Definition Of Stigmatized Property In Real Estate

Definition of "Stigmatized Property"

Donald A. Miller, Real Estate Agent Home Buyers Marketing II, Inc.

Stigmatized property is a property that home buyers might back off on closing a deal due to factors that are not related to the property’s price, structural/aesthetic conditions and overall features.

The stigmas of a stigmatized property can include:

Criminal – a stigmatized property by a criminal activity. Say a house used to be a brothel or a drug den; it’s likely that a lot of home buyers will shy away from closing the deal worrying their doors will be knocked on a lot by former customers.

Debt – if the former owner of the property held a lot of debt, home buyers might look at the house as a stigmatized property fearing a lot of collectors unbeknownst to the change of ownership will come and annoy them.

Death – if there was a homicide or a suicide inside the house, home buyers might feel a bit weird living there. Some states and cities even demand the home seller disclose that information in their full disclosure. In California, for instance, it’s required that this information is made available to the home buyer if the death occurred less than 3 years ago.

Phenomena – Would you live in a haunted house if the price was right? Well, many consider a haunted house a stigmatized property, and some places do obligate the home seller to disclose that information.

Minimal – those are properties that are only stigmatized by a small group of people. Example: a person from one certain religion might see a property that used to be a temple for a “competing” religion, as a stigmatized property but people from the same religion as the temple will not care.

Public – it’s the opposite of the minimal; it’s that stigmatized property that everyone knows about its stigmatized history. A home where a slaughter of national dimensions occurred will fall into this stigmatized property category.

Real Estate Tip:

Need to know if a property is stigmatized – and how to deal with one that is? Get a real estate agent and let him (her) show you how!