Get a Bargain on a Stigmatized Property

You can find a bargain in just about every neighborhood these days, but if you’re looking for a deal with a price that’s been “slashed,” try searching for the home where the “slasher” lived.
By: John Morell

Stigmatized properties are those that were the scene of a gruesome crime or event, the home of a notorious criminal, or both. In highly publicized cases, like that of O.J. Simpson, the house is often purchased, razed, and a new home is built to try and shed the past. In others, such as the Modesto, California home of Lacy and Scott Peterson, market conditions have prevented a teardown.

A 2000 study from Wright State University found that on average, stigmas caused a sale price to drop just three percent. But stigmatized homes were also on the market 45 percent longer than comparable houses. “Over time, memories fade and the stigma usually fades away,” says Randall Bell of Bell, Anderson & Sanders LLC, a Laguna Beach, Calif. real estate consultancy. “But can you afford to wait it out is the question.”

“Buying a house is a business transaction, but it’s also emotional,” says Frank Harrison, a property appraiser based in Woodstock, IL. “You may find a home you like but then you’re told someone died there. If an old man dies in his sleep, you might not think that’s so awful. But if it was a child, or a suicide, that might cause you to reconsider.”

In gentrified urban areas, stigmas can take on other forms. “In cities going through redevelopment you might have a block of beautifully re-done homes and a local gang decides to tag the area as its territory,” says Harrison. “Until law enforcement gets involved and the graffiti stops for good, values in the entire neighborhood suffer.”

Another issue occurs when a home with a recent past as the area’s “crack joint” or meth factory is remodeled and put on the market. “It’s usually the last one on the street to sell,” says Harrison. “It may be beautiful now, but people worry about the drugs and chemicals used there and they also wonder, what if an old customer shows up at their door one night looking for merchandise?”

Shopping for stigmatized properties

Most states have laws requiring Realtors and/or owners to disclose stigmas to potential buyers, but the rules can be vague. “There are quite a few intricacies and exclusions,” says Bell. “If something is at all an issue for you, ask them directly.”

Interested in buying a stigmatized home? You’re not alone. “They’re bargains if you can accept their past,” says Harrison. One of his more memorable appraisals was for a couple who purchased a Chicago home that was the site of a brutal murder. It was bought by a soldier and his Japanese wife who were happy to get a nicer home than they thought they could buy and who didn’t mind the home’s lurid history. “The wife brought her father to live with them from Japan and they felt very comfortable putting him in the room where the crime occurred.”

Keep Reading

Next Up

Get Estimates Before Hiring Movers

To cut down on moving costs, get estimates from at least three different moving companies before taking the plunge.

Get an Agent or Sell Yourself?

Many people try to sell their own house. Here's what you need to know if you go that route.

Get My Agent on the Phone

Especially for first-time homebuyers, using a seasoned agent is a smart move.

Get Web Savvy to Sell Your Home

Almost 80 percent of home searches start on the internet, so why not finish them there too? In lieu of the traditional method of selling through a real estate agent, some home sellers are turning to the Web to sell their homes.

Get an Inspection Before Selling Your Home

A home inspector's green light could give you the edge in a competitive market

Get Pre-Approval on Your Mortgage Application

Pre-approved loans are the way to go in today's real estate market.

Are You Financially Ready to Buy an Investment Property?

Here's what you need to consider in this real estate market before shelling out for an investment property.

Buyers: Don’t Freak Out When You Get Bad Inspection Results

What’s a homebuyer to do if your home inspection has bad results? Drama-Free Real Estate expert Tara-Nicholle Nelson shares her tips and tools.

Get Tax Relief After a Natural Disaster, Theft

When damage occurs, here's what homeowners need to know to start over.


Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.