Property Stigmata

By
Real Estate Broker/Owner with Providence Group Realty TREC# 0608931

While the word "Stigmata" may prompt images of of Rupert Wainwright's 1999 horror flick, Buyers and Sellers should be aware that certain property conditions could leave a mark on property value.

The word 'stigma' is defined as "a mark of disgrace or infamy; a stain or reproach, as on one's reputation" (Dictionary.com). The plural form of the word is 'stigmata'.

What Is A Property Stigma?

A property stigma is a condition that lowers the actual or perceived value of the subject property due to adverse conditions or tragic events that have occurred on the property - but not relating to the property itself. Disclosure requirements vary from state to state, and by Seller type. Here are a few examples:

  • Property has a fire stigma
  • Property has a flood stigma
  • Property has a dark history stigma relating to murder, suicide, or death
  • Property has a haunting or paranormal stigma
  • Property has a pending lawsuit stigma
  • Property has a debt stigma
  • Property is overbuilt for area
  • Property is located near commercial property
  • Property is located within visible distance of high voltage power lines
  • Property is located within visible distance of wind farms
  • Property is located within visible distance to cell phone tower(s)
  • Property is located near active rail lines
  • Property is within proximity of prior sink hole activity
  • Property is located near a cemetery or burial grounds
  • Property is located near an apartment complex
  • Property is in a high crime or high violence area
  • Property has drug-related manufacturing or trade history
  • Property has other crime-related history
  • Property has history of diseased occupants

This is not meant to be an all-inclusive list. A google search for "stigmatized properties" will quickly reveal other circumstances that lend to tarnishing a property's reputation.

Due Diligence

There are a few websites that promise help toward identifying stigmatized properties. DiedInHouse.com and Housecreep are two more notable sites that are beginning to gain better traction.  A Buyer simply cannot depend on a Seller's Disclosure of items to protect them from any concerns of this nature. Laws vary regarding disclosure requirements, and Sellers may themselves be unaware of an existing stigma. 

The same good advice that goes for purchasing ANY property applies... do your  homework. Search the address online for news stories and county clerk records. Search public databases for registered sex offenders and police blotters / crime reports.  Ask your Realtor® to pull up past property listings and past documents stored in the MLS.  Meet -- and talk with -- the neighbors. Ask the Seller specifically about any concerns you might have, and request a CLUE report. A little bit of foot work goes a long way toward gaining information that would otherwise never land on your radar.

Do Stigmatized Properties Sell?

Stigmatized properties can and do sell... for the right price.  According to Randall Bell of Bell Anderson & Saunders who specialize in assessing disaster-damaged properties and murder homes, "Stigmatized homes can be a bargain and a great investment.  A buyer can expect to pay 10 to 25 percent off regular market prices for stigmatized homes" (DiedInHouse.com. 3/5/2015).

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Tags:
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Rainmaker
431,709
Betsy N. Robinson - Serving the Sandhills, NC
Everything Pines Partners, LLC. - Whispering Pines, NC
CNS

With the dramatic change in Home Care and Hospice Options many terminal patients are chosing to pass at home rather than at a healthcare facility.  Agents should play our part in educating Buyers about these changing social attitudes and help to assuage the former stigma regarding a home in which someone died.

May 17, 2015 09:18 PM #1
Rainmaker
158,855
Amanda Thomas
Providence Group Realty - Plano, TX
​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™

Very good point, Betsy N. Robinson. Do you have any tips on how to approach this subject? Perhaps you could blog about it? :-) (Hope you will!)

May 17, 2015 09:22 PM #2
Rainmaker
3,171,097
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Amanda ~ had not head of thse sites before, but will put them on my list to check out. A great post outlining things that can stigmatize a property.

May 17, 2015 09:30 PM #3
Rainmaker
431,709
Betsy N. Robinson - Serving the Sandhills, NC
Everything Pines Partners, LLC. - Whispering Pines, NC
CNS

The first that comes to mind is to emphasize the wonderful Home Health options available in your area, and the new choices they provide caregivers to carry out the wishes of their loved ones to pass at home when the time comes. 

May 17, 2015 09:32 PM #4
Rainmaker
2,970,104
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Once those properties have that stigma attached it takes time to turn them around.  It can be done and they do sell

May 17, 2015 10:36 PM #5
Ambassador
2,880,550
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

A few years ago we listed a home that not one but two murders had taken place at two different times.  Sold pretty low but it did sell.  I suspect that in the next 15 or so years most people in town in the real estate business will have forgotten and it won't matter anymore.

May 17, 2015 11:46 PM #6
Rainmaker
1,554,099
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Amanda Thomas Great post and when we discover any property does have a stigma, we do diclose to our principals immediately. We have actually had clients bring in mediums to determine if there was any lingering soul in a potential home purchase.

May 17, 2015 11:55 PM #7
Rainmaker
5,458,739
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is a very good list of possible concerns for prospective home buyers. All need to do their preliminary research on the neighborhood and the specific property.

May 31, 2015 02:39 AM #8
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Rainmaker
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Amanda Thomas

​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™
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