This week we’re talking about how stigma affects homes. Stigma is something like a death (natural, murder, suicide), violent event, haunting or ghosts, etc., that happen at the home or close by. The impact on property value varies depending on the perception of the stigma by the buyer.
For instance, some people don’t care if there was a natural death at the home or even a murder. Others may feel that a suicide in the home decreases the value. Haunted homes and ghosts are other tricky areas as it’s difficult to prove. Some people may have strong feelings about moving into a home with a history of unusual events, while others don’t believe in ghosts and haunted houses.
Now here’s where things get really interesting. In Ontario you are not legally required as a seller to disclose stigma to buyers or their agents. This doesn’t mean you or your listing agent can lie if asked directly, however. It does mean that you aren’t under any obligation to note it on your MLS listing and/or let any interested parties know about it.
In terms of your listing strategy, just because you aren’t required to disclose stigma doesn’t mean you shouldn’t. Being up front and honest can avoid trouble down the line, and possible litigation. Say the buyers discover there was a suicide on property after they’ve signed the deal, but before they close. Even if you’d ultimately win in court, you don’t want to end up there. It’s expensive and incredibly stressful.
There are certain buyers that you will deter with various stigma. However, with a properly prepared property and the right marketing you will find your buyers. Again, since this isn’t a material part of the house (like a leaky basement or knob and tube wiring) it’s more about perception. Opinion will always vary especially if you have a large buyer pool in a competitive market.
If you’re a buyer you have to approach the situation with a buyer beware perspective. You’ll need to have a conversation with your agent about what stigma you aren’t comfortable with ahead of making any offers. Make sure that your agent confirms in writing that the home hasn’t been impacted by this stigma. You can also include a clause confirming this fact in your agreement of purchase and sale. This way you would have legal recourse should you later discover that the seller’s weren’t honest.
So if you’re a buyer, do your due diligence; and if you’re a seller, seriously consider being transparent. For more on disclosure when selling your home, check out this blog.
***Remember because this is a legal matter it’s best to consult your real estate lawyer.
Photo by Stefan Ringler on Unsplash
