How Do You Sell a Home Someone Died In?

by Karina Gafford

How would you like to take a shower in the home that inspired "Psycho" in Plainville, Wisconsin? Fortunately, that home has since been bulldozed, but many other homes in which traumatic events occurred appear on the market every so often.
 
Death in a home, whether by natural causes, suicide, or murder, can make a resale of the property or even a rental of the home challenging

In the US, an Associated Press poll reported that a full one-third of Americans believed in ghosts as of 2007, but even those who do not believe in the paranormal may not feel comfortable living in a home in which someone died. In some cultures, living in a home where someone died is not only taboo, but also prohibited. For the Irish Gypsies, an ethnically Irish itinerant group that makes up just a little less than 1-percent of the country’s population, if an owner dies inside his caravan home, then the caravan must be set on fire. This doesn’t make the most economical sense, but it’s a strict cultural practice. Some of the descendants of this group are reported to live in areas near US military installations in Georgia and South Carolina.
 
Death in a property doesn’t bother everyone nor does it require such extreme rituals as mandated by Gypsy culture, but it can leave a seller or landlord in a sticky ethical situation if they are not obligated by their state regulations to disclose the death. Though some states require the disclosure as a "material defect," not all do. In the event that your state does not, should you inform prospective buyers or tenants about a death in the home knowing that your voluntary disclosure may cause you to lose your sale or lease?
 
Fortunately, death in a home does not bother everyone.

Even if your prospective buyer or renter is willing to live in a cleaned up home of a grisly murder, she will expect that the home is well below market value. Real estate experts suggest that such homes should sell or rent for approximately 20-percent below market value. While a live celebrity can cause a property value to soar; a celebrity who died in the home brings the same stigma as a mass murder. The home in which singer Amy Winehouse died in sold for $1 million below the market value it would otherwise have achieved in a sale; whereas, Michael Jackson’s home sold for $18 million, a whopping $5 million less than the $23 million it was expected to otherwise fetch in a sale.
 
The market share of prospective buyers and renters who will live in a home will also drop if the death was a result of anything other than natural causes. Many more are comfortable with the thought of grandma peacefully passing away in her sleep than they are with the thought of traumatized ghosts occupying their basement years after their macabre ending at the hands of a cold-blooded murderer.
 
There are plenty of prospective buyers and renters who won’t mind that your home was the site of a mass murder as long as you’ve cleaned up the blood. 

HGTV reported that homes in which the occupant committed suicide or was murdered typically stay on the market for four months longer than other homes in the area while a study by Wright State University in 2000 explained that the homes stay on the market for a total of 45-percent longer than they otherwise would have, but that doesn’t mean they won’t get snapped up! There’s a woman in my condo building who just rented a unit that has sat empty for the last year. Though the property manager chose to not share the news, once prospective tenants googled the name of the property, the recent story of a man’s tragic suicide in the unit popped up at the top of the search listings, scaring off any prospective residents. Though the incident caused the neighbors on either side of the unit moved out shortly after, the news didn’t bother this brave woman. Personally, I’m just glad I live on the other side of the building as far away from that unit as possible.
 
While out for a walk with my friend Leanne, she mentioned that she was having an ethical dilemma over whether to inform a prospective tenant about a suicide that had occurred in her home several years prior. A stalwart by nature, she simply expressed appreciation that the female occupant, a generally neat and tidy woman by all accounts, had committed the act in the bathtub where there would be little cleanup required. Leanne had bought her property in Arizona while her family was stationed there, and she explained that the death doesn’t bother her; in fact, they intend to return to the property as their permanent residence once her husband has finished his career in the Air Force. In the meantime, they rent out their home to other military families and civilians who work at the nearby military installation. The previous two long-term tenants both knew about the suicide in the home through friends, but the new prospective tenant did not seem aware, and Leanne was concerned about mentioning it to her.
 
 Some states are bothered by the news of death, though, and they legally require sellers and landlords to share the news with buyers and renters.

However, the terms of the regulations and disclosure limitations vary by state, so if you’re a military family with homes in multiple states, then you need to check on the regulations for each. Hopefully you don’t have to deal with multiple death news situations in your homes, but the longer you own each home—an increasingly likely situation in our mostly post-home flipping economy—the more likely it is that you will have to determine whether or not you must inform people who buy or rent from you. Here’s a look at some of the regulations for death in home disclosures across the US:
 
  •   California: A death on the property within a period of three years, except in the case of a death by AIDs (considered a disability by the state, and thus discriminatory to disclose), must be disclosed as a material defect. A failure to disclose can result in a heavy lawsuit if the buyer finds out that someone died in the home within three years of their purchase.
  •   Alabama, West Virginia and Wyoming do not require any disclosure of death.
  •   Alaska and South Dakota require a disclosure of any event of death within 12 months of the incident.
  •   Connecticut, Delaware, New Hampshire, North Dakota and Oklahoma only require the disclosure of a death, including murder or suicide, if the buyer or renter asks directly.
If you’re a homeowner who is concerned about disclosing a death on your property, make sure to speak with an experienced real estate agent in your state to avoid a costly lawsuit later. If you are unsure if a death occurred on your property, your real estate agent can access public records to find out for you. Finally, if you’re concerned about the home you’re about to either buy or rent, then simply ask the real estate agent to add a written disclosure to your contract that states that no death occurred on the property to the best of the homeowner’s knowledge. Request that the homeowner sign the statement.