The Home Guru: "Did Anybody Die in This House?"

“Has anyone ever died in this house?” was the first question I was asked by one realtor whose clients had viewed one of my listings and liked it. Within the same week, a prospective buyer refused to enter a house because it was diagonally across the street from an 18th century cemetery, even though she had liked the listing tremendously online.

Such questions and concerns fall under the category in real estate of stigmatized properties that, by loose definition, can be the site of a murder or suicide, criminal activity or even a resident ghost.

I don’t know why I was initially surprised by these situations, considering my own case history. My wife and I purchased our first home from a friend in Brooklyn Heights. Our upstairs tenants were a wonderful, cultivated couple, both artists, he a designer for the New York Times and she, a filmmaker. Her official introduction to me the day we moved in was to ask whether the former owner told us that the house was haunted. I simply laughed. Within a short time, I was not laughing about the matter, with clear evidence that paranormal activity was taking place on the premises (but that’s gristle for another story, not necessarily involved with real estate).

While there is great debate about how a stigma can decrease a property’s value, actually, this one helped us. We had opened an antiques shop on the first floor of the house, and The New York Times favored us with a half-page story about a daring young couple who rustled up their deferred down payment for the house by selling off their collection of antiques in the shop and, by the way, the house was reputedly haunted.  The next day, people were lined up to get into our little shop, perhaps due in part to the reported stigma.

About 30 states across the country, including New York, have specific laws stating that sellers and their real estate agents cannot be held liable for not disclosing such nonmaterial or nonphysical defects about a house. This scenario was tested some years ago in a notorious case where a Poughkeepsie homeowner had committed a series of murders and buried the bodies in his basement. The subsequent buyer of the house attempted to sue the realtor for not being informed of this.

Disclosing information about a stigmatized house depends on many factors, mostly on state laws and circumstances surrounding the perceived stigmatization.  Sellers and real estate agents in New York and other states are not required to disclose deaths or hauntings, although most will do so if the prospective buyer asks. However, Connecticut's "Ghostbusters law" requires agents to inform buyers in writing of homicides, suicides, and other felonies if requested to do so by the buyer.

As far as actual physical defects are concerned, in 2002, New York State enacted the Property Condition Disclosure Act that requires sellers to inform buyers of known conditions of the property before the contract is signed. However, there is an option, which most lawyers recommend, that the seller decline submitting the form, but instead transfer $500 to the buyer at the time of closing.

While disclosure laws cover a lot of territory, from legal considerations, agents in most states notify buyers that they must do their own research about such matters as the quality of the local school system or if there are registered sex offenders in the neighborhood.

Effects of so-called stigmatization have varied among subsequent homeowners. The house in which the Charles Manson murders took place in 1969 had a successful sales history after the fact. The house had been rented from a landlord who moved back in just three weeks after the murders and lived there happily for the next 20 years. When the house was offered for sale after that period, it sold in two weeks.

However, according to appraisers who specialize in such homes, highly stigmatizing events can cut as much as 15 percent to 25 percent from the price a home would otherwise fetch. The largest markdowns, they say, are associated with explosive cases that receive broad media attention, such as the “Amityville Horror” house, where the homebuyers claim to have experienced terrible paranormal phenomenon after moving in. Another case is the property at which Nicole Brown Simpson and Ron Goldman were murdered. In that case, the house was on the market for two years after the murders and sold for $200,000 less than what Nicole had paid for it.

Because my home was built in 1734 when people were more likely to die at home, I suspect that there have been many kind, gentle folks who died peaceful deaths in this lovely place, with their families around them.

I plan to place my property on the market next month and if asked if anyone has ever died in the house, I can answer confidently that I don’t know for sure, but given its age and history, I suspect so.

Bill Primavera is a Westchester, NY-based realtor (bill@PrimaveraRealEstate.com who can be reached for questions about buying or selling a home directly at 914-522-2076.