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Last updated: April 5, 2024 • Real Estate Market

How A Death in a Home Affects Its Value

Losing someone you love is never easy, and when it happens in a home, it can stir up a lot of emotions. But when it comes to figuring out a home’s value, there’s a lot more to consider than just its history. Buyers tend to focus on things they can see and touch, like the home’s location, size, and layout, rather than what happened there in the past. Most people just want a place that feels right for them and their families. 

However, it’s also true that for some buyers, a tragic event like a death in the home can cast a shadow over the property. While this isn’t true for everyone, it’s something sellers should be aware of. In some cases, it might affect the price a buyer is willing to pay. Even though rules about disclosing past events vary, being honest is always the best policy in real estate. It helps build trust between buyers and sellers and makes for smoother transactions. 

There are many houses where this life event has happened, and nothing has changed. If you inherit a property, you can keep the house and take advantage of it 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 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 a lousy reputation over a house and push the cost down. With this article, we will try to shed some light on whether a death affects a home’s value, which we hope you’ll find helpful.

Does the seller need to disclose a death? 

disclosure word on graph pencil

When filling out the disclosure form, you must know your legal obligations, especially regarding any deaths that may have occurred on the property. This requirement varies from state to state, so checking your state’s laws is essential.

For instance, in California, you are required to disclose any deaths on the property within the last three years. However, not all states have this rule. In places like Arizona, Georgia, and Pennsylvania, sellers are often not obligated to disclose deaths on the property. If you’re unsure, it’s wise to seek advice from a lawyer.

Remember, if a potential buyer directly asks you about deaths on the property, you can’t lie about it. Being dishonest could lead to legal trouble down the line. However, you likely won’t need to disclose this information in most cases, and buyers might not be overly bothered if they find out later.

How much does a home lose value in case of a death?

money bag word market price

When someone dies in a house, whether due to homicide, suicide, or other non-natural causes, it can significantly lower the property’s value. Randall Bell, an expert in real estate economics, says this decrease can range from 10% to 25%. The main reason for this drop is that potential buyers often feel uneasy about such events.

When a death happens on a property, it can label the home as “stigmatized.” This means it carries a negative psychological association but doesn’t necessarily have any physical damage. According to the National Association of Realtors (NAR), this stigma can affect buyer interest.

Buyers might also worry about the home’s reputation, mainly if it attracts curious visitors due to the previous event. Stories, gossip, and media attention can deter some buyers from considering a property where a death occurred.

Similarly, homes with lingering risks from past incidents, like being a former site of a meth lab accident, can raise red flags for potential buyers. 

Why does death affect the property’s resale value?

human hand on dark background

The stigma surrounding a property with a history of death often stems from deeply ingrained superstitions and cultural beliefs. Many people have an inherent discomfort with the idea of living in a house where a death has occurred. This unease can be aggravated by popular culture, including horror movies and urban legends, often portraying such properties as haunted or cursed.

Market Effects and Public Perception

The impact of stigma and superstition can be significant in the real estate market. Potential buyers may perceive a property with a history of death as having diminished value, regardless of its actual physical condition. This perception can lead to longer listing times and lower sale prices than similar properties without such a history, as seen above. Additionally, public perception of the property may affect its desirability in the eyes of prospective buyers, further influencing its marketability.

Psychological Impact

The psychological impact of a death on a property can vary significantly from person to person. For some individuals, the thought of living in a house where a tragic event occurred can evoke feelings of unease or even fear. These psychological barriers may prevent them from considering the property, no matter how appealing its features or amenities may be. On the other hand, some buyers may be more resilient to the psychological effects and may be willing to overlook the property’s history if it meets their other criteria.

Cultural Impact

Cultural beliefs and traditions also significantly shape perceptions of properties with a history of death. In some cultures, certain rituals or ceremonies may be performed to cleanse the space and remove any lingering negative energy associated with the event. These cultural practices can influence both the seller’s approach to marketing the property and the buyer’s willingness to consider it a potential home.

Real estate agents are instrumental in navigating the complexities of buying or selling a property with a history of death. Finding reliable real estate agents near you is crucial, especially in these situations. Agents must be transparent with potential buyers about the property’s past, including any relevant details about previous events. Open communication and honesty can help build trust and alleviate concerns, allowing buyers to decide whether the property fits them.

Mitigating Stigma

In some cases, sellers may take proactive steps to mitigate the stigma associated with a death on the property. This could include disclosing information upfront, performing cleansing rituals, or even renovating the property to change its appearance. These efforts aim to minimize potential buyers’ psychological impact and increase the property’s marketability in a sensitive and respectful manner.

How to increase the value of a house after a death

couple painting squares

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 instead 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 appreciate a nice garden with many 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 shed! Women devised this architectural innovation as a response to men’s caves! Passionate gardeners could transform a she shed into a storage shed for gardening tools. Avid readers will create a small library to read in their favorite chairs silently. We have already provided a few she-shed ideas, so I won’t go into much detail.

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

Probate sale: buying a house where someone died

key torn text probate sale

When looking to buy a house, people usually avoid the ones where someone passed away. However, some investors and house flippers want to buy houses through probate or short sales.

So, what’s probate? The legal process deals with the belongings of someone who has passed away without a will. It involves selling their stuff and dividing up what’s left among their family if they have any. Probate can be a hassle and can take quite a while.

When someone dies without a will, their property gets sold off during probate to pay off any debts they owe. Usually, a probate attorney or an estate representative works with a real estate agent who knows about probate sales to sell the property. The price is determined by looking at the local market and getting an appraisal, but it’s usually lower than what the house would sell for.

If you’re interested in buying a house during probate, you usually have to put down a 10% deposit, and once you do, you can only get it back if you end up being the new owner when everything is sorted out.

Sometimes, it can get complicated if there are disagreements among the heirs, and if the house doesn’t sell during probate, things can get even trickier. Plus, since only the owner would’ve known about all the issues with the house, the real estate agent might only be able to disclose some things.

So, if you want to ensure your property keeps its value and everyone knows who gets what when you’re gone, having a will in place is a good idea.

Author’s conclusion

In wrapping up, it’s clear that when it comes to a property’s value post-death, there’s a lot to consider. From the emotional weight to the legal obligations, it’s a journey that every seller and buyer navigates differently. What’s evident is that transparency is vital – being upfront about past events can build trust and alleviate concerns for potential buyers.

It’s also worth noting that while a property’s history may deter some, others might see potential in renovations and improvements. After all, home is where the heart is, and with a little TLC, any space can become a cherished sanctuary.

And let’s not forget the importance of having a will in place. It’s not just about ensuring your wishes are known; it can also streamline the process for your loved ones and prevent complications down the road.

So, as we close this chapter, remember that while a property’s value may fluctuate, the memories and experiences made within its walls are what genuinely make it priceless.

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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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