(NEXSTAR) – As you may know, the current housing market is a seller’s dream (and a buyer’s nightmare), but several factors can negatively affect the property’s value and a home’s asking price – including internal deaths, most notably a murder.
These homes are often referred to as “murder houses” and are also referred to as “stigmatized properties” by the National Association of Realtors. Stigmatized properties include places affected by events such as murder, suicide, an infamous previous owner, and alleged events such as car chases.
California real estate agent Dr. Randall Bell is a self-proclaimed “Master of Disaster” who has helped sell some of the most well-known stigmatized properties in the US, including the previous homes of Nicole Brown Simpson and John and Patsy Ramsey. Bell is CEO of real estate/economics consultancy Landmark Research and specializes in the economics of property damage.
“This means I’m studying the effect that adverse conditions have on real estate values,” Bell told Nexstar. “…We inspect the properties and then develop case studies of other similar situations to determine the most likely impact. We can also investigate what can be done to reduce any negative effects.”
In an interview with VICE, Bell explained that sellers of “contaminated” properties can expect a “15 to 25% depreciation” over two to three years. Over time, the discount evaporates, but it will take 10 to 25 years before the stigma is completely gone.”
Bell’s records are echoed by those found by Realtor, using publicly available data sourced from DiedInHouse.com, a website that uses proprietary information to tell users if someone has died at a specific address. Data shows that on average, house murder sites sell 21% less than their previous sale price and 9% less than list price. These homes also sell for 15% less than comparable homes in the same zip code.
Washington Post explains that buyers have more access to real estate information than ever, which can make it more difficult to sell a stigmatized home or at a break-even price. Knowing a home’s backstory can leave buyers in a predestined “bad vibe” before they even see it.
NAR says the stigma of a home can even negatively impact neighboring homes.
Even houses of “famous” murder sites are not immune.
The Los Angeles apartment where owner Nicole Brown Simpson and friend Ron Goldman were murdered sat on the market for two years before finally selling for a loss of $525,000. Brown Simpson previously bought the house for $625,000, the real estate agent explains. The home at the center of the OJ Simpson murder trial would later sell for $1.72 million after remodeling and a change of address.
Sometimes even a renovation can’t save a house from its past. Serial killer John Wayne Gacy’s home was foreclosed on, completely demolished, and re-addressed. The new house, atop where Gacy killed at least 33 young men and boys, was eventually sold after the owner cut costs three times — $30,000 less than list price.
Still some high-profile murder locations to do become commodities, such as the Massachusetts home of accused ax murderer Lizzie Borden.
Meanwhile, the Los Angeles location of the 1969 Manson Family murders, in which actress Sharon Tate and five others were murdered, was sold in 1989 for $1.6 million ($3.7 million adjusted for inflation) by owner Rudy Altobelli — 18 times what the Hollywood talent manager paid for it in the early 1960s. Formerly located at 10050 Cielo Drive, the house played host to an array of musicians, including Trent Reznor of Nine Inch Nails, before being demolished and re-addressed in 1994.
In January, the house built in place of the 10050 site was put up for sale by owner Jeff Franklin, creator of “Full House,” with a list price of $85 million.
But these Hollywood owner stories are the exception, as Realtor reports. Citing public records, it reports that 59% of stigmatized home buyers are ordinary people, while 20% are bought by corporate entities for investment.
The family who bought the former home of convicted murderer Jodi Arias in Arizona told AZ Central in 2013 that the $206,000 they paid for the house, where Arias stabbed ex-boyfriend Travis Alexander 30 times, was “a good deal” and that they didn’t consider it a crime scene.
For many regular home buyers, a “good deal” on a stigmatized property is exactly the calculus behind buying the home.
Should Realtors Tell You About a Home Murder?
Depending on where you live, it may be perfectly legal for a real estate agent to omit a home’s creepy history.
Experian explains that real estate agents are required by law to disclose “material facts” about a property, but deaths do not fall under that definition in many states.
Buyers who buy directly from the homeowner must receive a so-called seller’s notice from the owner. As with real estate agents, the disclosure document contains information about the physical home and land, Nerd Wallet reports. Common items on a seller’s disclosure include any liens on the property, flooding/water damage, and mechanical issues. Unfortunately for buyers, deaths on a property also fall outside the necessary information about a property.
Bell says sellers — especially in California, which has some of the strictest laws in the nation — should always tell the truth. He recommends salespeople work with qualified agents, brokers and attorneys to mitigate potential critical omissions.
When buying and providing information about your future home, the best thing to do is find out what sellers need to tell you in your state. In many states, sellers are required to disclose a death in the home only if asked to do so.