Real Estate

How to Deal with Stigmatized Properties


It is the responsibility of real estate agents to describe the history of a house in order to assist their clients in making an informed choice. Every home has a distinct background that includes the people who lived there as well as the events that took place in the area. There are some properties with a reputation as having more drama in comparison to Selling Sunset.

The stigmatized property may be overlooked by buyers due to their reputation. However, not all stigmas are created equally, and based on your selling point of view A property that is stigmatized could be the best way to get your customer the best price. Find out more about how to work with properties that are stigmatized.

What is a stigmatized Property?

A property with a stigmatization is property that has been emotionally affected by an event that took place or was believed to have happened there. For example, a property with a history of crime or paranormal activity, can be considered a property with a stigma. Although these stigmas might not affect the physical state of the property but stigma can make selling the property at market value difficult dependent on the kind of stigmas that exist.

The Different Kinds Of Property Stigmas

When it comes to buying or selling real estate, there are many different kinds of stigmas you could encounter in the industry.

Here are a few examples of the most common property stigmas:

Haunted or Paranormal Activity Stigma

The majority of states are not required for realtors or sellers to report any paranormal activity that occurs in the home. However the following four states mention haunted or paranormal activities when it comes to disclosures. these states are New York, New Jersey, Massachusetts, and Minnesota. In those states, when buyers inquire about whether the house has been haunted by a ghostly phenomena, the realtor and the owner must be honest.

If a buyer is concerned regarding paranormal activity at your home, then it’s a great idea to determine what could cause the owner to believe that their house is haunted. Large fluctuations in temperatures from room-to-room could indicate that the house needs more insulation. The thumps and bumps that you hear in the night may be caused by a leak inside the wall that requires to be fixed or a pest which needs to be moved.

Criminal Activities Stigma

There are many reasons why an individual might not choose to purchase property that has been linked to criminal activities. The primary concern is damages or contamination caused by the criminal activities. If the listing has a history of shady transactions, be sure to investigate the details of what happened as well as what sellers did to rectify the issue to sell the property.

If you’re offered the chance to sell a home with an interesting rap sheet be extra careful to make sure that the house is safe, well lit and smells great. If the windows are broken or bullet holes or biological contamination , ensure these items are taken care of and the property is cleaned. By removing the visual cues, the people who visit the house won’t be reminded about the incidents that took to place during the previous.

If you’re a buyer’s representative and you’re sure that your buyer will be thrilled with the property, however you’re not sure due to the reputation of the property, speak to your clients. The majority of the homes are in good condition, and your buyer may not be concerned about the history when they’ve visited the property in person.

Death Stigma

The stigma of death is among the most frequently encountered forms of property stigma that real estate agents have to deal with. State-specific requirements regarding death disclosures differ from states to state for sellers and agents.

In Florida real estate agents and sellers aren’t required to reveal if there was an act of suicide or murder committed at the property. However there is a requirement in California real estate agents as well as buyers are required to be able to disclose if a crime or suicide took place at the residence within the last three years.

Conduct your own research and share what you discover with the client. Many home buyers aren’t interested in anything related to homes that are stigmatized. Some buyers might be able to ignore the past of their home and concentrate at the present they intend to build.

Debt Stigma

If a house’s previous owner was in a position to incur a substantial amount of debt, buyers might not wish to have a connection with that address due to regular visits from creditors and other unpleasant people. Make sure you check the property’s tax details and address any issues that you have with your customer. If the homeowner moved out of the property before paying their property tax the new owner could be liable for unpaid taxes and liens that are attached to the property.

Sex Offender Stigma

A sex offender who lives in the same neighborhood can cause a negative image for the house and the area it’s situated within. If your client’s primary concern is security, you might want to look for a house’s address in the National Sex Offender Registry and mentioning any red flags that you discover.

Famous Homes Of TV And Film Stigma

For some living in a famous house can be a huge disorientation. The number of people taking selfies in the yard and the increased traffic from tourists might cause people to shun from a home that is famous. For others who live in homes that has a storied past might be the fun that will lead them to write an offer prior to leaving the driveway.

For instance, the real loft in the TV series “New Girl” isn’t real however the location that was used for filming exteriors is. It’s the Binford Lofts were featured throughout the show and viewers continue to take an image in front of the famous structure, but the amount of traffic hasn’t deterred potential buyers. Actually, the show brought more attention to the property and had a positive effect on the area.

Does the Seller Have To Be able to Disclose Stigmas?

The requirements for disclosures that apply to real estate agents as well as sellers differ by states. If you’re dealing with an offer that you believe is considered to be a property that has been stigmatized consult your broker or your state licensing authority for clarification of the requirements of your state’s stigma disclosure.

Certain stigmas aren’t required be reported in writing or on the MLS Some states require real estate sellers and agents to speak truthfully when inquired regarding the presence of stigmas. For instance, many states don’t require listing agents or seller to reveal if there was a death at the location. However, California obliges sellers and agents to reveal whether a death been recorded on the property in the last three years.

A number of states have implemented an “buyer beware” policy when purchasing homes. This places the burden upon the buyer as well as the agent to conduct the necessary study to make sure the home is in compliance with the buyer’s requirements and their satisfaction.

Tips for Agents working with Properties that are stigmatized

If you’re facing the challenge of a property that is stigmatized, don’t let the stigma of it deter you. Be open to the possibility and conduct your own research and you might discover that the stigma shouldn’t be allowed to stand in the way of your business being successful.

Below are some helpful tips to help you make the most of your experience when dealing with stigmatized real estate.

  • Know the disclosure obligations for the state(s) that you’re licensed in. Each state has resources for real estate agents licensed by the state and brokers to learn regarding disclosure rules and guidelines to ensure they’re executing real estate in accordance with the state’s guidelines. Utilize these resources if you’re having doubts.
  • Find out if the information is true and not fiction. When the perception is founded on rumors or the community’s perception and there is no need to divulge. These kinds of things as here say and rumors are usually eliminated with the help of facts.
  • Assess the importance that the stigma has. Find out if being aware of the stigma will alter a reasonable individual’s view regarding the value of the house? If it does then you’ll have to talk to your client about it.
  • Discussion with the client about this stigma. If your seller client agrees to share the stigma, then you must do it in accordance with your state’s guidelines. If the seller is unwilling to reveal something that both you and the broker consider to be a fact, it’s best to be cautious. Make sure your client is aware that you could be in violation of your fundamental obligation to divulge information that is important and puts your license in danger. It is important that they know that not disclosing material information in the disclosures of their seller could put the whole transaction at risk of failing.