Appraising Haunted Houses!
So I know this is a bit of a break from what I normally post but it is actually something that may come up from time to time. Now in a lot of states it’s the law that an agent has to disclose the fact that a murder has taken place in a house to any prospective buyers. Now I’m not sure how many states have this law or even how many enforce them but they exist. There are also laws in some states that the fact that a house is haunted also has to be disclosed.
Now I’m not bringing this up because of an actual haunted house I’ve appraised but it does bring up a point of what do you do when there are certain unique features of a house that might dramatically affect the appraised value of said home. Perhaps a better example would be of a house that was used to cook meth. There are many laws on the books where homes that have been cleared to sell also have to have the fact that it was used in the manufacturing of illegal substances using very toxic processes so that full disclosure regarding the health and safety of the prospective buyer is covered.
But before you dismiss the fact that an actual haunted house might be silly, I’d like to turn your attention to a particular case I know of first hand. There is a particular Houston psychic reader who sometimes works with the police in solving murders. Well, because of her success rates with the police and her reputation of being an actual trusted psychic, she was also contacted in the post sale of a high-end Houston property. The new buyers felt that the property was haunted and they wanted to see if there was any recourse they could get for the previous owners not disclosing this fact to them. So they needed to have some proof or at least some expert testimony to the fact that the property was actually haunted, so they called the local psychic expert!
Now from an appraisal perspective, if this had happened during the sale, what would you do? Well the best thing to do is to document everything and list what steps you took to find out what type of impact these facts would have on the marketability of the property. You most likely won’t find another case and wouldn’t be able to make any adjustments but as long as you have the right disclosures in there as well as an extraordinary assumption about the haunting not actually being true then you can just value it as you would any other property. I know it’s rare but it can happen.
So what happened with the Houston case? As far as I know the new buyers weren’t able to get out of the sale nor get any judgement against the sellers or their agents. They did move out of the house (with full disclosure that they believed it was haunted). The property sold at market value and there is now a new family living there. Was it really haunted? I don’t know. I know the psychic thought that it was but that if they called in the right experts they could probably take care of the problem (think a PG version of The Exorcist).
In the end the whole idea I’m trying to convey is to cover your end. When it comes to crazy or unique factors in a property, disclose and document everything and you’ll be fine.