How Homicide Affects Home Values

Few people probably ever imagine living at the scene of a violent crime, but it may work out that way. You could find your dream home, only to learn it had a nightmarish past.

Should you buy a house if it was once the site of a murder or a suicide, or if somebody once died of natural causes in the walk-in closet that you’re coveting? If you are selling a house where a death occurred, should you plan on lowering the price?

It may seem like a strange question, since buyers should be far more interested in whether the foundation is solid and if the walls have good insulation. But homicide sites in particular are known as stigmatized properties — that is, a home with a negative association. If your home has had a murder, a suicide or some sort of death, or if it’s rumored to be haunted, you could actually see its value drop, according to the few studies on the subject.

Here are some things to consider if you’re looking to sell or buy a house with a criminal history or in a stigmatized neighborhood.

[Read: 12 Home Improvements That Don’t Add Value]

A Death Can Cause the Value of a Home to Drop

There isn’t a wealth of information on the topic, but a 2013 academic study showed that murders in a home brought down the value by 5.6%. And a 2021 report from Finder.com took the results of a University of Technology Sydney study and calculated that American homes lose $7.5 billion a year from property devaluation due to homicides.

Now, some people like a house with a dark and intriguing past, so you might find that a house you’re selling or buying is worth more than you think, perhaps because of the mystique around the murder. It’s good to be aware that a homicide in a home’s past might affect its value, but you shouldn’t automatically make that assumption.

Psychology Will Probably Come Into Play

“I have had many clients walk away from what otherwise would be their dream home because there was a murder in the house or a recent death,” says Jennifer Beeston, a senior vice president of mortgage lending with Guaranteed Rate Mortgage in Coral Springs, Florida. “If the fact the house had a homicide in it does not bother you and you expect to live there for 10-plus years, it can be a great opportunity to get a deal.”

But if you’re a seller, be prepared to have some buyers bow out, which is why you probably want to gently mention the history to the sellers. They may find out regardless.

“I had a client last year back out from buying a home because he found out from a neighbor that a pregnant woman had been abducted and murdered in the house. He verified with news reports and backed out immediately,” Beeston says.

[Read: How Does Selling a House As-Is Work?]

Be Prepared for Buyers to Ask for a Discount

That doesn’t mean you have to give a potential buyer a discount. Common sense suggests that you shouldn’t, if the house is otherwise everything a homeowner could ask for. But, Beeston says, “Most people expect that if you are buying a house where a murder has occurred, you will get a deal.”

Levi Rodgers is a real estate broker and founder of the VA Loan Network, a San Antonio, Texas-based company that helps military service members and families buy a home. Rodgers says it’s not uncommon to see a price drop of 15% to 20% for a home where a homicide occurred.

“I’ve sold homes where a homicide took place, and it’s a tough situation,” Rodgers says. He says being transparent about the home’s history and focusing on any renovations or improvements since the incident can help with keeping a price higher than it might otherwise be with a homicide home.

Of course, it’s probably best to not refer to the home you’re selling as a “homicide home” or “murder house.” That won’t help you when it comes to pricing.

“You’re dealing with how people feel about it, too. Most buyers get spooked, so the home often sits on the market longer and may need price cuts to attract interest,” Rodgers says.

And guess what? If you live next door to a house where somebody was murdered, your house, an innocent bystander, could lose value, too. “It’s not uncommon for homes near the scene of a violent crime to lose about 4 to 5% in value,” says Brian Quigley, the founder of Beacon Lending, a mortgage brokerage in Denver.

The average home within 0.02 miles of a homicide drops 3.2% in value, according to the Finder.com report.

That does make sense. If you were buying a house and new the next door neighbors had come to a grisly end, you might wonder about crime in the neighborhood. When that occurs, the home with the homicide isn’t only stigmatized; the entire neighborhood can become stigmatized, fair or not.

Time Heals All Wounds

First, if you’re trying to sell a house where a recent homicide took place, Quigley suggests trying to find a real estate agent who understands how to market stigmatized properties.

“Buyers do get creeped out,” Quigley says. But he notes that the stigma with a death in the home, especially with a homicide, tends to fade over time.

“If the crime was recent, waiting [to sell] might be your best option to avoid a significant loss in value,” he suggests.

He says that generally a year or two after the event, the stigma may start to somewhat fade.

[READ: What Is a Starter Home?]

If You’re Selling, Be Honest About the Home’s Past

As noted, the buyer will probably find out, anyway. If you’re upfront about it, Rodgers says, “Being honest can actually help build trust with buyers, and it shows that you’re not hiding anything.”

In some states, you’ll have to disclose if there was a death in the home, and in many, you won’t. But the laws vary across the country, and “it’s important to know and follow local regulations when disclosing death peacefully or otherwise,” says Ryan Dossey, a co-founder of SoldFast, a mortgage brokerage franchise with eleven locations, headquartered in Clive, Iowa.

As an example of how different the rules about disclosing a murder home can be, in Delaware, you aren’t required to divulge that a murder took place — unless somebody asks you in writing. (It’s hard to imagine, but apparently if somebody asks you point blank if there was a murder in the home, the seller can legally look them in the eyes, lie and say, “No, no murders here.”) In Kentucky, you don’t have to offer up that information — but if somebody verbally asks you, then you do. In California, you do have to disclose upfront any death that has occurred in the last three years, even a natural death.

But Dossey adds, three years after the death, you don’t have to say a word. “I wonder what changes on Day 1,096 to make it no longer matter,” Dossey quips.

Dossey says that if anybody is really concerned about whether somebody was murdered or died in their home, they could use a website like DiedinHouse.com. You can type in any address in the country, and you’ll learn whether somebody died in the home. Prices start at $14.99 for a single home search, but if you look at multiple homes, the price per search goes down.

“I had a home that we flipped in Indianapolis back in 2019 that was the site of a homicide in 2013,” says Dossey, who now lives in San Diego County, California.

“The property underwent a massive renovation,” including a new kitchen, bathrooms and flooring.

“During our remodel, one of the neighbors introduced himself to a subcontractor and asked if we knew what happened,” Dossey says.

That’s when Dossey learned that a 24-year-old mother had been killed by her boyfriend in the home, six years earlier.

“Indiana does not require the disclosure of death in a property, so it was a non-issue for us upon resale. The state does require that you answer honestly if asked, which I think is beyond fair,” Dossey says. He adds: “We ran into more issues with our contractors being superstitious than buyers.”

A Checklist for Selling a ‘Homicide Home’

If you are selling a home that was the site of a homicide, you’ll want to keep the following in mind:

Delay the sale. Waiting to sell for awhile will let the notoriety fade into the past, especially if the homicide didn’t make a lot of news, and you may get a better price than if you sell the home immediately.

Accept that there may be a loss in value no matter what. It really depends on the death, and how much the media covered it.

Check disclosure laws. Not every state requires you to share the details of a death in the home, but some do.

Work with somebody who specializes in stigmatized homes. A professional who has done this sort of thing before is likely to have far better guidance than someone who doesn’t have experience in this realm.

Prepare for gawkers. If this is a home that really has a dark past, members of the public may be curious.

More from U.S. News

Are Homes Getting Smaller?

Selling Your House? What If It’s a Dump?

Are You Too Young to Buy a House?

How Homicide Affects Home Values originally appeared on usnews.com

Update 11/07/24: This story was published at an earlier date and has been updated with new information.

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