What Are Stigmatized Properties?
A stigma is a potential cause of concern when it comes to real estate properties. Some stigmas are real while others are imagined. However, it should be noted that both kinds of stigma can impact the value of real estate.
Real stigmas tend to be based on something related to the material condition of a home. For example, sometimes a home goes under contract but that contract soon falls through due to the buyer voiding the contract following their home inspection. This home could be stigmatized as future buyers may hesitate to pursue it if the initial buyers’ reasons for voiding are a mystery.
In contrast, imagined stigmas tend to be based on something that had no impact on the material condition of a home, but still managed to influence its value on the local real estate market. For example, a home that was once the scene of an infamous crime could be considered stigmatized. Even homes that are reputed to be haunted would be considered stigmatized, though it is interesting to note that there is also a subset of housing consumers who might be interested in them for that precise reason.
Why Should You Watch Out for Stigmatized Properties?
There are a number of reasons that home buyers should watch out for stigmatized properties:
- Different jurisdictions have different requirements about what sellers and/or their real estate agents are and are not required to disclose about stigmatized properties. However, there can sometimes be grey area about what has to be disclosed, meaning that homebuyers can end up buying properties without knowing all of the factors affecting its long-term value.
- Whether home buyers care about the stigmas or not, they should remember that there are other housing consumers out there who will care. As a result, something like their home having a reputation for being haunted may impact how much the home is worth, as well as how fast they will be able to sell it if they ever choose to move. This does not mean that homebuyers should avoid stigmatized properties altogether, just that they should take it into consideration so that they will make a fully-informed homebuying decision.
- In some cases, stigmas can make their presence felt by the homeowners in more ways than just the value of their homes on local real estate markets. For example, when someone buys a home previously owned by a debtor who defaulted on their debts, there is a chance that they will be hounded by a debt collection agency for no fault of their own.
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Home-buying is a process filled with complications such as these. As a result, home buyers should seek out a reputable real estate agent such as John Seggerman who can provide them with the real estate expertise and experience that they need to ensure the best results.