What is a stigmatised home

In real estate, a stigmatised home refers to a property that may not appeal to the general market because of an unsavoury event that occurred there.

An example of this occurred Sydney a few years back, when a home that was the scene of a grisly murder was sold.

This property became the subject of national attention and court proceedings when the buyers learnt to their horror that their new home was the site of a gruesome murder.

In these situations, what are the obligations of the agent in advising the potential buyers about the history of the property?

Selling a stigmatised home

Agents who list a property that may carry a negative stigma are obliged to be transparent with potential clients. If they know the house has been stigmatised they must inform the buyer prior to a sale or leasing contract.

The issue of stigmatisation does not need to be noted in the marketing for the property. It only needs to be raised with clients if a deal is to be struck.

As a buyer, you’re entitled to ask and there is an obligation for agents to make reasonable enquiries. There are no specific government guidelines, rules or laws on this issue and agents are acting on a case-by-case basis using their own judgement.

Certainly the agent cannot mislead as to the true nature of the stigmatisation. This is where the real estate agent in Sydney came into trouble.

What about future transactions?

As time passes stigmas can fade, but agents are still required to use their judgement.

While there are no rules or guidelines to address length of time, the general feeling is that stigmatisation probably applies to more recent events.

If you are concerned about the history of a property you are interested in, technology is on your side. In today’s highly evolved internet and social media age, a simple search of a property address is likely to inform you of any unsavoury event you should be aware of.