Murder/Suicide in House Impact Value?

[Mike Boyd]

Been in many such houses. Appraised many such houses. And I've seen the sales of many such houses. What I haven't seen is an impact on value or sale price EXCEPT, on rare occassions, a POSITIVE impact.

If I remember, even in the Simpson case, didn't a developer pay what would be considered FULL market value for Nicloe's house only to raze it for new construction? Seems to me, in such a case, the builder paid a premium for the supposedly "stigmatized" site. And that was a house with INTERNATIONAL "stigmatization," where every real estate expert was pontificating how the values in the area were totally devastated because of this.

JD

The GHOUL affect

 

[Otis Key]

There is no one "correct" answer to any of this. The following is what I quickly located throught the big "R" website and it might be helpful to the original question.

Some prospective buyers would plainly be discomforted by such news with the result that either they would not bid on the property or they would reduce their offers.
While the feelings of many buyers are entirely understandable, it's also easy to see that sellers may be unfairly hurt in this process.
Suppose a home is the site of a suicide or murder. If the individual who died was a friend or relative of the owners, they no doubt feel enormous loss and perhaps wish to move. But under some state rules, when they offer their home for sale the owners must tell buyers of recent events at the home, thereby lowering its value.
The catch is that a number of states have so-called "stigmatized housing" rules which say that owners and their brokers need not disclose the events at the home related to suicides, accidental deaths, natural deaths, ghosts, or felonies. These rules are inconsistent, however, so that the disclosure requirements in one state may be vastly different than another. And many states have no rules dealing with stigmatized homes, a legal gap which offers no guidance to buyers, sellers, or brokers. The result is that what must be said depends on where you live. A murder, for example, may have to be disclosed in one state, not disclosed in another, or disclosed today but not after several years.

http://realtytimes.com/rtcpages/20010522_stigma.htm

I might also suggest reviewing the definition of Stigma, stimatized properties, etc.

It depends upon your location, market, price range, "informed" buyers, etc.

 

[Non Sequitur]

If I remember, even in the Simpson case, didn't a developer pay what would be considered FULL market value for Nicloe's house only to raze it for new construction?

No, Nicole's condo was not torn down before or after and stayed on the market for years (as stated in the thread) and OJ's house was foreclosed on, renovated, sold and torn down not because of stigma but it was outdated.

Mr. Sands should know. Last year he sold O. J. Simpson's old house in Brentwood for nearly $4 million, after the bank that foreclosed on it had spent $200,000 on elaborate renovations to make it more attractive. This week the new owner, an investment banker named Kenneth Abdalla, sent in bulldozers to reduce it to rubble.
''The reality is it was somewhat dated, and it was still subpar for a $4 million house,'' Mr. Sands said. ''The second-story master suite wasn't what it should be for today's environment. The buyer brought in the architect and talked about gutting the second floor but then decided he might as well take the whole thing down.''

http://query.nytimes.com/gst/fullpa...eference/Times Topics/People/S/Simpson, O. J.

 

[Steve Owen]

This might help

Here's some previous discussion of similar issues. First, the "granny factor:"

http://appraisersforum.com/urgent-help-needed/100635-burial-site.html

One I started, but didn't really finish:

http://appraisersforum.com/urgent-help-needed/96830-external-obs-sex-offender.html

One that I thought was actually a bit silly:

http://appraisersforum.com/urgent-help-needed/95361-considered-suicide.html

Just be glad you didn't get this assignment:

http://appraisersforum.com/urgent-help-needed/93172-appraising-funeral-home-residence.html

And, this from an appraiser wondering if you really have to report it or not:

http://appraisersforum.com/general-appraisal-discussion/91320-required-report-killing-home.html

Some of this stuff is a little crazy, but there is not doubt that people's perceptions can have an effect on value:

http://appraisersforum.com/general-appraisal-discussion/91374-ghost-chance.html

This most unusual stigma is not really similar to yours, but I thought it was pretty funny:

http://appraisersforum.com/urgent-help-needed/83621-interesting-stigma-how-would-you.html

And, what if it wasn't murder and didn't even happen in the house?

http://appraisersforum.com/general-appraisal-discussion/68251-4-killed-front-yard.html

At least your suicide wasn't a druggie. (Was he?):

http://appraisersforum.com/general-appraisal-discussion/72308-disclosing-drug-labs.html

Or, a pedophile. (Was he?):

http://appraisersforum.com/general-appraisal-discussion/78059-what-we-responsible-know.html

Was your suicide in rehab? It might make a difference if other like-minded individuals are nearby:

http://appraisersforum.com/urgent-help-needed/78468-politically-correct-wording.html

It's always kind of fun to go angling in the archives.

 

[Non Sequitur]

Steve you missed one:

http://appraisersforum.com/general-appraisal-discussion/91374-ghost-chance.html

Rats! On edit I noticed you didn't.

 

[Steve Owen]

I probably missed a bunch.

 

[Smokey Bear]

No, Nicole's condo was not torn down before or after

How would you tear down a single condo/townhouse anyway? I'd love to see that.

 

[Steven Straka]

Seymon:

Is this for a purchase or refi? If it's for a refi and the house was purchased recently, then I think the answer is before you (i.e. was the acquisition price below market for no other reasons than what you highlight).

If this is a purchase, find out how many offers have been made and try to find out if those offers are above or below list and then see where the subject falls relative to the area.

Brokers/Agents in some States are required to diclsose deaths only when such questions are posed directly by prospective buyers. This came about, in part, due to AIDS, and the desire for buyers to have full knowledge of factors that may have a "perceived" impact on the property. The disclosure also is time sensitive, so that your State will require disclosure if the death/suicide happened within x years.

In this instance, you're not acting as the listing agent/broker, so you have no obligation to make any adjustment unless such adjustment is warranted/supported. Now, I'd still disclose the information in the report and perhaps let the Underwriter make the decision as to whether their funding criteria is impacted or not.

 

[T.E. Faravelli]

What I haven't seen is an impact on value or sale price EXCEPT, on rare occassions, a POSITIVE impact. JD

It has on such occassions manifested itself so. This is best exemplified by my experience with the sale of the home of Scott and Laci Peterson.

 

[Non Sequitur]

It has on such occassions manifested itself so. This is best exemplified by my experience with the sale of the home of Scott and Laci Peterson.

I think this is evidence of no impact not a positive one. As I read it the area is in high demand with little turn over and the gain was attributed to market norms.