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Buying the nightmare on Elm Street

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‘Haunted’ houses present a very real challenge for realtors

Realtor Dana Bull was doing a final inspection on a two-family property in Salem, Massachusetts, on behalf of a buyer who wanted to live in one unit and rent out other. The second unit already had tenants in it, and the buyer needed to decide whether to let them stay or try to find new ones.

As Bull and the inspector surveyed the rental unit—which she says was “filthy” and littered with “satanic decor”—Bull stumbled upon a door hidden behind a drape, a door she hadn’t noticed during her previous looks at the property. Behind it she found a curiously clean room with strange objects she didn’t recognize. The inspector did, though, and clued her in.

“It was a room where we guessed they were... sacrificing animals [as part of a religious practice],” Bull says. “Needless to say, my buyers didn’t pursue that property.”

While Bull encounters her fair share of odd situations in Salem, which attracts colorful characters because of its history as home to the infamous Salem witch trials in the late 17th century, her experience with homes that are associated with the occult highlights an issue realtors face across the country.

“Haunted” houses are considered “stigmatized,” an official designation that, though it means there’s no material defect with the house, still elicits an emotional response—usually the heebie-jeebies. Murders, suicides, drug manufacturing, general criminal activity, devil worshiping, extreme hoarding, and other unseemly practices, occurrences, and presences tend to scare off buyers who would otherwise be interested in a house, presenting realtors with the challenge of getting market value for what is otherwise a perfectly fine structure.

A survey from Realtor.com revealed this to be true. A full 49 percent of prospective homebuyers said they would not consider a haunted house under any circumstances, regardless of price cuts or added perks. But 18 percent of respondents said the perception of a house being haunted wouldn’t factor into their decision-making, nor would they need a concession in order to buy. The rest said they’d need some type of perk—a lower price, a larger kitchen, or a better neighborhood.

If a house has a material defect—such as a structural issue or a leaky roof—sellers are required to disclose this to potential buyers if they’re aware of it. But for stigmas, the law gets murky—and varies from state to state.

Stambovsky v. Ackley, a landmark case in New York from 1991, took on haunted houses directly. The plaintiff sued to rescind a real estate contract after learning the defendant had previously claimed in newspaper and magazine articles that the house was haunted. In what became known as the “Ghostbusters ruling,” an appeals court ruled in favor of the plaintiff, who was refunded the down payment.

According to Realtor.com, it’s understood now that in New York if a seller has “claimed to the public at large” that house is haunted, it is required to disclose this to the buyer. But if this is just a private belief of the seller, it is not required to be disclosed. Realtor.com’s advice: Be careful who you brag to about your house being haunted.

For other stigmas, such as deaths in the house, the law tends to be more codified, although the website DiedInHouse.com is a resource that can help buyers find out for themselves. In Massachusetts, the law is relatively lax; legally, Bull says, sellers don’t have to disclose stigmas unless the prospective buyer asks, but many do as a matter of ethics.

California realtor Cindi Hagley advocates for “over-disclosing,” though, in California, the rules around deaths are more strict. Sellers are required to disclose to buyers if there’s been a death in the house in the last three years. But the Golden State is one of a few exceptions, not the norm.

While Hagley is only licensed in California, she serves as a consultant on tricky disclosure cases all over the country and specializes on houses perceived to be haunted. But, unlike most realtors, Hagley is a true believer in the paranormal, having experienced what she describes as multiple supernatural occurrences first hand.

As a child, Hagley says she was awoken in the middle of the night by a voice that screamed “you can’t get in here right now.” She went to the bathroom to find the tub filled 4 inches high with individually lit matches. It was one of many startling occurrences in her family’s Rome, Ohio, home.

“My dad said ‘which one of you kids did this?’” Hagley recalled. “We were like ‘well none of us did it.’ It would have taken 10 people days to [light enough matches to] get 4 inches deep in that bathtub.”

In her consulting work, Hagley first visits the home in question to determine if there is a paranormal presence; sometimes there is, sometimes there isn’t, she says. If there is, she then helps the sellers make a decision about whether or not to disclose to buyers. She says she usually waits until she has a few offers before recommending the seller alert the buyer.

In a recent case in Colorado, Hagley says she visited a house where multiple deaths had occurred over several decades, and the occupants had witnessed shapes appearing on the stairs, the piano downstairs randomly playing itself, and radios turned without anyone present to do so.

“It truly sounded like there were other occupants actively living in that home,” Hagley says of the house, which ended up selling despite the concerns. “I thought there might be some sort of demonic presence around it. Demonology scares me. I had to physically step away after that.”

But for those who aren’t true believers in the occult, a “haunted” house won’t deter a home purchase at all, and, in a few rare cases, rumors of spirits can actually be a selling point, particularly if there’s a well-known story around the house.

That was the case with Victorian home that overlooks Polly Judd Park in Spokane, Washington. Polly Judd and her husband Thomas owned the home, and after World War II Polly took in former soldiers who needed shelter as they transitioned back to civilian life. In the 1960s and 70s, the house was a rental and continued to attract colorful characters.

But it also attracted troubled souls, as multiple suicides and deaths occurred in the house over the years. Bad fortune seemed to befall all the house’s subsequent owners, and there are no shortage of creepy stories about it from those in the neighborhood, says Spokane realtor Marianne Bornhoft, who has sold the house in the past.

Bornhoft says that after having a photographer shoot the house for the real estate listing, she noticed in the pictures that a chandelier was casting a shadow on the wall in the shape of three upside crosses. During an open house, Bornoft says a prospective buyer claims something or someone shoved her into a room in the basement, where she was trapped for hours. Bornhoft says that on one particularly creepy afternoon, the same chandelier from the photograph randomly began to swing.

“That house, more than any other house I’ve sold, had such weird, very odd things happen in it,” Bornhoft says. “It was very paranormal. I’m a Christian. I don’t believe in things like this, but I can’t explain what happened in that house. I’m not the only one. Repeated people had such odd experiences.”

But Bornhoft says the current owner, Greg Gordon, loves the history of the house, and in a recent story about the house in the local Spokesman-Review, Gordon says he doesn’t think the house is haunted, though his son seems to have different ideas.

“I was really worried that it was going to be detrimental to selling the house,” says Bornhoft. “But, in the end, the house was so iconic that I think that’s what attracted the people to [it].”