Stigmatized properties can present a selling challenge. 

Would you list a house that has a troubled history? Maybe a well-publicized murder happened there or the previous owners were convicted of a heinous crime. Or perhaps the house is rumored to be haunted.

Whatever the reason, stigmatized properties can be a hard sell in any market.

But it's not impossible find a willing buyer. In fact, sometimes the past that surrounds a home can actually work in its favor, says Mary Pope-Handy, ABR®, e-PRO®, a sales associate with the Sereno Group Real Estate in Los Gatos, Calif., who runs the Haunted Real Estate Blog at  Her blog caters to people who are interested in spooky homes, including those who want to buy one.

When in Doubt, Disclose

Some states require that real estate practitioners disclose up front if a home is stigmatized, but what constitutes a stigma varies. Some states don't consider a psychological stigma such as a murder or haunting, which don't affect the physical property, to be pertinent. But even in states where it's not the law, it's still best practice to be honest with buyers about the home's past.

After you've confirmed that the reasons for a stigma are factual, ask yourself if knowledge of the stigma would affect the willingness of a reasonable person to buy the property or would change the amount that person was willing to pay. Stigmas aren't always easy to classify, so use your best judgment.

Tom Jenson, SFR, learned this lesson the hard way. Several years ago, the broker-owner of SunWest, REALTORS®, in Lewisville, Texas, knew sellers whose next-door neighbor was disruptive, to say the least-she was known to leave her house naked and curse loudly. Although Jenson was aware of the neighbor's unusual habits, he didn't consider it to be a stigma and never told the buyers.

After the home sold, the new owners were horrified by their neighbor's behavior and were even more upset when they found out that she'd been doing it for years, but they were never told about it. They sued the sellers, and the court ordered the sellers to buy back the house.

Murders are easy to identify as a stigmatizing condition, but these day-to-day issues are a broker's call, says Jenson, who now specializes in selling problematic properties. You and your broker should have a discussion about suspected stigmas and whether they should be disclosed, as well as what all of the ramifications are.

It's also critical to explain to sellers the benefit of disclosing a stigma rather than having buyers find out about it on their own.

While sellers may not need to disclose the stigma to every casual looker, it's necessary to make the disclosure as early in the process as state or local law requires, allowing serious buyers sufficient time to consider the information. 

Clear Up their Questions

In Melinda Peterson's experience selling stigmatized properties-including a home where a murder took place-providing detailed information about the history is sometimes what buyers need.

For example, if buyers know that a death occurred at the property but know no other details, it could help if they learn that the person died of natural causes or that it happened decades ago, says Peterson, CRS, e-PRO®, of Real Estate Cafe in Grants Pass, Ore.

Peterson says one of the best ways to give a stigmatized house a brighter outlook is by making cosmetic updates. Adding a new coat of paint and planting trees, shrubs, and flowers makes the property look fresh, like it's no longer associated with its past, she says.