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Disclosure, not sage-burning, will rid “murder homes” of ghosts, say real estate lawyers in Salt Lake City

May 24, 2014

Utah’s real estate market has exploded in the last couple of decades, especially as California residents migrate to the mountains that offer scenery, accessibility, and best of all for Californians, affordability. One such California couple on the hunt for a deal recently bought the home where retired Brigham Young University professor Kay Mortensen had been tied up and killed in a widely-publicized murder, according to this story in the Salt Lake Tribune. Real estate lawyers in Salt Lake City like R. Tee Spjute say that these so-called “stigmatized” homes come with their own set of disclosure rules, but that changes in ownership can bring healing for communities.

The rules for such houses differ from state to state, but in Utah, “the seller and the broker are under no legal obligation to tell the buyer about the stigma if it has nothing to do with the home’s structure.” However, real estate lawyers in Salt Lake City like Spjute say that, legality aside, the truth will come out—if not through internet research about the property, then with stories from neighbors soon enough. It’s a good idea to disclose some of these facts, and if potential buyers ask, the seller and agent are required to tell the truth.

While lying outright about stigmatized homes isn’t much of an issue, glossing over some of the darker stories about homes can be problematic. One recent study by Wright State University looked at 102 stigmatized homes in the state of Ohio and reported that brokers disclosed the stigma to sellers only about 80 percent of the time. In some cases, brokers didn’t reveal history on the house at all because the seller didn’t tell the broker about the house’s history. Real estate lawyers in Salt Lake City say that hidden information from brokers can do funny things to liability, legally, but lawsuits relating to disclosure about stigmatized homes aren’t on the rise.

Stigmatized properties struggle on the market, which is why the couple from California got the Mortensen’s murder house on the cheap. Stigmatized homes take on average 45 percent longer to sell than “comparable properties that did not carry a stigma,” and sell for about 3 percent less, according to the Wright U. study. Impact can take five to seven years to wear off, and in the event of well-publicized tragedies, homes can lose as much as 15-35 percent of their value.

These kinds of devastating devaluations give realtors incentives to “try their best to give the haunts new life,” and that means honesty. Real estate lawyers in Salt Lake City agree that openness and full disclosure can start the right buyers off on the best foot with their new home. But not immediately. Strategies used by agents include selling homes on their strengths first, waiting for potential buyers to get emotionally attached, and then droping an “oh by the way…” into casual conversation when they’re more serious about purchasing.

It seems to be working. And not just in a “let’s ignore it and pretend it never happened” way, but in a way that heals the scars of the communities. “There’s a real opportunity in a neighborhood to be kind of heroic. You…make a fresh start for everyone,” says one Utah realtor. Now that is kind of inspiring.

 

 

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