The best hauntings become part of popular culture. The Keg Mansion, the Etobicoke Poltergeist, The Guild Inn... these are Toronto stories that have been committed to legend. Surely notoriety of this type would raise the profile and in turn, the value of a property, but what about your local haunted house... The one on the corner that the neighbourhood kids whisper about in bated breath as they walk by? How does gossip ultimately affect what that home is worth?
Unsurprisingly, there isn't much data surrounding this topic. Similar to alien abductions and dimensional portals, there just aren't enough hard facts for us Realtors to base our comps on.
Let's gather what we know.
"Haunted" houses and their ilk generally fall under stigmatized property laws. Among other things, laws such as these cover homes where notorious crimes, violent murders, or suicides have occurred. According to RECO, "a 'stigma' is a non-physical, intangible attribute of a property that may elicit a psychological or emotional response on the part of a potential buyer." In our opinion, rumours of a home being haunted would fall under this category. The issue here is that these rumours may completely turn off one buyer while eliciting interest or indifference from another.
What follows is a quote from another article on the subject:
"In 1989, a man purchased a large Victorian house in Nyack, NY, before learning about local stories of Revolution-era ghosts inhabiting the place. He demanded to be released from the contract, as the realtor hadn’t disclosed the house’s reputation for being haunted. The buyer noted that he didn’t himself believe in ghosts, but was concerned about the effect on the property value.
The case eventually went to trial and later on to an appeal. In 1991, in a joke-laced ruling that quoted Ghostbusters, the appellate court agreed with the purchaser: As the house had been “possessed by poltergeists,” it couldn’t be said to be unoccupied. Real estate law in the state changed briefly as a result, requiring disclosure of a house’s haunted nature.”
So clearly, this can harm the value, so much so that contractually obligated parties can free themselves from responsibility. What's to stop someone from spreading rumours at your Open House to try and get a discount? Nothing really. But without even anecdotal evidence, they'd more than likely find themselves S.O.L.
I know what you're thinking. Show me a chart that shows the correlation between property value and proximity to haunted homes or areas.
HERE YOU GO!
Now, what's this telling us?
Honestly, not a lot. There's a little variation here that suggests some people would prefer a haunted house, with the average increasing by over 30% in some areas. Still, the majority of folks would rather avoid the situation altogether. For some, it's not a question of belief, but the consideration that an investment with an impediment to liquidity, even a minor one, is a worse investment than one without one.
As a Realtor, the best advice I can give to Sellers is always be honest. If the neighbourhood knows, your potential buyers may someday too. If your deal falls apart well into closing, then everyone's time will have been wasted. Why risk it? You're better off informing potential buyers in advance so that no one can claim they didn't know.
And for Buyers! Maybe you don't believe in Poltergeists, but do you want to chance the possibility that the next time you scramble to the bathroom in the middle of the night to relieve yourself, you find something staring back at you from the dark? 👻
For some extra curricular reading check out this article on Toronto’s most haunted buildings.