Should you buy a haunted house?

If you're haunted by a dream home that's out of your price range, or you've just always wanted to live in a house with a paranormal presence, then perhaps it's time to consider asking your realtor to show you some "psychologically impacted" properties.

But, let the buyer beware! While these seemingly idyllic homes on great streets may seem like the dream deal, they may come with details that could make reselling a nightmare when you want to leave.

What is 'psychologically impacted' property?

While most people understand structural defects and why houses with them frequently command lower asking prices, what's less clear is when a defect is related to the psychology of owning the home. Properties with psychological defects, also known as stigmatized properties, are residences where certain circumstances, suspicions, or facts exist that carry the potential to create emotional or psychological disturbances for a potential buyer. While this includes real things, such as a death occurring in the house, depending on what state you live in, it can also include if the property is considered haunted by spirits. Most people, whether they realize it or not, know of at least a few of these haunted house properties.

Famous psychologically impacted properties (alleged haunted houses)

Two of the most famous examples of psychologically impacted properties are 112 Ocean Avenue in Amityville ‡, New York which became famous after the publication of the best-selling book The Amityville Horror‡, and the countless number of film adaptations of the paranormal happenings that occurred within. A less known stigmatized property is 8435 Roanoke Drive‡ in St. Louis, Missouri where the events that inspired William Peter Blatty's book, The Exorcist< /a>‡, reportedly took place.A more recent incident without paranormal origins, but no less creepy, is the property known as the "Watcher House ‡", in Westfield, New Jersey. The 3,920 square foot property was originally purchased for more than $1 million. After a putting more than $100,000 worth of remodeling work into it, according to Zillo w‡, its owners sold the house for just under $960,000, allegedly due to the anonymous and often frightening letters they received. As would fit with any horror movie plot, despite the best efforts from law enforcement, including the FBI, the author of the harassing letters is still at large.

What to know about buying and selling a psychologically impacted home

As a buyer, a benefit to purchasing a house with psychological defects is the purchase price, which is typically cheaper than market rate. In fact, according to a 2001 Wright State University study, on average, psychologically impacted homes sell for approximately 3% less than comparable, non-impacted homes.

However, depending on where you live, the longer-term consequences of buying a psychologically impacted house may not be so favorable. In the same study, psychologically impacted houses, averaged 45% longer time-on-market compared to non-impacted properties. As one might suspect, information such as a history of ghostly disturbances or other issues may have the potential to create emotional or psychological hesitancy in a buyer that will likely affect their decision-particularly as they weigh how much of a discount is enough for them to accept living in a stigmatized residence.

Research and questions are your best protection

If you find yourself in possession of a haunted home, either voluntarily or involuntarily, there's not much recourse you can take against an agent or a seller, but this is largely dependent on where you live. Some states have laws that require a seller or agent to honestly disclose the history of a proper ty‡ if they are asked, but only if they are asked. Many states still operate under caveat emptor (let the buyer beware) and it's a common misconcept ion‡ that agents or sellers are liable for failing to disclose whether a property is supposedly haunted.

In fact, there are many protections in place for agents in such circumstances. More than 20 states have laws that protect agents from liability for failing to disclose details like paranormal disturbances in homes, and only a few (Iowa and Massachusetts, for example) require that information on suspected hauntings be disclosed to buyers. About half of all states have regulations or laws that address the issue of psychologically impacted properties, but the conditions of these are less paranormal in nature, typically having to do with things like diseases determined by medical evidence to be highly likely to be transmitted through occupancy, or if the home was the site of a suicide, a murder or felonious activity.

If you aren't afraid to live with beings from the spirit realm, or don't particularly mind the potentially problematic history of a property, a psychologically impacted residence can be a good way to score a deal on a home. However, it's definitely not for everyone. It's important to weigh both the pros and cons of both buying and then later selling a psychologically impacted home. Whether it's a haunted house or one with a troubled history, be sure to do your research, ask the right questions, and educate yourself on what you must disclose when it comes time to sell.

UMB personal banking solutions offer convenience and simplicity to meet all of your past, present and future financial needs. From home loans to auto financing and everything in between, see how UMB personal banking can work with you to find the right products for your life and lifestyle. Before you take the plunge into homebuying-whether a haunted house or not-review our comprehensive homebuying guide.

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