matters and contributor to Real Estate Magazine wrote: “Stigma is the effect that lingers after the cure.”
Stigma, Lebow said, can be real or perceived.
This means a home viewed negatively upon by neighbours and the community, such as a murder house, can be just as stigmatized and devalued as a home with a mould problem.
“Sometimes public opinion or word-of-mouth can result in the highest loss in value,” he writes.
“Once the community knows of a problem, from a murder in the house to a grow-op, the word is out.”
Once the word is out, the home will be a tough sell for any real estate agent.
This may result in a reduced ticket price to a longer stint on the market.
But are real estate agents required by law to disclose this kind of information to potential buyers?
In the U.S., laws require sellers to disclose whether there has been a suicide or a murder within a property, so long as the seller knows about such an incident that has taken place within three years.
In Canada, the rules are vague. Lebow states that in Canada, only Quebec has a murder disclosure law.
In other provinces, the responsibility seems to fall on real estate organizations in charge of creating the code of conduct for the region’s real estate agents.
The Real Estate Council of British Columbia (RECBC) outlines 4ealtors may answer potential buyer’s questions about stigma directly or decline to answer the question and advise them to conduct their own investigation.
RECBC said stigmatized property or “psychologically impacted property” can include houses that have been reported as haunted, the property was robbed or vandalized, a death occurred in the home, a previous resident was suspected of being an organized crime gang member or a registered sexual offender is reported to live in the area. Although these things don’t affect the structural soundness of the home, they can devalue the property or put off potential buyers.
As a buyer, it’s important to do thorough research on the property. Google it, search for the address in local news websites.
And be clear while speaking with your realtor — let them know what stigmas you would be comfortable with, and which are absolute deal-breakers.
Perhaps living near a graveyard would be OK, but living in a home linked to organized crime is a no-go.
But keen stigma buyers must keep in mind they may not “scoring” that deal they think they might be by purchasing a home with history.
Most times the home is listed for the same market value it’s worth as long as the stigma associated with the home does not harm health, safety or security of future owners and residents.