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Last updated: December 21, 2020 • Real Estate Market

How A Death in a Home Affects Its Value

Death is never an easy topic, but we publish this article because some of our real estate agents often have to deal with home sellers who disclose a grim past and wonder if the property’s history will take its toll and leave them with fewer dollars in their account. So, yes, death has an unsuspected impact on real estate and you, like many, would like to find the value of a house after death.

Nothing happens to the value of a house after a death that occurred naturally.

I’m not sure if there is such a thing as “the perfect death”, but I’m sure we all have an idea of how it should be: fast and painless. To die while asleep is for many the desired way to leave this world. Undoubtedly, some Earthlings have this honor and die of old age, at home, in their bed. And many say that’s such a blessing. Peaceful departures do not alter the value of the property.

There are many houses where this life event has happened and nothing changed. If there is only one sibling, he/she can keep the house and take advantage of this new property by renting it either long-term or short-term via Airbnb. If really lucky, the inherited property could be a vacation rental near a beach or in a ski resort! As we all know, in real estate, location dictates the price rather than the events that happened inside, although certain events can bring bad reputation over a house and push the price down.

Usually, if a traumatic event happened on the grounds of a home, the sellers are required to disclose exactly what happened. This is because anything that occurs on a home’s property can have an effect on the current and future owners. For instance, if a damaging flood occurred on the grounds of a home, the homeowners would then be required to disclose this information to any potential buyers of the home. This is done because any damage that happened to the home can cause a problem for future owners who may need to repair the damage. However, required disclosures vary from state to state. But, just like with any other major event that occurs on a  property, property owners are typically required to disclose a death on the property. This is especially true in the case of a violent crime that resulted in a death on the property.

Disclosing a death on the property of a home doesn’t necessarily mean that the value of a house after death will decrease. In actuality, there is no way to know what happened on the grounds of many older homes that are decades old. So, in reality, there are many homes and properties where someone has passed away on the grounds unbeknownst to the current owners. Sometimes if the death occurred decades ago, this information may not have been exposed. Every state has mandatory or voluntary disclosure rules so make sure your real estate agent and seller comply with them.

A dark history is definitely going to make the sale harder due to deeply rooted superstitions. Moreover, a property’s market price could be greatly diminished by a tragic event like a murder, a suicide or paranormal activity – an even greater drop in price than if the house was next to a cemetery. Now, a simple search on Google can reveal the past of any house that has ever appeared on the news. For home buyers who don’t base their decisions on superstitions and popular beliefs, stigmatized homes for sale are a godsend. Not only do they get to purchase a home at a very good price, but some of them even make a business out of exploiting a dark past. Murder scenes are a bargain!  

A very narrow niche is made up of real estate investors looking for stigmatized homes for sale. These real estate investors could be mistaken for wannabe-ghostbusters. They go where bad spirits thrive, buy infamous places and turn them into tourist attractions offering freaky tours and even a bed and breakfast! Two properties come to my mind right now: Villisca Axe Murder House (Villisca, IA) and Lizzie Borden House & Museum (Fall River, MA). Unsolved murders and poltergeist activity (even if very well staged) can become a profitable form of entertainment, especially on Halloween.

Death disclosure in real estate is not enforced by law in every state. For example, in Illinois, Realtors® don’t have to disclose a violent death in the house and if the seller doesn’t permit disclosure, the agent may say that he is not allowed to disclose. In California, deaths that occurred within the last three years must be revealed, while in other states agents are explicitly told that they don’t need to disclose any deaths to buyers. Some buyers might have second thoughts about their purchase due to superstitions, personal beliefs, cultural reasons or religion, but what is a problem for one buyer could be irrelevant for another buyer.  

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Increasing the value of a house after death

home between low and high price

A recent survey released by PenFed, the second largest credit union in the US, reveals that 54% of Americans who want to live in their dream home would rather renovate a house and give life to their imagination. Renovating, finishing a basement and improving a home’s curb appeal are great ways to compensate for any loss in price that an unfortunate past event could incur.

Work with a garden landscaping company and add a few rare species of trees and bulbs! Seniors looking to buy a house will definitely appreciate a nice garden with lots of flowers and shrubs. They have plenty of time for planting, pruning, and weeding so a garden will keep them busy. Install automatic irrigation equipment to keep the grass green all summer! Or paint the lawn if the area is dry!  

A flowering garden is also the best place to build a she shed! Women have come up with this architectural innovation as a response to men’s caves! Passionate gardeners could transform a she shed into a storage shed for their gardening tools. Avid readers will create a small library where they can read in silence in their favorite chair. We have already provided a few she shed ideas so I won’t go into much detail.

Do you think that your property is like one of those stigmatized homes for sale? Consider the tips above! Balancing the energies is not an easy task, but it should pay off!

Probate sale: buying a house where someone died

couple buys house during probate

When house-hunting, home buyers don’t start with the idea of buying a house where someone died. However, some real estate investors and house flippers have an appetite for probate sales or short sales.

What is probate? Probate is the legal process that covers the liabilities of a deceased person by selling his/her assets and splitting the estate left between heirs if there are any. Probate is not a pleasant procedure and usually takes time. When the homeowner died intestate, the property is sold during probate. The sale of a property usually is necessary to pay off the creditors, but it goes the traditional route – the probate attorney/estate representative collaborates with a real estate agent specialized in probate sales and lists the property. The price is decided after researching the local market and after obtaining a valuation from an appraiser. However, the price is usually lower than the market price. The client who decides to make an offer must pay a 10% deposit! This deposit is non-refundable unless s/he becomes the new owner when the sale procedure ends.

Sometimes, a house doesn’t sell during probate and the sale becomes really complicated because, if there are more heirs, every one of them has to agree. And another downside is that although real estate disclosure laws still apply, only the owner could have revealed all defects and issues. The real estate agent might report only the issues visible with the naked eye.

So, the value of a house after death is lower when a probate attorney has to fix the price. Preparing a will is a good way of protecting the value of the property and of clarifying who gets what out of your estate.

Now, if you really want to buy a house where nobody died, buy a new construction. Otherwise, accept that each and every house has its history, its births and deaths, its golden age and hidden mysteries. People take their memories with them when they leave to make room for new ones…

Let the past rest in peace! Start building your future!


4 Responses to " How A Death in a Home Affects Its Value "

  1. Diane Rivest says:

    I find this sentence a bit misleading: “Nothing happens to the value of a house after a death that occurred naturally.”
    It is a known fact that certain ethnicities will never buy a home where someone died no matter how they died. This in turn, affects the number of showings. There is always some level of a stigma attached to a house where someone passed away. Whether it shows on the final value can depend on many other market factors. This is my real estate appraiser’s 2 cents.

    • Diana Herdean says:

      We appreciate your feedback as we are trying to provide accurate and informative content through our blog. That sentence is strong and further below in the article we explain the instances in which a death in the home does affect the value of a home.

      However, in regards to certain cultures as well as superstitious or personal beliefs from some buyers, if they would never buy a property where someone has died, regardless of the way in which the death occurred, the topic can be covered before a showing. Also, additional showings don’t necessarily affect the price of the home.

      That buyer just didn’t fit with the house. That doesn’t mean that another buyer would demand a lower price for the property based on a natural death that happened on the premises. Other options for those more concerned about past deaths in a home are available in new developments or even building their own home.

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