What is a Stigmatized Property?
A stigmatized property is one that has had an event occur that is considered a stigma or a potential stigma to buyers.
Examples of a Stigmatized Property
A list of potential stigmatized properties:
- Belief that house is haunted
- Death of an occupant (murder, suicide, natural causes)
- Divorced house
- Seller has a contagious disease
- Crimes or gang activity have occured in the home
- Previously owned by a criminal
- Robbed or vandalized due to criminal activities
- Former grow op or meth lab
These are very subjective to each individual. Every buyer has certain stigmas they wish to avoid. It is up to buyers to make these inquiries about a property
What To Know About a Stigmatized Property as a Seller
Sellers do not need to disclose details of potential stigmas on the PDS (Property Disclosure Statement). The court typically sides with the seller in that they do not need to disclose those stigmas as long as the buyer does not make specific inquiries.
Sellers must tell the truth if the buyer asks specific questions related to the property. Be ready to answer any questions about these facts if a buyer asks.
Sellers should also prepare to negotiate with buyers who are concerned by potential stigmas attached to the property. Stigmatized characteristics become negotiation points in a deal when the buyer is aware of them.
How to Uncover a Stigmatized Property as a Buyer
If buyers are concerned about stigmatized properties, they should make relevant inquiries to find out about these details. The main options to find out are to go to city hall, do a google search, follow the news or ask the seller very specific questions.
Option 1 – Inquire at City Hall
Ask your realtor to contact City Hall and ask for any records of the property. If cases exist that involve City Hall such as a home being a grow op, your realtor can obtain them.
Option 2 – Google Search
These days, it is easy to find information on the internet. Do a quick Google search on the specific property and see what comes up. If there are any major red flags, a quick search does the trick in uncovering articles or information related to the property.
Option 3 – Follow the News
The news informs readers on a daily basis of what is going on locally and internationally. The local news informs readers of important news in the area, such as a recent murder in a home.
Option 4 – Ask the Seller Specific Questions
Again, if sellers are asked questions regarding their listed property, they cannot lie to buyers. But they do not have to be forthcoming with that information when listing their property. Thus, it is the responsibility of the buyer to uncover these hidden details.
Ready to Sell? Ready to Buy?
There are many cases of stigmatized properties. These examples give a general sense of understanding the concept of stigmatized properties. As a seller, be ready to discuss details of the listed property. As a buyer, be ready to ask questions that matter to you in the buying process.
Please advise your realtor if you do not wish to purchase a stigmatized property. It is not obvious what properties are stigmatized properties. Your realtor can help alleviate any issues but only if you inform them of your requirements.
Disclaimer: The foregoing is for information purposes only. It is not intended as legal advice to the ready. Please consult a professional lawyer if needed.