Occasionally, when selling a house, or bringing a buyer to a property, we come across what is referred to as a 'stigma' associated with the property or area. Examples include:
- the property was used in the ongoing commission of a crime (e.g., drug dealing, chop shop, brothel);
- a murder or suicide occurred at the property;
- the property was previously owned by a notorious individual (e.g., organized crime leader, known murderer);
- there are reports that the property is haunted;
- it housed a former grow-op which has been remediated, according to the local health or building authority. These things can cause some buyers to stay clear, or possibly seek a reduced price (compared to similar, non-stigmatized) properties.
Ultimately 'stigma' is in the eye of the beholder. One person's problem may not bother another person. In fact, some will buy a 'stigmatized property' at below-market rates, and count their savings happily. Others will never consider one of these properties, and walk away immediately.
Realtor's should disclose what they know about a property, especially if (like the list above) it may cause buyer's regret or difficulty for the new owner. It is up to the Realtor to ask questions of the seller, and potential buyer to determine if they are comfortable with whatever the 'stigma' may be.
For a more exhaustive explanation see here on the OREA website.
