Would a buyer know if they were buying a “haunted house"? What the experts say.

Key takeaways

  • A house with a sad or scary past can be more challenging to sell or may require a discounted price.
  • Homebuyers may already know about a notorious house, but if they don't, agents or sellers may be required to tell them.
  • Laws about what agents and sellers need to disclose about their home’s past vary by state.
  • A Cinch warranty can help homeowners and sellers avoid scary breakdowns.

Have you ever walked into a house and felt chills up your spine? Nearly every real estate agent can tell a creepy story about a home they visited where they had a feeling that something bad had happened. But what if you know something traumatic happened in a property, such as a murder or a tragic death – or the homeowners claim there’s a ghost in the residence?

Depending on where you work, you may have to say more than "boo!" The laws about disclosing ghosts and other scary things vary by state. According to research by Zillow, only four states – New York, Massachusetts, Minnesota and New Jersey – have specific references to paranormal activity.

Three states require disclosing a death in the house or a murder, while six others require disclosing a death only if the sellers are asked.

But that doesn't mean you and your sellers are off the hook everywhere else. For example, many states have rules that require disclosure of anything that could negatively impact a home’s value. And a notorious scandal, an infamous owner, or a tragedy in the house could do just that.

Selling a “stigmatized” house

The National Association of REALTORS® defines stigmatized real estate as "a property that has been psychologically impacted by an event which occurred, or was suspected of having occurred, on the property, such event being one that has no physical impact of any kind."

Not only do sellers sometimes need to disclose what they know about a property's history, but agents do too, depending on state laws. But in more than 20 states, agents and sellers aren’t required to say anything at all.

Even if you don't have to disclose anything, selling a stigmatized house can be challenging. Buyers who know about a home's notoriety may be willing to overlook it if they can get a significant discount. Others may be too traumatized by the idea of living in a house with a past and will walk away.

Your strategy depends on your market. Sometimes, it pays to highlight a haunted house to generate interest among buyers. Other times, it's wise to joke about the rumors to debunk them. It all depends on the facts of the home's past and market conditions.

Handling a scary breakdown

While some people “ain’t afraid of no ghosts," nearly every buyer and seller fears a complicated and expensive appliance or system breaking at the wrong moment. While you can't change the history of a house, you can recommend a Cinch home warranty that will give your buyers and sellers the peace of mind of knowing that reliable contractors are available and the bill won’t make them scream. Learn how a seller warranty can transfer to the buyer to help them avoid a scare at cinchrealestate.com.

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