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Where taint is as fresh as the paint

Homes with notorious pedigrees can be a headache for sales agents and a bargain for buyers, but not always.

September 03, 2006|Mary Umberger | Chicago Tribune

There it sits, without embellishment, on 749 15th St. in Boulder, Colo.

The eventual buyer of this $1.7-million Tudor-style manse will get a lovely mountain view -- that is, if he or she could see past the hordes of TV reporters milling about the lawn. This is the house where JonBenet Ramsey was slain in 1996, and in recent weeks the place became a media zoo again.

There has been no one to shoo away the reporters because the now-famous home is unoccupied. The house has been sold a couple of times since the Ramseys moved to Atlanta in 1997. The current owners, who have moved to California, bought it in 2004 for about $1 million, according to local media reports. The Ramsey house, which is probably what it always will be called, is what's known in the real estate business as a "stigmatized property," one tainted by a wide variety of episodes, such as mere scandal, grisly murder or occupation by poltergeists.

It's a tricky area in real estate law, because a stigma is psychological and difficult to assess, compared with a material defect such as the presence of asbestos or a flooded basement.

Some states require sellers to disclose certain stigmas, such as murder, that have occurred on the property. Under Illinois law, the seller's real estate agent has no obligation to divulge such a crime, according to the National Assn. of Realtors. But if the seller or an agent were asked a direct question, he or she would be required to answer truthfully.

Until the recent uproar over John Mark Karr's confession that he had killed JonBenet -- later refuted when his DNA didn't match evidence -- the Ramsey house probably was well on its way to overcoming its taint, according to Randall Bell, a California appraiser who specializes in stigmatized properties.

Although much of his work is related to natural and environmental disasters -- he's focusing on Hurricane Katrina now -- he has appraised many notorious crime scenes, such as the condominium where Nicole Brown Simpson and Ron Goldman were killed in 1994 and the compound in Rancho Santa Fe, Calif., where 39 members of the Heaven's Gate cult committed suicide in 1997. He also appraised the Ramsey home when the couple was preparing to sell it and move to Atlanta.

"Typically, crime-scene stigma lasts a minimum of two years, or as many as five to seven years," Bell said. "Then it's pretty much forgotten about," at least insofar as the crime affecting a house's value.

A 2000 study by a professor of finance at Wright State University in Ohio found that stigmatized properties do sell for less, though not by a lot. Typically they fetch 3% less than comps, according to James Larsen, who conducted the study. But they do take about 45% longer to sell, he concluded.

The "be patient" message should be of some comfort to Gerry Roberts, who bought the former home of Scott and Laci Peterson in Modesto. Laci Peterson suffered a violent death in 2002 and her husband is now on death row, convicted of killing her and their unborn child. Though law enforcement authorities contend that the murder occurred in the home, the crime's location wasn't proved.

Roberts bought the house for $390,000 in 2005. He told the Modesto Bee that he no longer can afford the house and listed it for $479,900 in July. He quickly lowered the asking price by $30,000 and this month he put it on EBay, where his ad described it as "a great family home."

He also plainly identified it as the home of the Petersons, which caused EBay to yank the auction listing until all references to the couple were removed. The auction came and went with 178 viewings but no bids. Appraisers who specialize in stigmatized properties say that wounds to a home's reputation do fade, particularly in California, where the relatively transient population translates into neighborhood turnover that speeds the process.

Of course, that depends on how the owner plays it: Roberts' real estate agent told a reporter that he felt obliged to disclose the Peterson connection in the ad. Roberts, on the other hand, said he hoped the notoriety would make the house more marketable.

Sometimes, that can be true. Consider the Victorian residence in Fall River, Mass., where Lizzie Borden was notoriously accused (and acquitted) of taking an ax to her father and stepmother in 1892.

The current owners have turned the place into a bed-and-breakfast inn, where guests pay to sleep where the crimes occurred. And, to make your Lizzie Borden experience complete, there's a gift shop where you can buy a Lizzie Borden bobblehead or a key ring adorned with a little silver hatchet.

Did someone say "stigma"?

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