Murder/Suicide in House Impact Value?

[Restrain]

It depends on the market. I've seen 30-40% losses, then I've seen no losses. Publicity, notoriety, size of the market. Often times, it's only an extended marketing time in an active market.

 

[Jim Bearden]

From what I read the condo was listed for $795,000 shortly after the crime and remained on the market for 2 years with some written offers but none accepted. An auction was scheduled but the property sold before the auction date below the adjusted $595,000 asking price. Is this info inaccurate?

Here's a USA Today article on stigmatized homes.

http://www.usatoday.com/news/nation/2006-08-06-murder-houses_x.htm

That is not how I recall it. That being said the price sounds about right and that was about what she paid for it a couple years earlier. Just remember from 1990 t0 1995 home prices declined as much as 50% so if it were listed at that price it would have stayed on the market for 10 years.

BTW that place was a huge tourist destination for a couple years and traffic around it was terrible some days and no place to park.

 

[Otis Key]

Could be. I forgot how to reset the little dot thingy on my 12c.:new_all_coholic:

I think that's Function CLX.

Edit to add: Or is that CRTL-ALT-DEL? I forget sometimes.

 

[Derek Harkrider]

The impact will depend upon the local market's reaction to the situation. One way to research it is to search your local papers archives for similar properties, and then determine if any of them have sold since the deaths occurred and how the sales compared to typical sales in the local market.

One thing that has not been brought up here is checking your state requirements for clean up of the scene. In some states, it is not regulated. In others, only certain companies are licensed to clean up sites with potential biological issues (such as body fluids from a crime scene, etc...). Check on what is required in your area and make sure that any and all required cleanup has occurred. Otherwise, there is a potential liability if remains cause spores, mold, or other problems. In Texas, it is not required to have a a company that is licensed to perform bio-hazard cleanup work on the site. However, if they do perform the cleanup, then all future liability for a contamination problem becomes their responsibility. If someone else does the cleanup, then the seller retains the liability when the home changes hands. It is improtant that you document this in your report in the interest of full disclosure of potential environmental complications with the property as well as making sur ethe buyer knows the history of the home. Can you imagine this scenario? At some point after buying the home, the new owner retains a lawyer and claims that they found out about the history of the home from a neighbor. They would never have bought the house if they had known about the deaths, and they are seeking damages from everyone in the transaction who did not inform them about the deaths.

I had to deal with such a house. Besides putting the information in the report as well as information about cleanup regulations, I had the LO get a signed letter from the buyer stating that they were informed about the history of the property.

 

[Steven R. Smith]

I had my first experience with this issue in 1978. The property was in Simi Valley, CA. The impact was in the 30% range.

Over time, the impact decreases, so, it might be 30% now (so soon after the incident), 20% in 2008, 10% in 2009, etc.

Randy Bell created the Bell Chart that demonstrates the way negative things impact property value. www.realestatedamages.com. He also wrote a seminar and book on point.

One time incidents have about a 3-year impact, decreasing over time.

You do not have to have a murder to have a negative impact. A death in the home can impact the property too. This happened to us. My mother-in-law died on a Friday, and was not discovered until Monday. She lived in Atherton, CA.

We cleaned out the home, steam cleaned the carpets throughout, the drapes, and repainted it. It was bright and shinny clean. But REALTORS talk, and thier talk alone cost us almost 20% in value loss.

I have a case where the property flooded six times in 10 years. Our broker survey resulted in a wide range. Many said they would not take the listing at any price for fear of liabilities.

Hope this helps.

 

[Bearslide]

Saw two in this area - one was a murder, the other was a shoot-out with the cops and the homeowner was killed. Both made front page news. Both were sold within 6 months of the incident and both suffered about a 25% loss in value. Both were listed by a very savvy and experienced local realtor and did not stay on the market overly long, but they were cleaned up and presented properly, with disclosures made in full.

The one with the murder resold last year (6 years after the fact) and seemed to be at normal market prices. The other has not resold.

 

[Steven R. Smith]

Paired Sale: Detrimental Condition

Michele, keep the details of the homes in a Paired Sale file, for use when you need it. The percentage can be applied any time.

 

[Mike Garrett RAA]

I think the Appraisal Institute has a course called "Stigmatized Properties" which might have some answers to your question.

Remember the Jon Benet Ramsey case in Boulder? There was measurable loss in value there.

My parents bought a residence from a well known architect here in Colorado Springs a number of years ago. His wife committed suicide in the home. It sold for about 25% below the market but I think that was because he wanted to dump it rather than a stigma.

 

[jdbiggers]

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

 

[Dave Fitch]

I've appraised two homes over the years like this. One was a sale after a suicide, and the other was a sale after a murder. Both sales took longer than normal marketing time, and each sale was about 10% below market value. I'm sure the stigma declines over time.