What exactly is a 'haunted house'?

To real estate agents, a haunted house is a home that has acquired a bad reputation because of murder, suicide or some other tragedy.

As a result, the property might be at the center of ghost stories or accounts of alleged paranormal activity.

Here are three things prospective buyers need to know, according to experts — including Oscar-winning actor and former haunted house owner Nicolas Cage.

1. The gory details must be disclosed

ghost trying to enter the bathroom
Ilkin Zeferli/Shutterstock
The difficulty with haunted houses is that in actual practice, buying and selling a haunted home can be a legal and financial mess.

The difficulty with haunted houses is that buying or selling one can be a legal and financial mess. In some areas, sellers are legally obligated to tell potential buyers if a home is said to be haunted, whether they ask or not.

The legal precedent for disclosing information about hauntings was set by a 1991 lawsuit that resulted in what has become known as the Ghostbusters ruling.

A seller had boasted that her house was haunted, but the buyer was not from the area and bought the house unawares. The buyer later sued and won on appeal when a New York court decided the house was, in fact, haunted.

And here's how that happened: The seller had apparently sold the story of the haunted house to Reader's Digest for $3,000 and would have had to either admit to either lying about it or agree that the house was haunted.

2. 'Killer publicity' hurts resale

ghost murderer axe concept
The hit to resale value due to reported hauntings remains true whether they’re 'genuine' or faked.

Having a reputation for hauntings tends to lower the dollar value of a home or make it nearly impossible to sell.

California real estate appraiser Randall Bell has become an expert in this and says homes stigmatized by publicity about deaths, crimes, or even scary stories consistently sell for less than comparable houses not under a dark cloud.

The hit to resale value over reported hauntings remains true whether they’re "genuine" or faked.

One Las Vegas mansion that had been damaged by fire was featured on the TV show Ghost Adventures, which claimed there was an evil spirit in the house and that a number of murders had occurred there.

In fact, this house had no proven history of murders. But because of the publicity, a number of people broke in, performed satanic rituals and vandalized the house with pentagrams.

3. It really is 'buyer beware'

haunted house
Sascha Burkard/Shutterstock
If you still really want to buy a haunted house, then you should be prepared to make some concessions.

Thanks to today's killer mortgage rates, homes are selling so quickly that buyers may feel they have no choice but to settle on properties with spooky reputations.

If you buy a "haunted" house, be prepared to make some concessions. That's what Nic Cage learned.

In 2007, the star paid $3.5 million for the LaLaurie Mansion, once owned by famed socialite and serial killer Madame LaLaurie. This mansion was known as the most severely haunted home in New Orleans.

"At any given moment, I have five or six ghosts surrounding the house, all looking up at this haunted temple, and I'm in there," the actor told the Independent.

His family wouldn't sleep in the home. How's that for a concession? Cage ended up losing the house to foreclosure in 2009.

The (dead) end to our story

haunted house side view window
I guess the takeaway here is that you can go ahead and buy a haunted house as long as you don’t mind sleeping somewhere else.

Real estate agents who specialize in selling haunted houses offer these tips to home-buyers who wouldn't want to be caught dead in one:

  • Beware of homes that seem “perfect” but are selling for noticeably less than comparable ones in the area.
  • Train yourself to let a chill run up your spine when you encounter sellers who seem very keen to part ways with a property.

If you end up accidentally buying a house with an unsavory reputation, you could find yourself paying for that mistake down the road. Then again, that recent Realtor.com survey found 56% of Americans who think their homes are haunted would not consider moving.

"Although only a small percentage (13%) of respondents indicated they believe their home is haunted, it was surprising to see how many are perfectly comfortable sharing their space with spirits from the world beyond," says Lexie Holbert, Realtor.com housing and lifestyle expert.

Want to buy your own haunted house? You probably don't need a frightfully good credit score, but having a score at least in the 700s helps. Oh, and you'll need to scare up a bunch of mortgage offers so you can compare rates and find the best one.

Be sure to comparison shop for your homeowners insurance, too, because you could score coverage at a price so low it's spooky.

About the Author

Esther Trattner

Esther Trattner

Freelance Contributor

Esther is a freelance contributor to MoneyWise.

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