8. Stigmatized Property

Stigmatized properties belong to a broad category of houses and apartments that have been the scene of a suicide, murder, cult activity and so on, or that have been associated with other misfortunes or crimes — even ghosts. In most states, buyers are responsible to spot a stigmatized property. However, if a potential buyer asks about any stigmas attached to the property, home sellers are generally better off disclosing all they know about the property. While sellers may lose the sale if they disclose it all, they could end up in court if they don’t. Regulations vary widely among states. In California, for example, state law requires disclosures of murders and suicides on the property and any death within the past three years, except in the case of AIDS-related deaths. But Tennessee, Colorado, Pennsylvania and many others have no such requirement at all.

A study of 100 stigmatized homes in 2000 indicated that stigmatized homes sold for an average of just 3% less than comparable listings but stayed on the market 45% longer. That is not always true, however. The condo where Nicole Simpson and Ron Goldman were murdered in 1994 sold for $200,000 less than the price Simpson paid for it. Some stigmatized properties have been demolished rather than put up for sale, or demolished and reappeared as a new house with a different address at the same location. But nothing compares with the danger of buying a former meth house, Nick Gromicko of InterNACHI pointed out. It makes people sick and if a later inspection finds that the house was used as a meth lab, the house is usually destroyed.

While a radon test costs about $150 and remediation costs about $1,000, Gromicko explained, a test for meth costs about $450 but could save the buyer the entire price of the house or tens of thousands of dollars in remediation costs.

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What about a crazy neighbor? The National Association of Realtors has cited a case in Texas where the sellers were forced to repurchase the house they had sold because they failed to disclose that the next-door neighbor often left her house naked and cursing loudly.

Gromicko told us that undesirable neighbors are the biggest problem for potential home buyers. Sellers are under no disclosure obligation regarding who the neighbors are or how they behave. This is one area where caveat emptor really matters.

Finally, ghosts. In a survey conducted by the National Association of Realtors, more than 60% of respondents to a survey would consider buying a haunted house. The same survey indicated that about 40% of prospective buyers for a haunted house expect to get a discount of up to 30% from the asking price.

9. Problem Drywall

Beginning in 2001 and ending in about 2009, some inexpensive drywall was imported from China and was used in the remodeling and construction of U.S. homes. Between 2004 and 2007, enough of the drywall was imported to build about 35,000 houses, according to a report in The Wall Street Journal.

Not all of the drywall is bad, however, and the tell-tale signs of the problem material are a sulfurous odor and blackening of copper, silver, and other metals from the sulfur gasses emitted by the drywall. The commonly called “Chinese drywall” has been associated with certain types of health problems.

This problem is hard to detect and can be costly to remediate. Complaints about the drywall first came from Florida, where the heat and humidity aided the sulfur emissions.

Frank Lesh of ASHI told 24/7 Wall St. that most of the Chinese drywall problems have been resolved and that most buyers were unaware of the issue.

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10. Zoning

Issues related to zoning could play a role in any house sale. If the buyer wants to build an addition or tear down a part or all of the house and build something else, zoning regulations could kill a deal if such changes are not permitted. Zoning is a local issue, and in an incorporated city there are probably at least two zones — residential and commercial — and sometimes more.

For example, a house that exceeds current zoning ordinances usually got there before the rules were written and is called non-conforming. It cannot be enlarged without getting a variance, and getting a variance is not guaranteed. And that’s not all. If the house is more than 50% destroyed by fire or some natural disaster, it cannot be replaced without a variance.

Local governments usually approve changes if the alterations do not change the footprint of the building — for example, adding a floor. Anyone buying a property anywhere should check the zoning to see what conforms and what is allowed. Many people assume they can make changes that are not permitted.

It also pays to check that fences and other improvements are inside the property line. Too often people build right to the setback lines and forget things like air conditioners that can stick out over a neighboring property.

It is also valuable for buyers to check the zoning of all surrounding properties and any variances they have received. In a rural location, for example, lack of zoning could be an issue. Just because someone has not built a pig farm next to your property does not mean they cannot do so.

Homeowner association and subdivision rules are some other regulations that homeowners need to consider. These rules are not established by government but by homeowners, and they can even include restrictions on the color you can paint your house.