Hi there. Are you curious about stigmatized properties and what that
means when it is time to buy or sell? In today's video we are talking about
stigmatized properties and real estate.
Let's explore this potentially spooky topic.
Hi, my name is Emily Farber and I'm a Realtor® with Lepic-Kroeger, Realtors® in Iowa City,
Iowa. Today's video is all about stigmatized properties. What is a stigma?
What do sellers need to disclose in the state of Iowa? And, how do buyer's protect
themselves if they have concerns about stigmatized properties?
You may be wondering, "What is a stigmatized property?" A stigmatized
property is a piece of real estate that has a stigma attached to it by the
general public. Stigmatized properties in real estate
are those that society has found to be... shall we say... undesirable because of an
event that occurred there, or because of the house's proximity to a known nuisance.
Some common examples of stigma in real estate include: a death in the house, be
it natural, homicide or suicide. Criminal activity on the property. Public stigma.
Rumors of haunting, or even nearby sex offenders. If a house is old enough
chances are likely that somebody, somewhere, over the course of the house's
history, has died in the house. In fact I think it's even becoming more common as
people want to live their final days in the comfort of their own home. Some
states have laws governing the disclosure of such stigma as part of the
sellers property disclosure. Others do not.
Iowa is a state that does not require seller disclosure of stigma. The National
Association of Realtors® requires that Realtors®
voluntarily disclose any known facts that could affect a reasonable
purchaser's decision to buy. As as a quick review here is what a material fact or a
material defect is: A material fact is considered adverse when it involves a
condition or an occurrence that is recognized by a competent licensee as
significantly and adversely affecting the value of a property. Significantly
reducing the structural integrity of the improvement of real estate. Presenting a
significant health risk to the occupants of the property. The sticky wicket is
that what is considered a material defect by one buyer may not be
considered a material defect by the seller. What one person may consider to
be a total deal-breaker may be inconsequential to the next. And
that, my friends, is why the state of Iowa does not require sellers to disclose
stigmas on their sellers property disclosure.
While nobody wants to disclose that sad or horrible things may have happened in the house, it's not the house's fault that those things
happen there. However, if you are concerned about your legal liability and
a potential buyer finding out about it after the fact. (Which they always do...neighbors talk.) You
should disclose. That way you have all of your bases covered and nobody can come
back and claim that you hid important information from them. It is always
preferable to lose a buyer who is going to be unhappy with
the condition, physical or psychological, of your house and search a little bit
longer for someone who is truly thrilled to have the opportunity to buy our house.
Some good ways to research the property if you are concerned about potential stigma are
websites like www.diedinhouse.com which is a pay for service website that searches
public records for notice of death at certain addresses. Another good resource
is to check with your local police department and check crime reports for
the area. If you are especially concerned about just the whole neighborhood vibe
you may want to go knock on some neighbors doors and see what they have
to say about the neighborhood and the house in general.
All right, in all seriousness, would you ever consider buying a house in which
somebody had died? Leave me a comment down below because I'm curious. Hey, don't
forget to subscribe, and remember to ring that bell, that way you'll be notified
every time I put out a new video, which by the way, is every Friday. It's been fun!
Thanks for joining me.