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Does a “Haunting” Reduce a Home’s Value?

Emily Cahill
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Quick Answer

Houses with a haunting reputation may be available at lower prices. Some stigmatized properties associated with dark histories may be available for 10% to 25% less than typical market value, meaning spooky homes could make for real estate steals.

<p> Would an inheritance change your retirement plans? Chances are, it would. Inheriting a significant sum of money or a <a href=large asset like a home could add thousands—even millions—to your retirement portfolio.

But should an expected inheritance become the basis for your retirement planning? The answer to this question is murkier. The average inheritance is $46,200, according to the Federal Reserve. While $46,200 would be a welcome addition to anyone’s retirement fund, it probably wouldn’t generate a comfortable retirement all on its own, especially if you receive it later in life. Moreover, plenty of variables can stand between you and an expected inheritance. Even if you’re anticipating an inheritance, you shouldn’t rely on it solely in your retirement planning. Here’s why.

Should Inheritance Factor Into Your Retirement Plan?

Receiving an inheritance can boost your retirement savings and even change the course of your retirement, depending on how much money is involved. Contributing money you inherit to a retirement fund (or an investment account earmarked for that purpose) can be a smart use for inherited wealth. However, there are good reasons why an expected inheritance shouldn’t replace your retirement plan—or become the basis for it.

Inheritance is unpredictable. Your loved one may live a long time. Along the way, they may spend their hard-earned money on travel, life experiences, homes or cars. They may require medical care or assistance with daily living that depletes their savings. They may marry or remarry, survive a natural disaster, donate to charity, lose their investment gains—the list of possible surprises is long.

Knowing if and when you might receive an inheritance can be difficult, if not impossible. Meanwhile, there’s no good way to rush someone into passing along their wealth.

Whether you hope to retire young or plan to work well into your golden years, you almost certainly want control over when you quit working. The way to maintain this control is to make your own retirement plan. You can always use inherited funds to augment your retirement savings—or buy a home, establish an emergency fund, start a business or pay off debt—when and if you come into the money.

How to Consider Inheritance in Retirement Planning

If you can, try not to count on inheritance as part of your retirement plan. Save up to take care of your basic needs in retirement and think of inherited wealth as a bonus. Meanwhile, here are a few ideas to help you consider an inheritance as part of your retirement planning without relying on it exclusively.

  • Learn what you can. Some grantors are open about what they plan to do with their money when they pass. If this is the case, consider asking–tactfully–about their plans. Adult children may also want to open a discussion with their aging parents about where their assets are in case they need to be accessed in an emergency.
  • Find a role for inherited assets. While you may not want to make an inheritance the centerpiece of your retirement plan, you can envision a role for any money or assets you expect to inherit. For example, consider planning to use inherited money to travel with your family, pay off what’s left of your mortgage or shore up your savings.
  • Talk to a financial advisor. A trusted advisor can help you work out a retirement plan that doesn’t rely on your inheritance. They can also advise you on how best to deploy any assets you do inherit.
  • Consider taxes and probate. The first $12.06 million of a deceased person’s estate passes tax-free. After that, federal estate taxes apply; state estate taxes may also factor in. If the estate goes through probate, court costs and probate fees can eat into your inheritance.
  • Know the rules for inheriting retirement funds. Special rules may apply if you inherit retirement funds. For example, an inherited IRA may need to be depleted within 10 years. Also be mindful of annual contribution limits when transferring any non-retirement assets you inherit to retirement accounts: This could be a multiyear process.

3 Key Ways to Plan for Retirement

In the meantime, there’s a strong case for building an independent plan for your retirement. Your retirement won’t be contingent on someone else’s life and finances. You can take advantage of tax incentives for retirement savings that allow you to grow your money tax-deferred or tax-free. And if you start early, regular contributions should be manageable. Here are a few basics:

Take Advantage of Tax-Advantaged Accounts

Retirement accounts offer tax benefits that can reduce your taxable income, allow your money to grow tax-deferred or tax-free, let you withdraw funds in retirement tax-free and help your retirement dollars go farther.

  • Consider maximizing your contribution to an employer-based 401(k) or 403(b) plan, especially if you’re eligible for matching dollars. Employer matching is an immediate return on your investment.
  • Contribute up to $6,000 a year ($7,000 if you’re 50 and older) to a traditional or Roth IRA. Traditional IRA contributions reduce your taxable income. Earnings and qualified withdrawals from a Roth IRA are tax-free.

