real estate

Avoid these chilling homebuying surprises

As a Realtor in Florida, Davis didn't have the duty to disclose the death, but he did disclose when asked. But in states such as South Dakota, sellers must provide information about murder, suicide or any other felony that occurred in the past 12 months, Cota says.

Digging for bottom-barrel prices

Some people who hear about a home's violent history aren't worried about a haunting, says Mary Pope-Handy, a Realtor in Los Gatos, Calif., who sells normal houses but blogs about haunted real estate.

"Most of the time when people ask me to help them buy a haunted house, it's because they think they're going to pay 10 cents on the dollar for it," she says. "They're really bargain hunters."

It's true that the prices of stigmatized houses can be dramatically affected. In 2000, two Wright State University professors conducted a study on what they called "psychologically impacted" houses. They looked at sales across Ohio and found that stigmatized homes sold for about 3 percent less than nonaffected ones but languished on the market about 45 percent longer.

Many times, the price difference is more dramatic than a 3 percent dip.

Take Davis' example. He is trying to sell a foreclosed home in southwestern Florida. Usually this upgraded house on the water in an upscale St. Petersburg, Fla., neighborhood could sell for about $400,000 if there were no issues. But he guesses that it might go for a meager $75,000.

Blame it on the American Indian burial ground in the backyard.

"(The house) is worth essentially nothing right now," Davis says. "It's too close to the Indian burial ground, and the home should not have been built. I don't know how they got a certificate of occupancy because you need permitting and all that stuff to build a home."

He guesses the Indians were Calusa or Seminole, but either way, he must disclose the burial ground because it's a material fact about the physical condition of the property. The buyer will need to move the house to another location, he says.

Another turn at bat

Even in states where sellers and listing agents aren't required to disclose certain facts, homebuyers may have legal recourse if they believe the house has been misrepresented.

That can include an undisclosed infestation of bats. In the Sioux Falls, S.D., area, a bank-owned house became the new home to a colony of the critters. They swooped down and chased out an inspector, who "feared for his life" during a routine check, Cota says.

"The buyers wrote a letter to the bank and wanted out of the contract, and the bank gave them their earnest money back," she says.

However, Cota says, another family found bats in a different house and simply paid to have them removed.

"What bothers one person doesn't bother the next person," Cota says. "That's just true with anything in real estate."

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