Picture this: You’re in the process of searching for a new home to purchase, but anything that meets even some of your criteria is listed for far more than your budget allows. Then, one day you spot it: A house within your price range that ticks all (or at least some) of your boxes. Sure, it looks a little rough around the edges — as if it has been a while since anyone has lived there — but nothing a little elbow grease couldn’t fix.
Just before making an appointment with a realtor to see the property, you do a quick online search for the address, and immediately find out why it’s so cheap: Something bad happened there. Whatever it was, it makes people not want to live there.
In an article for Hunker, Mariette Williams breaks down both the advantages and disadvantages of purchasing a home with a dark past. Here’s what to know.
What is a stigmatised property?
FYI, there’s an official term for houses with checkered pasts. They’re called “stigmatised properties,” and the National Association of Realtors defines them as “a property that has been psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any kind.”
So what kind of event, exactly? According to the NAR, a property can be stigmatised for a number of reasons, including its location, the fact that someone was murdered or died by suicide in the house, alleged hauntings, and/or a notorious previous owner.
Advantages of buying a stigmatised property
The biggest advantage of purchasing a stigmatised property is almost always the low price — something that could pay off in both the short-term and long-run, according to Kris Lippi, a certified real estate broker and owner of the real estate website ISoldMyHouse.com. She explained why that’s the case in a recent interview with Hunker:
“If you’ll be able to live in the property long enough before you need to sell it, then you might be able to sell the property at a higher price than what you bought it for. The stigma might just be forgotten by then or people might not be bothered by the stigma anymore due to the passing of time.”
Disadvantages of buying a stigmatised property
Even if living somewhere allegedly haunted, or a former crime scene doesn’t bother you, in many cases, a lapse in occupancy can leave the house in need of some improvements, if not a full renovation.
Plus, as Julia Kusayeva, a New York-based property appraiser, recently told Hunker, owners of stigmatised properties may find themselves dealing with unwanted visitors — and no, she’s not talking about ghosts. If the house is known for being the location of criminal and/or supernatural activity, it’s possible that it’ll become a destination for true crime fans or paranormal investigators.