Selling a home on Oahu can be difficult enough without the added concerns of notoriety, sex scandal, ghosts, or murder. Stigmatized or "psychologically impacted" houses are normally fine in every physical feature and amenity, but have some characteristic that makes them unappealing for emotional reasons.
Real estate becomes stigmatized for a variety of reasons. If a murder took place in a home or someone committed suicide in it, this can certainly decrease the interest of a buyer. Sometimes a stigmatized property actually benefits from the 'ick' factor by capitalizing on the infamy of the situation.
There are different categories of real estate stigma. For instance, if a property belonged to a drug dealer or other criminal types, then the property will suffer from the stigma of the criminal actions that occurred at that location. One issue that could come up in the case of a drug dealer's home is that a drug addict could show up at the door of the new homeowner. Disclosing a stigmatization that results from criminal activity is required.
Murders and suicides are required to be disclosed, but this doesn't always scare away potential buyers. After all, the home of Lizzie Borden was purchased and turned into a successful Bed & Breakfast business. Capitalizing on the horrific is one way to overcome this stigma.
Public stigma happens when the property becomes famous (or infamous). For example, if the exterior of a home is used in a popular television show, it can generate enough traffic as to be disrupting to the homeowner. Notoriety brought on by murder, drugs, sex scandals, etc., all fall into this category. This type of stigma must always be disclosed.
Claims of paranormal activity from haunting or sightings are not always required to be disclosed because it does not actually fall under the category of public stigma. Also, unless the house is in Amityville, it is not likely that a large sector of the population even knows about the events.
For many years, it was legal to sell a home without disclosing any of the issues or disturbances a home experienced. Allowing a prospective buyer to know the grimy details of a property could mean the home sells for less money than it is appraised for, or maybe does not sell at all. Most states now require what is called "Stigmatized Property Disclosure". Some states say that while disclosure is not required, if the buyer or their agent asks for that information specifically. The best rule of thumb is to be honest about the events that have occurred on the property, even if the sale is lost.
