For many people, their homes hold fond memories. They can look at various rooms and corners and remember special events, like a child’s first step, a big announcement or a tender moment. They may also remember bad things, such as the spot where someone suffered an injury, the room where they had that big fight or right where they were standing when they got some bad news.

Memories are part of homes, and that’s what makes your job as a real estate agent such an important one. However, certain homes carry more than good or bad memories. Certain properties have histories that are so negative, they may actually affect the value of the home and your ability to sell it.

What are stigmas?

A house that has such an undesirable history that it may lower its value is known as a stigmatized property. A property can obtain a stigma for many different reasons, but the bottom line is that prospective buyers may have psychological or emotional reactions to living in such a home. Common stigmas include the following:

• Someone committed suicide on the property
• A child died of neglect or abuse on the property
• The previous occupants used the home to conduct criminal activity, such as selling drugs, or a crime occurred in the home, such as a kidnapping
• There was domestic violence in the home
• The property was rumored to be a place of cultic activity
• Previous occupants claim to have witnessed paranormal activity in the home
• The home was the scene of a violent death

Sensitive buyers may want to steer clear of stigmatized properties, but how much are you obligated to reveal to them?

Know the laws for your state

Every state has different rules for what you must disclose. For some, you must reveal if someone died in the home, no matter the cause. When it comes to stigmas that do not materially affect the property, you are within the bounds of integrity to obey the laws of your state and not volunteer information about the stigma. Best practices also say it is wise to give an honest answer if a client asks, especially if you sense the buyer may be seriously interested in the stigmatized property. 

Additionally, some stigmas can be a burden to new homeowners. For example, if previous occupants once sold drugs, the new owners may have drug seekers knocking on their door. The scene of a widely publicized crime may draw sightseers and gawkers. These may be material stigmas an owner should know, and you would be wise to know the law and to carefully consider what information it is better to disclose.