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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