Suppose there was a murder at your house. Suppose, for the sake of keeping you in this hypothetical situation, it was the murder-suicide of a couple that was renting it from you, which has made you understandably keen on getting rid of the place. If you were serious about receiving anything close to market value for it, you would call someone like Randall Bell.
Bell, who runs an appraisal firm specializing in real estate damage economics, can count the Boulder home where JonBenet Ramsey was murdered, the Rancho Sante Fe mansion where the Heaven's Gate cult committed mass suicide, and Nicole Brown Simpson's Los Angeles condo among the appraised properties on his very morbid CV. Profiled last year by the LA Times for evaluating a Las Vegas home plagued by rumors of cult activity, he also consulted on the World Trade Center site in New York City, and the field in Pennsylvania where United Airlines Flight 93 went down.
Bell spends much of his time traveling to disaster areas and former crime scenes, either to work as a consultant for property owners there or to gather data to better advise a client in a similar situation. Here, gleaned from a phone interview, are what might be called the best practices of hawking stigmatized properties.
This may seem like a no-brainer, but Bell once worked a case where, after a family had moved into their new home, the daughter found a bullet hole in her closet. The father proceeded to trace the path of the bullet back to its probable starting point, in the garage, where he found "brain matter" below the water heater, where the previous occupant had committed suicide. This was the first time the family had heard of this event, which is why they sued the brokers, the former owners, "everyone in sight." Which brings us to our next point.
This is the number one rule, according to Bell, the breaking of which "gets a lot of people in trouble, and frankly, creates a lot of business for people like me." Many states have laws that clarify real-estate agents' duty to disclose past events that might devalue a property. Though concealing the truth may land you a buyer sooner, Bell asserts that "all ethics aside, honesty is the best policy, because it'll keep you out of the courtroom."
If you want to sell right away, be realistic about the fact that you're going to take a hit.
Though Bell has been quoted as saying there's usually a 15-to-25 percent decrease in value for a few years after the event, which then goes away over a period of one to twenty-five years, and he agrees with that as a "general theme," he's hesitant to paint with such a broad brush. Over his decades of research, he's heard of properties selling for a premium, like the site of the now-demolished Milwaukee apartment building where Jeffrey Dahmer murdered many of his victims. It took 20 years, but the Benedict Canyon mansion where Sharon Tate was murdered by the Manson "family" sold for the full market value. He's also seen cases of one-hundred-percent loss, like the site of the San Ysidro McDonald's massacre of 1984, where the owners "can't give the land away." If you plan on letting the property go soon after the event, you're almost assured to get below market value.
Consider renting it out for a few years.
This not only allows you to ride out the period with the steepest drop in price, but it's also much easier to sell one of these homes when they're occupied than when they're vacant. (See "Avoid the 'Haunted House Effect.'")
Bell isn't a "big fan" of tearing down properties. Like the vengeful spirits in Poltergeist, the stigma attaches itself "permanently to the land," not the structure. (A simple parallel that demonstrates this is how we treat former battlefields.) Bell was recently in Jefferson County, Colorado, doing research for the appraisal of a property that confidentiality agreements keep him from disclosing, and was impressed by the fact that neither Columbine High School nor the shooters' houses had been torn down. Bell sees both the school and the residences as a "textbook example" for how to deal with communal tragedy (one that, it's worth noting, the town of Newtown, Connecticut did not follow with Sandy Hook Elementary School). Demolishing, according to Bell, can "make the memories linger longer, rather than moving things forward."
...But you might want to think about replacing the facade.
A lot of property owners end up changing the outer appearance of a home if it gets a lot of media coverage, to "take away the mental cues of what happened." Bell reports being unable to find Nicole Brown Simpson's Brentwood condo after the owner had renovated the exterior, despite having been there a lot. When he finally found it, he spotted some tourists getting out of a car with Florida plates down the road, taking pictures of the wrong house.
Keep the address the same.
Changing it will only add more attention to the situation.
Insurers and lenders can be your friends.
Home insurance can cover many of your repair costs, as it did with the Heaven's Gate mansion, after the gurneys that wheeled out the bodies scratched the marble floors in the entryway. Bring up your situation with lenders if you need an extension, or a renegotiation of terms.
Take pains to avoid the "Haunted House Effect."
Keep up the exterior as best you can, and again, keep it occupied. (Or failing that, at least keep it properly secured.) Bell describes this as "keeping the lights on, both literally and figuratively," because "there's a segment of society that likes to break in if your house looks haunted." (This is generally understood to be worse if you're in a Victorian.) As Bell has pointed out before, perception is everything with stigmatized properties, which is why, when he consults on places where there are only rumors of cult murders or satanic rites, he effectively treats them as if they're real, seeking out properties with documented cases of such activities to use as points of reference. The flip side of the fact that perception is everything is that what the neighborhood thinks about your murder house is often much more important than how much media attention it has received, at least where price is concerned. So keep your neighbors apprised of what's going on with the place, and above all, be a good one yourself.