I’m looking to purchase a home in a historic district, but I want to be sure that it isn’t haunted. Do you have any advice that you could share?

It’s fun to be able to address this issue on Halloween weekend. I’m sure many stories of haunted houses are being exchanged to mark the occasion. Naturally, these stories have some asking the question, “Could you live at that address?”. For many the answer is an unwavering “No!” For others, it would be fine, especially if they can get a deal on the home. Fortunately for those who would object, many of the spooktacular addresses from the big screen, like 1428 Elm Street in Springwood, Ohio, are fictional and will never appear for sale. That said, the actual house in which A Nightmare on Elm Street was filmed, is a private residence located in Los Angeles.

But what about real properties that are thought to be haunted, like the home of my friends which they claimed had a friendly ghost they called Mr. Zitch? Or, as you’ve mentioned, historical homes that may have an unsettling history for some? Whether you believe in restless spirits or paranormal activity or not, the subject is something that is addressed in real estate transactions.

In the context of real estate, a “stigma” can be defined as a non-physical, intangible attribute of a property that may elicit a psychological or emotional response on the part of a potential buyer. There may have been an event or circumstance that occurred in or near the property that does not affect the property’s appearance or function but might be considered by some as emotionally disquieting. Stigmas are unrelated to the physical condition of a property.

Examples of stigmas may include:

    • The location where a tragic event occurred;
    • An interior or exterior with poor Feng Shui;
    • An address consisting of unlucky numbers;
    • A property where a serious crime has occurred; and,
    • A location where someone has died – a minor’s death can be especially stigmatizing.

What one person finds unacceptable may not be a stigma to another. Generally speaking, sellers are not required to disclose psychological stigmas relating to a property. Stigmas are personal and fall under the doctrine of caveat emptor, or buyer beware, meaning you should take steps to satisfy yourself that a property is free of what you may consider to be a stigma. This is why it is extremely important that you have an honest and direct conversation with your salesperson regarding anything you may consider a stigma – something not readily visible that would be unacceptable or negatively impact your decision to purchase. By bringing it to their attention, they can ask the seller about the history of their property and any existence of stigmas that you have identified.

Depending on how strongly you feel, in addition to having your real estate salesperson inquire on your behalf, you may also want to do some independent research to see what you may uncover. You can search online and go through local archives, and neighbouring residents can often be a good source for information too.

My advice to sellers who have information about a property that could be seen as a stigma to potential buyers is to speak with their salesperson to have a fulsome discussion of the issue. You may also want to speak with your real estate lawyer about what you may want or need to disclose.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

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