Stigmatized Property

The real estate industry no longer wants to use the term ‘stigmatized home’ ; they would like to convert it to a softer word by calling it a ‘distressed home’. 

I find that utterly ridiculous and insulting. Instead of taking care of industry issues they want to re-label the words to be more emotionally pleasing. Changing the word is NOT going to change the issues we are having with stigmatized homes. The truth of the matter is that the real estate industry needs training, understanding, compassion, and more importantly an open mind into the paranormal. 

A popular question you will hear from a majority of buyers when they find out someone died in a home is, “is it haunted”?  For that reason, real estate professionals must be educated enough to discuss the paranormal, spirits, and haunted if you are going to overcome the buyer’s question, “is it haunted”. 

Let me be very clear, to me a distressed home is a handyman special or a foreclosure. A stigmatized home means something happened in a house where I may not be comfortable living even though the house is perfectly habitable. 

Welcome!

What is a stigmatized home?

Within the real estate industry there is a term called Stigmatized Properties or Distress Properties. These are terms used to describe homes that may have an unfavorable quality but are not related to its physical condition. Throughout my site I will only refer to these unique properties as stigmatized homes. 

The psychologically traumatizing event doesn't directly affect the functionality or appearance of the home but may trigger a negative psychological effect on a potential buyer that would prevent them from buying the home.

This negative effect of the stigmatizing event may make it much harder to sell and could ultimately adversely affect its market value and the market value of the entire neighborhood.

A stigmatized home is not only where a homicide or suicide took place. In fact, there are many examples where a home might be considered stigmatized such as:

  • Murder (mass murder) or suicide took place;
  • Notorious criminal or gang leader lived;
  • Well-known drug house stands;
  • A cult group performed sacrificial rituals; 
  • Grow-op existed;
  • House is reportedly known to be haunted;
  • A known criminal or pedophile lived in; 
  • Property is next to cemetery,
  • Group of sex-trade workers live or work;
  • Old burial ground exists;
  • Physical torture occurred;
  • Bodies were buried;

According to a research paper written by Patrick Gourley on November 6, 2015, "The costs of social stigma could be large. A non-rigorous estimate concluded that a house loses 10-15 percent of its value on average if someone is murdered on the property (Milford 2013)." 


My Specialized Listing Program


Selling a stigmatized home properly is not a simple process. It requires special care and attention. It is not an average home on the market. It is a property that has special circumstances and needs to be handled totally different than an average listing.

The market value of an entire neighbourhood may suffer when a stigmatizing event occurs. Based on my research, over a three year period after a stigmatizing event happens, neighbours begin to move away. They will report, "It's not the same here since that happened, we used to have a nice neighbourhood." 

I take the resale of a stigmatized home very seriously. When an inexperienced agent lists a stigmatized home they do not have the necessary skill set or experience level to deal with the death and grief. 

The inexperienced agent will keep reducing the house seriously below market value as a method to get the home sold. This inexperience stigmatizes the property even more and reduces the entire neighbourhood's housing market value. The lending institution suffers as they may take a huge loss just to have the home sold. 

Reducing the property substantially below market value is a reactive approach to resale. I take a very pro-active approach which is the only way to properly assist the home owner, restore neighbourhood confidence and peace, and to minimize the lending institution's loss through appropriate resale methods. 

When a psychologically traumatizing event occurs within a neighbourhood it affects everyone starting with the homeowners; neighbours; the lending institution; the buyers walking through (especially if it was never disclosed); and the subsequent final purchaser.

Based on my experience helping others deal with death and the grieving process, I have carefully created a thoughtful effective plan to sell stigmatized homes.  

I am not just reselling a home, I believe I am mending a community after unthinkable tragedy and crisis. Real estate is not just a transaction for me, it is about relationships and the people within a community.

When something traumatic happens in a home it can be psychologically challenging for a buyer to feel comfortable living there. If a real estate agent cannot help them then the property’s market value begins to drop. The longer it takes to sell the home, the more the value drops. That is why it is so important to get the initial stigma resolved quickly and effectively. 

Although time consuming, there are four parts to get the highest market value for a stigmatized home. It is not the only way but I have found so far that it is the best way, here they are: 

  1. Community Resolution Program: This is a conflict resolution debriefing solution to begin the healing process for the community within weeks after a tragic event. It is optimal to wait 3 months after the event and ideally before 2 years as the original neighbors tend to move away within 3 years.

  2. Private Open Houses: This is a discreet method to disclose pertinent details to assist the immediate neighbors with the trauma of the event.

  3. Neighbourhood Meeting: Designed to help unite the community in a public forum as the stigmatized home is being prepared to go on the market.

  4. Spiritual House Cleansing: Is performed immediately upon receiving the listing, throughout renovations, during the sale, and on the day of possession.

However, a successful process is not enough. You must be aware of the challenges. There are several challenges that I have learned to overcome to increase my probability to sell the home for market value or higher.

