Big bargains lurk in ghostly properties

If you think Lizzie Borden with her ax is scary, imagine you are the real estate agent trying to sell her house. Haunted houses can be a tough sell, but some buyers can make a killing on a home with a creepy past.

According to a 2019 poll by YouGov, 45 percent of people they interviewed believe in ghosts and the same number believe in demons. While you do have to disclose a leaky roof, you may not have to disclose a ghost when selling. The law firm Kious, Rodgers, Barger, Holder & King, PLLC writes that in Minnesota and Massachusetts, it is unnecessary to disclose if the house is haunted by paranormal activity or the supernatural; in New Jersey, a seller must disclose it only if asked; and in New York, a seller is not obligated to share the information with a buyer unless they have already shared the opinion with the public at large.

Nonetheless, if confronted with a nice home with an icky history, would you buy it?

What if a great townhome was on the California market in a fantastic neighborhood at a stunningly low price with a highly motivated seller? But there is a reason the price is so low–this is the townhome of Nicole Brown Simpson, whose gruesome murder was tried in the infamous O.J. Simpson trial. Would you buy it? Someone did and the house sold for $200,000 off the asking price.
It’s not just violence and spirits that can stigmatize a home. In some states, it must be disclosed if a house for sale once had a methamphetamine lab, mainly because former customers could drop by or chemicals could remain. Even homeowners in a lot of debt can cause some stigma when they sell because the new owners could be targeted by debt collectors.

Some stigma can be enduring. Homeowners around one stigmatized property actually changed the name of the street. In 1997, 39 members of the Heaven’s Gate cult killed themselves awaiting an alien spacecraft. You won’t find their notorious address anymore and you won’t find the $1.6 million home either. The landlord tried to sell, but could not. The lender finally sold it for less than $700,000 and it was bulldozed.

According to real estate consultant Bell Anderson & Saunders, a buyer of a stigmatized home can expect from 10 to 25 percent off-market prices.

Some buyers make a name on homes with a creepy past. The legend of Lizzie Borden lives on in her home at 92 Second St., Fall River, Mass., now a bed and breakfast. And you’ll feel very cozy when you read the motto: Where everyone is treated like family. Oh, wait…