Buyers, whether first time or not, may occasionally hear a real estate person talking about a house with a stigma or a stigmatized house. What’s that all about?
A stigma may be a real or imagined cause for concern about a particular house and it usually impacts the house’s perceived value in a negative way.
Examples of real stigma include things like the discovery of extensive or dangerous mold in a home. All houses have some mold in them somewhere, even if it’s just common mildew (which is a form of mold) in the corners of a shower or tub. Some homes, usually those that have experienced water intrusion and damage may have mold in the attic or walls. Molds need moisture and water in order to grow and something to eat. Mold loves to grow and feed on wood and drywall, so if a roof leak allows water to seep in mold will usually be found on the wood or drywall that it dampens. When that happens the house may be stigmatized as a “mold house”, even if the original problem has been resolved. The stigma of mold stays with it.
Sometimes there doesn’t even have to be a leak for mold to take hold. Many modern houses are actually too well sealed, so that air can’t flow to dry out the normal moisture that might flow through the ceiling from baths or kitchens and get up into the attic. If the attic isn’t properly vented mold might result. A common cause is a builder (or a DIY homeowner) taking a short cut with the bathroom vent and dumping it out into the attic, instead of venting it to the outside as code requires. It doesn’t take too long before the moisture from a well-used bathroom to accumulate in the attic and support the growth of mold.
One subdivision in this area had a builder of some of the homes in the development who did not properly install soffit vents, resulting in several homes developing mold. Those homes all developed mold and the resulting brouhaha and lawsuits caused the entire development to become stigmatized as “that mold subdivision.” Sellers in houses that were not built by the same builder lost value in their homes, too, because the entire sub was stigmatized.
Another example of a real stigma (whether fairly applied or not) includes homes that are in areas that may have flooded in a big storm or whose basements had sewer backups and flooding. Even though the event that caused this flooding may have been “a hundred year storm”, those houses will carry the stigma of being “flood houses” for long time. In our area extensive flooding of basements was experienced during lasts years big 3-day rains, but you can also relate it to the hurricane flooding in New York or in New Orleans. Houses that flooded in those areas will forever be known as flood houses.
There are also numerous examples of entire neighborhoods being stigmatized by the discovery of hazardous waste materials in the air or the ground that they are built upon. Those homes are normally in areas close to heavy industrial activity and issue such as particulates from smoke stacks are very real and can be serious health hazards. Currently a very real problem and stigma is also associated with “meth houses”, houses that a criminal used as a Methamphetamine lab. Many of those houses become so toxic and dangerous from the meth manufacturing process that they have to be torn down. That is a stigma what is a stigma.
An example of an imagined stigma might be a house that someone died in, especially those in which the victim was murdered or committed suicide. Many would-be buyers will not even consider going into those houses and their value is most often impacted negatively. Sometimes the rumors that cause the stigma are just about someone notorious who lived in the house or visited it often. The stigma that I mentioned above for the homes in the neighborhood with the mold issues was also an imagined one – a stigma by association. In some cultures the positioning of the house or the entrance may inadvertently impose an imagined stigma (think Chinese buyers and bad Feng Shui).
So, what should you do if you are told that the house you are interested in is stigmatized? For one, make sure that whoever is telling you this isn’t just passing on rumors. Second consider whether the so-called stigma is a real one or imagined. Either way there is likely to be an impact on the value, which may be good for you as a buyer; but, which eventually may resurface to haunt you when you try to sell. By the way, stories about the house being haunted are another example of an imagined stigma, and it can go either way as far as impacting the value. Some people would be scared off and some would love to live in a haunted house.
For stigmas rooted in something real, like flooding or even mold, the important thing is to understand what was done to remediate the problem (some homeowners who experienced basement flooding from the sewer system put backflow preventers in their basement drains, so that should not occur again there. Some stigmas, like living in a recognized flood plain, are just risks that you have to weight (along with the cost of flood insurance) is you still want to live there. Environmental issues, like mold or Radon can be remediated and the property rendered completely safe. The issue that you’ll have to weight then is the residual value impact of the stigma that was valid at one time.
Unfortunately stigmas, whether real or imagined, seem to have a life of their own and they never completely go away. If you buy a stigmatized property, just be prepared to deal with that stigma and its impact on your sale price when it is time for you to sell.