Overcoming Challenges

First I had to learn what challenges could impede a successful sale. Then I had to learn to overcome them quickly if we were going to sell for market value.

The Lending Institution

 establish open lines of communication with the mortgage holder especially if the mortgage is in arrears.

Canvas the Neighborhood Quickly

I get into the neighborhood quickly and depending on the situation I have the necessary knowledge and experience in the area of death and grief to restore neighborhood peace. My immediate goal is to overcome the neighborhood gossip.

Establish Price and Current Market Conditions

I research carefully so I can begin to create and implement a powerful marketing plan. It is best to establish an accurate listing price without having to do additional price reductions. Price adjustments also help to further distress a home and prolong the stigma.

Create New Buyer Base

Although I have a strong buyer network that trusts me, the challenge here is meeting new buyers and creating that trust and building rapport. Most buyers are looking for a home for their family and they need to be shown that I will provide them with an amazing property so they can purchase with confidence and excitement. This usually means discussing spiritual energy, haunted, and ghosts and many buyers are quite pleased to have a real estate agent also be a near-death survivor.

Real Estate Marketing Plan

must incorporate the trauma of death that was experienced by the family, neighbors, and community. The neighborhood crisis needs to be addressed and contained immediately. The neighborhood gossip needs to be silenced quickly to stop further distress.

Set Realistic Time Expectations

so I can complete a sales transaction. This will be dependent on the situation and how long ago the traumatic event took place.

The Spiritual (Energetic) Aspect

must be implemented immediately regardless of the length of time. The quicker this stage is done the quicker the neighborhood is restored back to neutrality. This is a very active and busy stage in the selling process. This is where the Paranormal Real Estate Service helps.

Reducing Neighborhood Fear and Anxiety

...is one of the most important things to do before we expose the home to the general market. Neighbourhood anxiety will be felt by any potential buyer and we will lose any chance to get that buyer back.

Showing a Distressed Home Prematurely

before a home is fully prepared for sale it is careless to show prematurely and will diminish my chances to maintain neighbourhood market values or find a stable buyer willing to put his/her family in there.

FYI:  Based on national market research, if this process is not done properly, neighborhoods with stigmatized properties tend to be converted to rental properties. This decreases the visual integrity of the community and leaves the neighborhood more transient.

I am very proud of the work I have done, the research that has been completed and mostly of my team of qualified professionals. Together we have the passion, expertise, and experience to successfully sell any home tainted by a stigmatizing event.  

How Many Stigmatized Homes Are There?

Surprisingly there are hundreds of thousands of stigmatized homes across North America. Astoundingly there are over 800 reported in Alberta.

There is an interesting website called House Creep dot com. All addresses and posts are user submitted. The site was designed to compile a list of all the stigmatized homes in Canada.

Because disclosing stigmatized properties was not a Realtor’s liability but more of a Buyer Beware situation, users update this site for informational purposes.

Do I Need to Disclose if a Death Happened in my Home?

Defects & Disclosures in Canadian Real Estate

Legally sellers must not conceal defects or try to mislead buyers about the condition of their property. Sellers must be honest when answering questions about defects within their home. 

If the deficiency within the property is visible to the naked eye and is in relatively plain view then that defect is known as Patent Defect.  

Some examples of a patent defect would be a broken window pane, linoleum that is cut and marked up, holes in the doors, or leaky faucets. A patent defect is a common issue that most buyers look for when they are serious about buying a home.  

However, if the defect in the property is not in plain view and cannot be found by reasonable inspection then the defect is known as Latent Defect.  

Some examples of a latent defect are structural damage, cracked foundation, or excessive water damage behind walls.  Any material latent defects must be disclosed to potential buyers, whether the seller sells the property themselves or through a real estate professional.

A property that is considered stigmatized under Canadian common law is not considered a defect and does not have to be disclosed. A stigmatized property is where any event occurred or notorious person(s) lived that may cause a buyer to be psychologically impacted.

The psychologically traumatizing event doesn’t directly affect the functionality or appearance of the home but may trigger a negative psychological effect on a potential buyer that may prevent them from buying the home if they knew.

Therefore the answer is no, a psychologically stigmatizing event that occurred in a home that is for sale doesn’t have to be disclosed by law in Canada except for Quebec. It is considered Buyer Beware. 

Canadian Realtors practice under common law and there is no legislation that defines or deals with stigmatized properties. 

Although it is morally and ethically appropriate to disclose, most real estate agents do not disclose any psychological stigmatizing event that happened in the property for fear they will not be able to sell it.  

I have found that a psychologically traumatizing event is NOT what causes a home to be deemed “stigmatized”. It is only the emotional response that gets provoked by the buyer. If the buyers in general deem that the event stimulates too much of a negative emotional response then they will not purchase home regardless that the home is in perfectly functioning condition. 

My success in dealing with stigmatized properties has been based on my experience from my near-death experience because I help the buyer understand his negative emotional response and I remove the stigma from the event. 

Stigmas are based on an individual's perception and emotional spiritual belief system so the stigma will vary from each person. The key to success is to understand their spiritual belief system first. 

