How Does A Death or Suicide Affect A Property’s Price?

By
Education & Training with SH RE

Death is a traumatic occurrence that can impact us in many ways. Unfortunately, in the real estate industry, death can influence the value of a property, especially if the death occurred unnaturally. Here's how death and suicide can affect the sale of a home, along with some disclosure advice to help streamline the selling process.

 

Why it's an Issue

Anytime a home is linked to a funeral, it will affect the selling price. In the real estate industry, properties that have been the scene of a death are often said to have "psychological" damage, as opposed to physical damage such as a failing foundation or a leaky roof. A death can turn off certain sellers who are either superstitious or concerned about a home's safety. That said, the extent to which it would bother a homebuyer usually depends on how the death occurred.

 

While some people have no trouble with the idea of a senior citizen succumbing to natural death in a home; other deaths are outright deal-breakers. In some instances, a home's psychological damage is so significant the property is considered “stigmatized” making it less valuable. a good example would be a home that played host to a violent or well-publicized suicide or murder. While it may sound ridiculous to certain people, some homes can even become less valuable due to widespread rumors of hauntings.

 

How it Affects Price

Anytime a home has a feature that makes it less desirable to buyers, it will become harder to sell. When a death causes a property to linger on the market.; the seller is likely to have to lower the asking price to pique interest in reticent buyers. How much depends on the market, but experts say the amount could be somewhere between 15% – 25% on average.

 

Does it Always Reduce Property Value?

While non-natural deaths can reduce a property's market value, this isn't always the case. Take the JonBenét Ramsey house for instance. The high-profile murder turned the home into a veritable tourist site, keeping it in the news for several years. When the home was first listed for sale, it was purchased by an investment group for $650,000. Shortly thereafter, the home was sold for more than one million dollars to the daughter of television evangelist Robert Schuller.

 

More commonly, however, unnatural deaths raise concerns among buyers. The average person does not want to live in a home that's known for a high-profile death. They are also likely to have concerns about the home's location, especially if the murder occurred as part of a home invasion. In general, sellers will have an easier time selling a home if the death appears to be an isolated incident. That said, it's quite likely that a prospective buyer will use the death as leverage even if they don't actually harbor any real concerns about the event.

 

Necessary Disclosures

Because certain buyers have concerns about purchasing a home in which a person has died, most states have laws requiring sellers to disclose the occurrence of such an event. With that said, these requirements will vary by state. In some states, for instance, deaths due to suicides, natural causes, and accidents unrelated to the property do not have to be disclosed.

 

On the other hand, sellers are required to disclose deaths occurring as a result of a violent crime or the condition of the property. If, for example, a child drowned in a swimming pool without a safety fence, the seller would need to disclose the death even if the defect had been repaired.

 

Certain states have very strict laws when it comes to informing buyers of a death. If you live in California, for example, you are required to disclose whether any kind of death occurred on a property within the last 36 months. On the other hand, in some states including Pennsylvania, Arizona, and Georgia, disclosures of homicide or suicide are not required.

 

Even in these states, however, sellers should err on the side of caution and reveal the death to avoid potential lawsuits. Buyers will almost always hear about these occurrences from the neighbors. They may also be able to find out about the death by doing a little research on the internet. When they do find out, the shock could cause them to wonder what else a seller is hiding and back out of a purchase contract. If you are in doubt of your disclosure requirements, talk to your agent to consult an attorney.

Comments (1)

Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great month.

Feb 09, 2020 03:20 AM