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What Are Stigmatized Properties?

By
Services for Real Estate Pros with TopRock Internet, LLC

When stories surround a home, making people hesitant about wanting to live in it, it is called a stigmatized property. If the property is rumored to have been home to criminals or ghosts, people often will not purchase it. If the people living in the house before had AIDS, or any other such illnesses, this too can cause buyer avoidance.

Only thirty one states had enacted laws concerning stigmatized houses in 2001. Disclosure pertaining to a stigmatized property was not mandatory by the majority of those laws. Something which may be damaging to the structure has to be disclosed to homebuyers, but superstitions, illnesses and such did not have to be shared.

For states that do not offer exemption to the seller on stigmatized properties, it can be difficult. You might not have to disclose it, if the stigmata is merely a rumor. Because federal housing laws give HIV patients the same rights as handicapped people, it may be illegal to tell new buyers if the previous tenants had AIDS.

Mentioning to the homebuyer that they can research the home's history may be the best solution. You should remember in cases such as a homicide or suicide it is easy to find the truth. News archives at the library will easily show the truth.

Circumstances such as these should likely be revealed. Since it will be fairly simple for the new homebuyers to find the information out for themselves, you should avoid future complications. Once you have communicated the story, homicide or suicide cannot be legally used to change their minds on a deal.

If negativity may affect the sale of your home, research your state laws on disclosure. If disclosure is your state’s law, then you must be sure the rumors are valid. Only then should you decide whether or not to tell the buyer. One rule of thumb, if they ask directly, then disclosure is your safest bet.

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Comments (2)

Dan Edward Phillips
Dan Edward Phillips - Eureka, CA
Realtor and Broker/Owner

Good Morning, very good advice for the home buyer to take advantage of.

Oct 20, 2010 04:09 AM
Paul Walker
Equity Fifty Five Realty, LLC - Scott AFB, IL
Scott AFB IL Area Realtor

Very good information. Stigmatized properties can be extremely hard to sell, and require knowing knowing your state laws on how to deal with the stigma. Good post.

 

Oct 20, 2010 04:09 AM