Based on my experience, I always disclose any issue that happened in the home. The old saying goes, “if the walls could talk...” actually your neighbours do! 

The potential buyer of your home will eventually find out about most things that happen in the neighbourhood so it is best to be upfront immediately. 

Most Google searches on an address will tell you everything you need to know about a home.

 

Paying Your Mortgage & Lender Challenges

Understanding Lender Challenges

When a home becomes stigmatized in any way its market value drops suddenly. The longer it takes to sell the home, the farther the value decreases. Depending on circumstances, the increased loss in value means a higher probability the lender will not recover the full outstanding mortgage amount resulting in higher lender deficits.   

Lenders must overcome the following challenges if they are going to recover their costs. These are a few of the mistakes that Lenders tend to make:  

Welcome!

1. Inexperienced Listing Agent

The Lending Institution that is holding the mortgage chooses an inexperienced listing agent to sell the property. I have an established skill set and market expertise to re-brand the stigmatized home which helps to decrease the amount of time the home is on the market. This is an asset for the Lending Institution because they will recover their money quicker.

2. Agent Lacks Knowledge Dealing With Grief Stricken Sellers

The inexperienced agent lacks knowledge and experience in the area of death and grief. The agent cannot overcome the market objections and neighborhood gossip. The only course of action the agent knows is to do large continual price reductions to attract a solid deal. This is the beginning of a transient neighborhood and the start of decreasing land values. Based on my near-death experience and working with families of terminally ill, I understand the loss the sellers are going through and I am able to bridge their pain and do effective business. This is an asset for the Lending Institution because the seller is making sound business decisions based on facts and not in emotional crisis.

3. Lack of Buyer Base

The buyer base becomes dramatically reduced. Most buyers are looking for a home for their family and they do not want to live in a home where a psychologically traumatizing event took place. The inexperienced agent will try to get an investor to buy as a rental opportunity. Subsequently, this business practice is how neighborhoods turn into transient rental areas.  My speciality is to maintain the neighborhood integrity by finding a family to buy the home by discussing the paranormal, resolving their spiritual concerns, and answering their questions based on my near-death experience. I show the buyers respect and can empathize with their spiritual beliefs. This is a huge asset to the Lending Institution because I can resolve the buyer’s fears and concerns and help them understand the stigma which in itself, removes the stigma and the buyers are comfortable to purchase the home. This maintains the property value and minimizes a lender’s loss.

4. Lack of a Marketing Plan

The inexperienced agent lacks an appropriate marketing plan and it never incorporates the trauma of death that the neighbors or community has experienced.  The neighborhood crisis needs to be addressed and contained. The lack of expertise marketing for stigmatized homes will lead to rampant neighborhood gossip that would be very difficult to overcome if left unattended for a long period of time. This behavior may pose a huge loss to the Lending Institution. I have a Community Resolution Plan that minimizes neighborhood crisis and gossip which helps facilitate a sale quicker because I get the neighbors to help me find the right buyer.

5. Real Estate Agents Will NOT Talk About Ghosts

The inexperienced agent are not going to discuss the spiritual (Energetic) aspect but it cannot be overlooked.  This is where rumors of ghosts and hauntings begin to surface. If this aspect is not handled properly and effectively then the stigma begins to take on a life of its own. Wouldn’t it be better to have the neighborhood taking about what is being proactively completed rather than the gossip of ghosts and hauntings?  I am a workshop facilitator teaching others about spiritual energy and helping others understand death. This is a huge asset to the Lending Institution because I can overcome this objection very easily allowing me to sell the stigmatized property. I handle the objection and then close the sale.

6. Many inexperienced Agents Will Not Disclose the Stigma

The fear of the unknown creates anxiety. When buyers have anxiety and fear they will not even want to see the home. That is why inexperienced agents do not disclose the property suffered a stigma until after the buyer has seen the home.  When the neighbors have fear and anxiety they will tend to gossip, move from the neighborhood, and unknowingly interfere with the sales process. I have a full transparency policy because I am confident I can overcome the objection of ghosts and haunting and I remove all of the unknown which removes anxiety. I am confident in my sales abilities, my communication skills, and my art of negotiation so I can close a sale with a happy buyer. My transparency policy is a huge asset to any lending institution as there is no potential future liability, the buyer is happy and the lender loss is minimal.

Although many Financial Institutions and lenders do not believe in haunted houses or ghosts but the fact is, there are many buyers in the marketplace that do! It is those buyer beliefs, worries, fears, and concerns that need to be shown respect and understanding before they will comfortably buy a stigmatized home. 

I have worked really hard to try and change the perception of death and its relevance when buying or selling a home. But I need more help in educating the buyers’ market and the real estate industry. 

If you would like to discuss in more detail my customized Seller’s Listing Plan for a Stigmatized Property I would be happy to meet with you. Please contact me direct at 780-887-5080 or email me at broker@infiniterealtyservice.com

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