Stigmatized Property
KCTV5 reported, “The housing market in Kansas City is hot. People are buying houses quickly, sometimes before digging into the history of the home.” In this hot market beware of Stigmatized Property.
“Think of all of the things you are legally required to know when you buy: Leaky roof, leaky basement, lead paint, etc.”
‘Those are just a few of the details you think might help you decide to pull the trigger on a home. But that’s hardly the whole story for some houses.”
“Real estate agent Curtis Jay discovered something in a house he was prepared to show his client— a client who was interested in buying an investment home in Kansas City, KS. “
“Once I walked in, I saw a search warrant that said Wyandotte County—search warrant for this home for murder. That’s when I started to question what happened inside this house,” Jay told KCTV5. “
“What happened was not on the MLS listing. “
“What happened in the home was a triple homicide four months before the listing the home.”
Stigmatized Property
Houses in which a murder or suicide took place or where rumors of haunts or poltergeists abound, fall under the subject of stigmatized property. “Stigmatized properties are homes where a real or rumored event occurred that didn’t physically affect the property but could adversely impact its desirability.”
A seller must disclose in writing that there are no hidden defects in the home. The common law has for decades imposed duties on sellers of real estate, especially private houses. A realtor discloses to the buyer any material facts known to the seller affecting the value or desirability of the real estate for sale.
If you are a seller of a property where there was a gruesome murder or if you believe you own a haunted house, do you have an obligation to tell potential buyers? No, you don’t legally. The realtor representing the seller has a fiduciary duty to the seller. If the seller is adamant that the information about a haunted house stays hidden, you may not disclose that information. You may not want to represent the seller, however.
If you are the buyer, a stigmatized property could be a material fact in determining the value of the house. In this case, if you are a realtor representing the buyer, that kind of information should be shared. Without telling your buyer, you could be misrepresenting the property and lose the buyer’s trust AND BE SUBJECT TO A LAWSUIT.
Some realtors like to ask
Some realtors like to ask, half in jest if there have been any murders or suicides on the property. If it is material and recent, the realtor should disclose the facts. The farther back in history the event happened, the better for the seller. Hauntings and superstitions are of the kind that you had to be there to believe.
It is not all bad news for stigmatized property. RealtyBiz News reports on a recent survey: “With tight inventories across the nation leading to a dwindling supply of homes available for sale, a large number of consumers say they’d consider living in a haunted home if it met their needs.”
The spooky finding came from a recent survey of more than 1,000 consumers by Realtor.com. The survey found that 33 percent of respondents would live in a haunted house, while another 25 percent would consider the idea.
Terra Firma Property Solutions, LLC is a professional, full-service real estate solutions firm.
We buy and sell properties throughout the greater Kansas City area. We specialize in buying distressed homes, then renovating and reselling them to home buyers and landlords. Terra Firma Property Solutions: excited to be part of the economic rejuvenation of Kansas City and its surrounding areas.
Call us today at (816) 866.0566
