Real Estate Fear Factor: Dealing With Stigmatized Property

by Rich Vetstein on June 8, 2010 · 2 comments

in Appraisals, Disclosures, Massachusetts Property Values, Massachusetts Real Estate Law, Realtors

haunted_house-1.jpgThe well maintained 4 bedroom Colonial in a North Shore suburb with a great backyard looked nice enough thought “Debbie,” the buyer. However, she was dismayed to learn from neighbors after closing on the property, that the prior owner had committed suicide in the house. The real estate agent never advised her of this, and she says she would have never purchased the home if she had known this.

In Massachusetts, real estate brokers struggle to sell homes tainted by shocking murders, suicides, or even suspected “haunted houses.”  For real estate brokers, sellers and buyers, these “stigmatized” properties are particularly difficult to deal with as they raise unique valuation problems and disclosure issues.

“Haunted Houses”

Under Massachusetts law, however, real estate brokers and sellers are under no legal obligation to disclose that a property was the site of a felony, suicide or homicide, or has been the site of an alleged “parapsychological or supernatural phenomenon,” i.e., a haunted house. Thus, buyers are on their own to discover these types of stigmas—however, a quick Google search on the property address or prior owner may have revealed the prior suicide in “Debbie’s” case.

Power Lines, Cell Towers & Underground Gas Pipelines

Less notorious, but equally challenging, are stigmas such as high tension power lines, cell towers, high pressure underground gas pipelines, landfills, nearby sex offenders, former Army bases, and other environmental concerns. These are much more challenging to handle, and are becoming increasingly prevalent.

While there is an ongoing debate whether electric and magnetic radiation emitting from powers lines and cell towers are harmful to humans, there are studies suggesting that buyers perceive them as health hazards and will drop asking prices accordingly. Neighborhood opposition to cell towers and new gas lines are becoming increasingly widespread, vocal and well-organized. Also, virtually all power lines and gas pipelines running over property will carry with them recorded easements which typically restrict building near the lines. Depending on the proximity of the lines, these easements may impact potential home additions and backyard activities such as pool installations, etc.

Buyers need to be cognizant of the impact of all potential stigmas, whether well-publicized or not. For most off-site conditions, Realtors and sellers are under no legal obligation to disclose them to buyers. Buyers, you need to do your due diligence. Check the town assessors maps (often available online), registry of deeds information, the Mass. sex offender registry, use the internet and Google Maps to verify any potential impacts on the property, and drive around the neighborhood. You’d be surprised what you’ll find.

Helpful links:  National Ass’n of Realtors Field Guide To Stigmatized Properties

  • Bill,

    BOO!

  • Rich I am still waiting to meet my 1st ghost. Maybe I am not looking in the right places:)

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