Can You Sell a Haunted House?
Since we are just a few days away from the spookiest night of the year, we're going to talk about haunted houses.
Do you live in one? Would you buy one? If you're selling one, do you have to tell prospective buyers?
When you're walking through the French Quarter in New Orleans, you might see a real estate For Sale sign with an extra little sign that says "HAUNTED" or "NOT HAUNTED". The real estate agent doesn’t have to put that extra sign on there, but they do. We imagine that the reason is that it’s partially for marketing and partially for disclosure.
A haunted house is considered a "stigmatized" property.
A property is considered “stigmatized” by the National Association of Realtors (NAR) if it is “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.”
States recognize several forms of stigmatized property, and have passed resolutions or statutes to deal with them. One issue that separates them is disclosure. Depending on the jurisdiction of the house, the seller may not be required to disclose the full facts. Some specific types must always be disclosed, others are up to the jurisdiction, and still others up to the realtor.
The types of stigma include:
Criminal stigma: the property was used in the ongoing commission of a crime. For example, a house is stigmatized if it has been used as a brothel, chop shop, or drug den.
Debt stigma: Debt collectors unaware that a debtor has moved out of a particular residence may continue their pursuit at the same location, resulting in harassment of innocent subsequent occupiers.
Murder/suicide stigma: Some jurisdictions in the United States require property sellers to reveal if murder or suicide occurred on the premises.
Public stigma: when the stigma is known to a wide selection of the population and any reasonable person can be expected to know of it. Examples include the Amityville Horror house and the home of the Menendez brothers.
Phenomena stigma: Many (but not all) jurisdictions require disclosure if a house is renowned for "haunting", ghost sightings, etc. This is in a separate category from public stigma, wherein the knowledge of "haunting" is restricted to a local market.
Zillow did a state-by-state analysis and found only four deal with paranormal activity in their real estate disclosure laws: New York, New Jersey, Massachusetts and Minnesota. (Read it here.)
In California, the law states death on a property need not be disclosed if it occurred more than three years prior to the sale, but is required to disclose if the buyer asks. To avoid liability, it is recommended the seller disclose a death if it occurred within the last three years and let the buyer decide.
The most haunted state is Texas with 6,845 reported paranormal activities between 2005 and 2020. California and Ohio are close behind in the number of sightings. Despite the overwhelming number of signs saying whether a property for sale is haunted or not, Louisiana doesn't even hit the top 10 most haunted states in the union. There are many famous cases of buying and selling houses that are haunted, some where the buyer was specifically looking for a ghost and some where the buyer didn’t know. Some agents specialize in the sale of stigmatized homes...including murder, suicides, hauntings, etc., but for most Realtors, the subject doesn’t come up often. When it does, it is a genuine surprise.
So the answer is Yes! You can sell a haunted house, but if your house is haunted and on the market do you have to tell? In the end, if it affects the material value of the home, it must be disclosed.