Stigmatized Properties: Do Buyers Have the Right to Know?

Chris Butler, a musician and founding member of 80s new wave band The Waitresses, used to describe his former Ohio home as an “unbelievably cool pad.” He thought the house was a great bargain—at $245,000—ghosts and murders aside.

It makes Butler one of the few homeowners in America who took pride in owning a stigmatized property. Butler’s now former home was where serial killer and cannibal Jeffrey Dahmer spent his childhood and committed his first murder.

He didn’t mind once he got past “the horror factor,” he once told media outlets.

Butler had since put up the house for sale again seven years after he bought it in 2005, but for what it’s worth, the house served his purposes well.

The home “had plenty of space to accommodate band mates, distance from neighbors so he could make music without getting angry phone calls, ground-level living quarters, in case his aging mom needed to move in,” Butler told MSN Real Estate back in 2005.

The home was also the site of countless Halloween parties hosted by Butler, according to the same report.

Not all homeowners, however, showed enthusiasm for owning a stigmatized property. Janet Milliken, a 61-year-old mother who moved from California to a Pennsylvania home with her two teenage children, was completely distressed upon learning that their new home was the site of a murder/suicide.

Milliken sued the home seller and real estate agent that brokered the sale for “fraud and misrepresentation,” according to a Yahoo! News report.

Just last week, however, the Pennsylvania Supreme Court set aside her appeal, and ruled that home sellers do not have to disclose incidents or “stigmas” that took place at the property to potential buyers.

Unlike Butler, however, whose agent thought it was an “ethical obligation” to disclose the property’s bloody past, Milliken was not informed prior to closing the deal that her future home was where former owner, Konstantinos Koumboulis, killed his wife and put a bullet in his head.

Most states only require home sellers to disclose the property’s material defects. Massachusetts, for instance, maintains that “the possibility of a property being psychologically impacted is not a material fact” that buyers have to learn about.

New York and California have stricter disclosure policies, and require agents to disclose all pertinent details about the house, material or not, especially if the buyer asks.

Texas also requires agents to disclose murders and suicides to home buyers, according to an Edel Financial article. Virginia, meanwhile, requires ghost sightings and violent deaths to be disclosed “only if they physically affect the property.”

In the end, it remains an ethical choice for agents to tell their clients about any past incidents that occurred inside the property, whether the client minds it or not. As for home buyers, asking outright whether the property is stigmatized is a must to know, especially if it matters to them.

Home buyers can also use Edel Financial-recommended web site diedinhouse.com to find out whether someone has died from unnatural causes in the previously-owned property they’re eyeing to buy.

RealBiz Media Group, Inc. RBIZ offers video marketing tools for agents selling stigmatized or non-stigmatized properties. Its platforms Nestbuilder Agent and Microvideo App are two promising video marketing platforms that agents can use to create virtual tours and video listings of properties to show potential home buyers.

The platforms are equipped with a virtual tour-creation app and content publishing tool that allow agents to post home and community events and share them on social media sites like Facebook, Twitter and Pinterest. They also feature a data analytics tool that allow agents to measure the progress of their marketing campaigns and help them identify leads they can pursue.

The platforms have so far met the demanding requirements of an agent’s marketing endeavor. According to an independent report on the International Business Times, 15,350 agents are said to be using the platform. Meanwhile, about 24,000 videos are being published daily across RealBiz Media’s video based marketing platforms.