Stigmatized Homes

 Selling a home can be a challenge of its own, let alone if the house was the scene of a murder, a sex scandal or a messy divorce, or thought to be haunted.

In the real estate profession, a house with such a history is referred to as a “stigmatized home.”  There are different degrees of how stigmatized a home can be. Murder has the greatest impact on a home’s saleability; suicides and hauntings come next, followed by illicit sex and celebrity infidelities. 

If a home is stigmatized, how much value does the property loose?  Will it ever sell? 

In Ontario alone, there are hundreds of homes, condos and apartments that were the site of gruesome crimes.  Additionally, there are many alleged haunted homes in Toronto.  (If you are interested, the book “Haunted Toronto,” by John Robert, explores the many buildings that may be haunted in Toronto.)

Some of these stigmatized homes gain much media attention.  For example, the now demolished Paul Bernardo home in St. Catherines and the Mississauga home of Catherine Demeter, where Ms. Demeter was murdered in 1973, both drew much publicity.  These well exposed stigmatized homes would be known to the buyer prior to purchasing the property.  However, there are many homes where the buyer may not have knowledge that the property was in fact stigmatized.

 Unfortunately, Ontario has no laws that require disclosure if a house was indeed “stigmatized” or haunted.  A seller does not have to disclose any information about murders, suicides, etc. that have occurred at the home.  Realtors, however, are required to disclose any factor or variable that may adversely impact property values.  This includes psychological factors.  Any stigma which a realtor has awareness of must be disclosed.  How long down the line does this obligation extend?? The answer appears it may be permanent.

Let’s review some well known homes that were stigmatized and see how it affected the seller’s ability to sell the real property.

The home where Nicole Simpson was murdered sold for $595,000.  This was $200,000 less than she paid.  Today, it is on the market for 1.8 million dollars.

 Another illustration is the Boulder, Colorado home where six year old Jon Benet Ramsey was found strangled approximately ten years ago.  The coverage of this story was extensive and detailed.  The home has changed hands three times since 1996.  It has appreciated 60% during this period which is nearly triple the appreciation rate of Boulder, Colorado during that period.

Research shows that time will typically soften most stigmas.  It appears if one holds on to a property long enough people tend to place less significance on the event.

 A few years back, I was involved in a sale of a property where a suicide occurred.  I did disclose all pertinent facts and there was no question many buyers shunned away from the property.  (The property did sell, albeit at a discounted value).  Now many years removed, I believe if the property was to go back on the market, it would be significantly easier to sell.  This is consistent with the examples provided in this article.

There may be legal recourse for a buyer if he/she was duped into buying a stigmatized home, this includes possible rescinding of the deal.  Unfortunately, today there doesn’t appear to be available a comprehensive list of stigmatized properties in the greater Toronto area.

As stated earlier in this article, the laws in Ontario do require realtors to disclose any occurrence that may hinder the value of the property.  As long as full disclosure is made, the buyer can make their own informed decision.