You visit an open house for a stately old Victorian on a quiet street. It has a wraparound front porch and all kinds of vintage charm … but you can’t help but wonder if that sudden cold draft is the result of poor insulation, or a past occupant dropping by. And the lights on that stunning chandelier are flickering in a way that might foretell an expensive visit from an electrician — or an exorcist.
You want to ask the listing agent if they’ve heard about any paranormal activity on the property. But do they actually have to tell you?
That depends on where you’re house hunting. In most states, the seller doesn’t have to disclose anything. For example, according to Massachusetts state law, whether the home “has been the site of an alleged parapsychological or supernatural phenomenon” is not a material fact that has to be mentioned in a real estate transaction. However, the seller or agent are also not allowed to lie about it.
Minnesota has a similar code, which says that sellers don’t have a duty to disclose whether the home “was the site of a suicide, accidental death, natural death, or perceived paranormal activity.”
Still, a disturbing history like murder can affect the value of a home, said Ryan Dossey, co-founder of the house-buying service SoldFast in San Diego, in an online exchange. He points to search services like DiedInHouse as an example of how prospective borrowers can research a home’s past, uncovering details that a seller might have chosen not to divulge.
A gruesome case of buyer’s remorse
One such incident led to the 1983 court case Reed v. King. Dorris Reed purchased her California house from Robert King, who did not disclose that a woman and her four children were murdered in the home ten years prior. King had even requested that a neighbor not tell Reed about the killings. Reed’s attorneys claimed that while she had paid $76,000 for the home, it was really worth $65,000 because its history seriously damaged its value and desirability.
The courts ruled in Reed’s favor, finding that the home’s reputation affected its property value. Such homes are sometimes called “stigmatized properties.”
For some, a colorful history is a selling point
Not every buyer feels as Reed did. While an oversized skeleton decoration in the front yard is about as creepy as some home buyers are willing to get, others are drawn to the novelty and mystique of certain listings.
“A lot of buyers I’ve worked with love when there’s a deep or haunting history,” said Joe Luciano in an online exchange. Luciano is a Massachusetts Realtor who has shown historic homes in Salem.
For instance, one couple bought a house next to a funeral home. “They pretty much always wore all black, and the first thing they did when they moved in was paint the inside a deep purple color. This home was also right near the Salem Witch House, which, truthfully, was a selling point.”
So you bought a “haunted” house. Now what?
Let’s say you’re not afraid of things that go bump in the night and bought a stigmatized property. Even if you’re not worried about poltergeists, you still may have to contend with human reactions.
“Unbeknownst to me, I bought a ‘murder’ house back in 2021 as a flip that was the site of a homicide inside the property,” Ryan Dossey said.
“We encountered issues with the contractors,” he said, after neighbors mentioned the home’s history. From that point on, the contractors refused to be alone at the property. “It took considerable effort to persuade them to complete the renovation.”
Believer or skeptic, home buyer or seller, it’s important to know your rights when it comes to marketing a stigmatized home, as well as your legal responsibilities. Talk with your real estate agent, be honest with all parties involved, and check your state’s law if it’s relevant.
It’s perfectly reasonable to worry about the effect that such a history could have on your home’s value, but don’t be too discouraged. While some would never dream of buying a home that has a creepy past (real or imagined), you never know when Gomez Addams is prowling the market.
