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When a death occurs in your home, your last thought is real estate value. But you do need to think about whether a death may affect the value of your home if you plan to sell the property in the near future.
A death in a home or on the property can affect real estate value, depending on how recently it happened and the manner of death. Local laws dictate whether a death needs to be disclosed during real estate transactions, but potential buyers may already be aware of the situation if an incident was reported on in the media. Make a plan with your real estate agent to deal with any negative reactions during the selling process and prepare for realistic offers.
Do You Have to Disclose a Death When You Sell Property?
When you're selling a home where a death occurred, there is a good chance you do not have to disclose that information.
Most states do not consider a death to be a "material fact." Material facts are the types of information sellers are required to disclose to potential buyers during the purchase process. If you prefer to keep recent events that occurred on the property private and do not live in one of the states that require disclosure (see below), you most likely do not need to offer any information upfront.
Whether you have to disclose a death on your property depends on several factors, including:
- How recently the death occurred
- Your location and applicable state or municipal rules
- The manner of death
A home in which a previous resident passed away from natural causes is likely to be viewed differently from a location at which a murder took place. Few laws require the disclosure of a natural death.
Some states require you to disclose a death on the property in certain circumstances, including:
- Alaska (murders and suicides within the past year)
- California (any death within the past three years)
- South Dakota (murders or suicides within the past year)
Other states, such as Delaware or Georgia, require you to respond honestly to requests for information about deaths on the premises. In this case, lying could be a serious issue, just like not answering honestly about mold or water damage.
If you're getting ready to sell a house where a death occurred, make sure you understand your local laws and manage your expectations for how the knowledge of this event may affect your sale process.
How Can a Death Affect Property Value?
Non-natural deaths—such as a homicide or suicide—in a house can decrease the property's value by 10% to 25%, according to Randall Bell, an expert in real estate damage economics and valuation with Landmark Research Group LLC in Dana Point, California. Much of this value loss is down simply to buyer apprehension.
A death on the property can cause a home to be categorized as "stigmatized." According to the National Association of Realtors, a stigmatized home is one that has a negative psychological connotation but no physical damage.
Additionally, buyers may be concerned about notoriety associated with a home, particularly if it draws visits from curious strangers. Legend, rumor and journalistic interest may be a dissuading factor for some buyers looking at a home where a death occurred.
Similarly, homes that carry ongoing risks related to a death on the premises—like the site of a previous meth lab accident—may raise concerns among buyers.
What Other Factors Affect Your Home's Selling Price?
A death on the property is not the only thing that may result in it becoming "stigmatized." Other factors can include:
- Violent crime: Whether violent crime has happened in the home itself or there are high rates in the surrounding neighborhood, this can be a strong influence on selling price.
- Proximity to graveyards: Real estate site Trulia found homes near graveyards, funeral homes and mortuaries often have a lower value—up to 13.6%—even when controlling for other factors.
- Drug manufacturing: The manufacture of methamphetamine can leave toxic chemicals in the structure of the home, putting future residents at risk.
Of course, just because an unfortunate incident has taken place in a house, doesn't mean the property's value is automatically reduced. Certain features considered highly valuable can keep the value steady, including items like:
- Ideal location
- Ample square footage
- Good school district
- Modern upgrades
Maintaining desirable features of your home can help keep it appealing even in the face of an unfortunate history. Work with your real estate agent to emphasize selling points despite a death on the premises.
The Bottom Line
You may lose some value on a home with a recent death, but there are other ways to recoup costs. One way is to monitor your credit before applying for your next mortgage with a free credit report and score—and improve your score to get a better rate on your next mortgage.