Stigmatized properties will sometimes be overlooked by home buyers in their search because of their reputation. But not all stigma is created equal. Depending on your selling perspective, a stigmatized property might be the key to getting your client a great deal.
What Is a Stigmatized Property?
A stigmatized property is real estate that has been impacted by an event that occurred or was suspected to have occurred there. While these stigmas may not affect the physical condition of the home, stigma can make selling a home at market value a challenge.
Types of Property Stigmas
Here are some examples of common property stigmas:
Haunted or Paranormal Activity Stigma
If a seller expresses concerns with paranormal activity in their home, it’s a good idea to explore what could be causing the homeowner to believe their home is haunted. The bumps and thumps heard in the night could be a loose pipe in the wall that needs to be repaired or a pest that could be relocated.
Criminal Activity Stigma
A client may not want to purchase a home known for criminal activity. If a listing has a checkered past, take the time to research what really happened and what the sellers have done to remedy those issues to sell the home.
Death Stigma
Death disclosure requirements vary state to state. For example, in Florida, real estate agents and sellers do not have to disclose if there was a murder or suicide on the property. However, in California you must disclose if a murder or suicide happened in the home in the last three years.
Tips for Agents Working With Stigmatized Property
- Understand the disclosure requirements in the state(s) you’re licensed in. Each state will have resources and legal guidance in place to ensure you’re practicing real estate according to state guidelines.
- Determine whether the information is fact or fiction. If the stigma is based on rumors or community perception, then there is no obligation to disclose.
- Ask yourself if knowing about the stigma would affect a reasonable person’s opinion of the value of the home. If so, then you’ll need to address it with your client.
The Bottom Line
When working with stigmatized real estate, it’s important to know how to evaluate facts and when to disclose information during a real estate transaction. Once you’ve done the research, you can feel good knowing you’ve provided accurate facts for your client to make the right decision when faced with stigmatized property.
To get connected, visit RocketPro.com/RealEstate.
