How an L.A. Agent Sold a ‘Haunted’ House
October 30, 2020
The infamous Los Feliz Murder House in Los Angeles has a stigmatized past, but to real estate Nancy Sanborn, it was just another house.
Sanborn was brought on to sell what she thought was a regular old probate listing in a wealthy neighborhood in 2016. The listing came as a referral. “I did not know its history when I took it on, but everyone else did,” she says. A quick Google search showed that the property had been the scene of a grisly crime nearly 60 years before, when the troubled Dr. Harold N. Perelson killed his wife with a hammer, struck his daughter in the head, and took his own life. That was December of 1959, but rumors have continued to swirl about the home allegedly being haunted.
There was no putting a lid on the publicity surrounding this listing. The mansion drew attention as a notorious haunted attraction on the local murder mystery house tour, and Curbed dubbed it “LA’s most famous and mysterious murder house” in 2015. Some even say they’ve seen Dr. Perelson’s ghost.
“We just treated it as best we could like a normal listing,” Sanborn told HomeLight. “The murder took place in the ’50s, for goodness sake, and the rumor just stayed with the house. My obligation as an agent is to sell it for the most money possible, not to generate notoriety.”
Nevertheless, the house drew the biggest broker open caravan she’d ever seen and strange behavior from visitors with a morbid interest in the home. Sanborn carried on and listed and marketed the house like any other.
Do You Need to Disclose?
Real estate disclosure laws, which set rules for what you have to tell buyers about a home before they follow through on the deal, vary from state to state. But most states require sellers and their agents to disclose any “material defects” about a home up front in writing.
According to the National Association of Certified Home Inspectors, material defects are those that negatively impact a home’s value or could pose an unreasonable risk to the buyers’ safety. This could also include a decayed exterior that exposes a home to the elements or a shoddy roof job that lets water seep in through the cracks.
Then there are what’s called “material facts” about a home that might influence buyers’ decision to buy the house or how much they’d pay for it, such as a flood in the basement years ago.
Disclosure laws get even murkier when it comes to telling buyers about facts that only have a “psychological impact” on the home—such as a murder, suicide, or rumored hauntings—but still may be considered “material” to a buyer’s decision.
Even if your state doesn’t require disclosure, it’s not so clear-cut. Many states also require that you disclose “adverse material facts” that could impact a property’s value.
Sanborn advises taking a transparent and upfront approach in the sale of any stigmatized property to avoid help to prevent legal disputes.
“Some people won’t buy a house that has had a death in it,” says Sanborn. “No matter what the disclosures are, I think something like that has to be disclosed.”
There are few secrets in today’s internet age. Also, Sanborn says, neighbors could come by after escrow and say, “Did you hear about the murder in the house?” in a way that could have buyers consider litigation if they didn’t know.
Sanborn says there is a right way and a wrong way to disclose these issues. “This [Los Feliz] is not my only murder house,” said Sanborn, who specializes in estates and trusts. “We don’t put a sign out [saying] ‘murder took place here.’”
You may not need to advertise the history in the listing description, but the listing agent may put a note such as “call listing agent for disclosures” in the multiple listing service private remarks (visible only to agents, not the public). Then, the buyer’s agent will relay the information to their buyer clients. If the buyer makes an offer, the listing agent would put the disclosure in writing in the counteroffer to have a record of it for the buyers to sign.
Overcoming the Stigma
You’ll see a lot of articles out there about “bargain shopping” for stigmatized houses. A stigma can certainly lower a property’s value and price cuts could be anywhere between 10% and 25% from what the home would otherwise be worth. But this may surprise you: 33% of buyers would be open to living in a haunted house, and 25% would consider it, according to a 2017 survey by realtor.com®.
Don’t settle at the first sign of trouble, Sanborn urges.
“Some buyers will think that they can take advantage of the situation and make a crazy [low] offer,” she says. “They think they’ve got leverage on you. But that doesn’t mean you have to sell it to them.”
The Los Feliz Mansion closed on July 18, 2016. Public sale records show the house dropped in price from $2.75 million to its final sale price of $2.3 million between April and June 2016. The home’s current value is $4.5 million.
Portions of this story were reprinted with permission from HomeLight's Haunted House Study.
Updated: November 30, 2020