Beware the ghost of real estate past
Tomorrow is Halloween, a celebration thought to have pagan roots connected to the end of harvest season. European countries have traditions going back centuries related to Halloween, sometimes honoring the dead on this day and conjuring up spirits. In this country we pretty much have fun dressing up the kids and sending them out to trick or treat, but in some cultures and indeed to some people the idea of spirits haunting their homes are more than a little off-putting. The good news, however, is that when you sell your property, ghosts are a non-issue.
Since the authenticity of a haunted house is subjective, the law fortunately recognizes this. Florida law states that if the property was a site of a homicide, suicide or death it is not a material fact which must be disclosed. The same can be said for houses considered “haunted” where a disclosure is not required. On a little bit of a separate issue, Florida law also stipulates that HIV and AIDS status are not material facts that must be disclosed in a real estate transaction. However, disclosing some facts about a property that may be considered “stigmatized” even if the law does not mandate is probably good business and will make for one less hurdle to overcome during the negotiation process.
Stigmatized properties where high profile homicides or reported hauntings may have occurred could certainly sell for less and could be a difficult process. But generally real estate values find their own level and even properties that have been the scene of horrific acts will eventually sell.
Most buyers in the United States are not particularly superstitious but in China properties where someone had passed away even by natural causes will have an impact on property value. In Hong Kong there are websites that track hunted houses or hongza in Cantonese. Typically these properties sell or rent for discounted prices sometimes as much as a third less. Even properties near funeral homes or cemeteries sell for less and Hong Kong banks often won’t issue mortgages for haunted apartments assuming that the property values are too much of an unknown.
Now, however, even the traditionally superstitious Chinese are bending to the property boom that Hong Kong has been experiencing and seeking out hongza properties. This new phenomena has practically eliminated the “haunted house discount” that bargain hunting Hong Kong residents have depended on.
Even in New York City’s expensive and frequently cut throat real estate market, having a 13th floor in an apartment building can have a negative effect. Although the vast majority of people don’t buy into the idea of unlucky 13, less than 5 percent of mid- and high-rise residential condo buildings in Manhattan and Brooklyn have a designated 13th floor. While many older buildings in New York City do have a 13th floor, developers of new construction frequently decide to omit the 13th floor even before ground is broken. Both developers and real estate professionals admit that there is less than a 1 percent chance that someone won’t purchase an apartment on the 13th floor. Nevertheless why take the chance of potential buyers being turned off even if it’s just on a subliminal level. Some New York developers are also dropping the 4th floor from their buildings which is an unlucky number to the Chinese.
Whatever your superstitions are or whether you believe in spirits haunting houses it’s important to remember that all of this is subjective and really has no place in the sale of real estate. Hopefully tomorrow the only thing haunting your house is the little person in the Walgreens Casper costume.
