What is a stigmatized property?
When events that occur at a property make it undesirable, it is known as stigmatized property. Also known as a psychologically impacted property.
How does a property become stigmatized?
It will become stigmatized if certain events occur there, such as murder, suicide, criminal activity or the presence of a ghost is known. Other situations which would lead to a property being stigmatized are the manufacture of drugs, such as meth, and gang activity. Additionally, the proximity of a property to a nuclear plant can lead to a stigmatized property.
However, the event does not have to be documented as fact for a property to become stigmatized. For example, there is usually no evidence to prove a house is haunted.
Is a broker required to disclose to a potential buyer they are marketing a property that may be stigmatized?
Usually, a potential buyer usually must receive a disclosure that property is stigmatized. However, the state a broker does business in will determine whether or not they have to disclose to a potential buyer whether or not a property is stigmatized.
Would the fact an occupant of the property had AIDS cause a property to be stigmatized?
No, the fact an occupant of the property had AIDS would not stigmatize the property. Under federal guidelines, the fact an occupant of a property has AIDS does not require disclosure.
If a property was stigmatized, what kind of impact would that have on its value?
Well, it depends what caused it to be considered stigmatized. Is the property haunted? If so, some buyers may be willing to pay a premium for the property. Did a suicide occur at the property? If so, a negative impact will usually happen. However, what if it was the home where Marilyn Monroe died? Someone may be willing to pay a premium to live at that stigmatized property.
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