Start Early

The earlier you start, the more time your money has to compound and grow—and the less you may need to contribute per month or per paycheck. If you contribute $300 monthly starting at age 25 and get an average return of 7%, you’ll have more than $900,000 when you retire.

Set Goals

Check out savings milestones by age and calibrate your retirement savings to meet them. One frequently cited guideline suggests saving a year’s salary by age 30 and 10 years’ salary by age 67.

The Bottom Line

Receiving an inheritance can make your financial life easier, including saving for your retirement. But unpredictability makes planning on an inheritance potentially risky. If you can, keep your retirement planning and expectations for inherited money separate. Make an independent plan for funding your retirement and plan to use inherited assets to supplement it.

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You've heard that living with roommates can help you save money. But you probably haven't thought of picking ghosts for roommates as a housing affordability strategy. Turns out, buying a "haunted" house could be a strategy to save on real estate.

While it's hard to get precise numbers on how many homes in the United States are believed to be haunted, a 2020 Realtor.com survey found that 13% of respondents said they believed their home was haunted. So your chances of coming across a haunted house while shopping for a home may be higher than you think. But are you brave enough to snag one in the hopes of saving some money?

What Is a Haunted House, Legally?

When it comes to a legal definition of "haunted," it doesn't matter whether you believe a house is haunted—it matters whether the home has a reputation among the general public as being haunted.

The legal precedent for declaring a house haunted was set in 1991 by a case called Stambovsky v. Ackley. Helen Ackley had previously publicized her house as haunted before she sold it to Jeffrey Stambovsky. However, Stambovsky was not fully aware of this at the time he made his down payment.

The New York Supreme Court ruled that sellers must disclose that the house was publicly considered haunted. The court case focused on the reputation of a home. Some buyers, like Stambovsky, may not want a home with a spooky reputation.

Four states have specific rules about the disclosure of an alleged haunting at a property for sale:

  • New York: Sellers must inform buyers if sellers have built up the haunted reputation of a property.
  • New Jersey: If a buyer asks if a home is haunted, sellers must respond truthfully.
  • Massachusetts: Paranormal activity is a factor that does not need to be disclosed.
  • Minnesota: Paranormal activity does not need to be disclosed.

Whether or not your state explicitly states how a haunted house must be dealt with in property sales, you could stand to save money if you're willing to live in a home considered haunted. But should you make an offer?

Can I Save Money Buying a Haunted House?

Houses known for hauntings may fetch lower prices. Like homes where someone has died, homes with a reported haunting may be stigmatized properties.

If the reported haunting stems from a non-natural death on the property, such as a murder, the value could drop 10% to 25%, according to Randell Bell of Landmark Research Group. And many buyers—about 40%—would expect a discount on a haunted house, according to a survey by Realtor.com.

Some—about 35%—would accept the haunted house if it was in a desirable location. Another 32% would choose a haunted house if it was bigger, or—for 29%—had more bedrooms specifically.

Overall, buyers expect to get more bang for their buck on stigmatized properties, and prices may reflect that. You could save money shopping for a haunted house—if you're brave enough to live with the consequences.

Less Spooky Ways to Save on Real Estate

In a tight market, buyers may want to consider any angle that can get them a reduction in home price, including buying a haunted property. But there are other less paranormal options to look for when you're trying to save on a house:

  • Reduce your required square footage. Dropping the square footage you expect in a home by even 300 square feet can save you thousands of dollars. Look for homes with smaller square footage but flexible, organized floor plans that make the most use of the space available or may be conducive to a future addition.
  • Add to your commute. Moving a little further from the city can help you save on property costs.
  • Check local tax mill rates. Local property taxes can vary from town to town. Even moving down the road could save you thousands in housing costs.
  • Get your contractor hat on. Buying a fixer-upper is a well-known way to save money on a house. But they come with the big caveat that you need to have practical skills or knowledge to carry out some DIY renovations. Or you need to have extra funds to pay a contractor to renovate—as long as you still come out further ahead than you would have if you paid for a move-in-ready house.

Real estate purchases can feel overwhelming. But there are ways to save money even in a difficult market and find a home you love—with or without the ghostly roomies.

Could Your Credit Score Use Some Supernatural Assistance?

Your credit score can be a major asset when it comes to finding an affordable home. Don't forget to improve your credit score to get the best odds of approval and rates on your mortgage when house shopping. A few strategies that can have a positive impact on your credit include:

When you sign up for Experian Boost, you get credit for your on-time utility and video streaming bills, as well as possibly your rent. You could see your score boosted in minutes, getting you that much closer to ideal mortgage loan rates and a more affordable home.

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