California Laws on Disclosing a Crime or Death on a Property
The bottom line in these situations is that if an event occurred at a residence, including any type of notorious crime, that potentially could negatively impact the value of the property, a homeowner is wise to disclose the occurrence to a prospective buyer. Such a disclosure permits a prospective buyer the ability to make a fully informed decision.
A homeowner needs to keep in mind that there are now cases in California in which homebuyers have won financial judgments against home sellers who did not disclose a notorious event at a residence, including crimes. Courts found that although statutory law in California didn’t expressly require a disclosure, certain events are so notorious and negative that they necessarily impact the true value of a property. This potential impact of such a notorious event can result in a decrease in the value of the property.
Moneytalks News article December 5th, 2015 –
“A stigmatized property, one marked by murder or other heinous crime, typically sells at a deep discount, research shows. It could be a bargain for a buyer who doesn't mind the dark history.” According to consumer comparison website, the U.S. housing market loses $2.3 billion annually because of homicides. A murder doesn’t just affect the price of the home where it occurred, it can also lower the value of neighboring houses. In addition to taking a hit in value, stigmatized properties typically stay on the market for 45 percent longer than comparable houses, according to HGTV. – 2/10/2016
According to Randall Bell, a real estate broker who specializes in real estate damage valuation, a non-natural death in a home can drop the value 10-25%.
When it comes to selling a home where a death occurred, it's all about perception, he said. “Death can really kill your home value”
"Some circumstances are so horrific...that the property loses all value," Bell said. – A Place to Die For: Why People Buy Homes Where Brutal Murders Occurred
Even the bloodiest murder homes may appeal to buyers on a budget—the macabre residences are typically discounted by about 10% to 15%, says real estate appraiser Orell Anderson, who valued the Simpson and Ramsey residences.
If the crime involved a celebrity, or was so horrendous that it made national news night after night, that price cut could be even more—between 15% and 50%.