Get the Finder app 🥳

Track your credit score, free

Free

How to avoid a stigmatised property

Would you buy a house that had a dark past?

Updated

Fact checked

A stigmatised property is a property which has a negative event associated with it, such as a murder. This notoriety usually has a negative effect on the property's future value.

When you think about stigmatised properties, the Sef Gonzales home in Ryde, New South Wales, definitely comes to mind. It was the scene of a tragic triple murder.

In 2004, the property was sold to Ellen Lin and Derek Kwok. The agent failed to mention the property’s past.

When the couple picked up the local paper that week, they were shocked to find out they had bought one of the most infamous houses in Australia. After contacting the media, they were eventually given back their deposit and the agents who sold the property were fined $20,000 for failing to disclose information about the murders.

The Gonzales home has since been sold again to buyers who know about its history and law reforms put into place by the NSW government now force agents to disclose the history of a property to buyers.

Neil Jenman is the man who helped get Ellen Lin and Derek Kwok out of the sale.

Interview Time: Would you buy a murder house?

Jenman says what defines a stigmatised property can vary depending on a person and their beliefs, but there is a basic rule of thumb he follows.

In suburbs like Paddington and Balmain most homes are about 150 years old, so you can assume that in many of them people have died.

When we talk about a stigmatised property, we’re talking about one where there’s been a grisly murder, or something gruesome or horrible has happened there. - Neil Jenman.

Neil Jenman

  • Neil Jenman is a business consultant, public speaker and consumer advocate.
  • He's written a number of guides on real estate scams, property and success.
  • Neil has been in the real estate industry since the 1970s and regularly comments on property issues.

The downsides to buying a stigmatised property

Jenman estimates about 10% of people don’t care if the property they’ve bought has a stigma attached to it. But he says all property owners will care when they go on to sell the property.

For a "severe" stigma, he estimates a property loses about 10% of its value, which was exactly how much the Gonzales house lost after being resold.

After Ellen Lin and Derek Kwok had their deposit refunded and were released from the sale of the Gonzales home, reforms were introduced by the NSW Government to force agents (but not vendors) to disclose a property’s history.

Jenman says some vendors simply don’t disclose information about a property’s history and some agents pretend they don’t know even after being told by their vendor, but there are ways to find out.

How to avoid buying a stigmatised property

If you’re looking to buy a home, Jenman says you should always find out why it’s being sold.

"It could be because of a job transfer, or maybe the kids have grown up. There are legitimate reasons why and you need to find these out."

Another way he says you can avoid buying a stigmatised property is to be upfront with the seller’s agent.

"One way you can find out is by asking the seven-word question 'Is there anything else I should know?'", he says. "Say it to them very strongly and when they say no, ask them 'Are you sure?'."

If you do find something, Jenman says you have better grounds to dispute the sale with the agent.

The last safeguard is to ask other residents in the street about a property’s history.

"You should always meet the neighbours. Ask them 'What’s it like in these areas?'. They’ll always tell you".

A pre-settlement inspection can also help when trying to find out if a property has a bad stigma and is also a good way of checking what you’re paying for before settling.

Types of stigmatised properties

There are many different ways a property might have a stigma attached to it. These can include:

  • Criminal stigma. The property might have once been the scene of an illegal drug lab, brothel or other major criminal presence or event, such as a sexual assault.
  • Murder or suicide stigma. As the name implies, the property might have been the site of a murder or suicide which may be locally or even nationally known.
  • Debt stigma. This could be a property where previous occupants owed money and were pursued by debt collectors, whether legally or illegally. These debt collectors may then continue their harassment of the next occupants, mistakenly believing that their target still lives there.
  • Environmental stigma. This could include any health and safety issues related to the property, such as being in close proximity to toxic or chemical waste.
  • Phenomena stigma. This might be a property with well known claims of hauntings, ghosts or other paranormal activity.
  • Other stigmas. These could include proximity to violent or unsound neighbours or a property which has a stigma only to a select group of people.

Infamous Australian properties

The Gonzales home, North Ryde,

The old Gonzales home is the pin-up for stigmatised properties in Australia. As mentioned above the property was sold to a couple but they backed-out of the deal once they found out their new home was the site of a triple murder.
gonzales murder home

The McGurk home, Cremorne

Businessman Michael McGurk was gunned-down on the footpath in front of his Californian-style Cremorne bungalow in 2009. The property still sold in 2011.

The Lin family home, Epping

Five members of the Lin family were tragically murdered in their home in 2009. The home went on the market in March 2012, selling at auction for $766,000, quite a bit shy of the $985,000 median house price for the suburb.

Snowtown bank building, Snowtown

The Snowtown bank and adjoining house was the site of the "bodies in barrels" murders in 1999, where eight bodies were found in the vault of the property. The South Australian property sold late in 2012 after being passed in at auction months before.
snowtown bank

Selling a stigmatised property

Your property doesn't have to be the site of a murder to carry a stigma. A variety of factors can leave a stigma. A stigmatised property is defined as a property where any event has occurred that could cause religious, moral, emotional or psychological discomfort to the buyer.

If you're selling a property with a dark history you may have difficulty selling the property. But it depends on the property and finding a buyer that suits. Here are some helpful tips:

  • Be honest. If your property has played host to tragic or unseemly events, it's best to be up-front about it. Laws on disclosure vary from state to state, but there is a general duty to disclose any material facts about the property that might affect a buyer's decision. In New South Wales, this law was instituted following the Sef Gonzales case. Gonzales murdered his parents and sister in the family's North Ryde home. The property was later sold to Ellen Lin and Derek Kwok, who were not made aware of the home's history. The couple successfully recovered their deposit, and the agents who sold the house were fined $20,000.
  • Manage your expectations. If you own a stigmatised property, its history could have a material impact on its value. Consumer advocate Neil Jenman, who helped Ellen Lin and Derek Kwok get out of the sale of the Gonzales home, said a stigmatised property may see its value reduced by up to 10%. Some estimates are even more dramatic. Property valuers in a Hong Kong study agreed that a home where a murder or suicide occurred could see its value fall by 25-30%.
  • Look for the right buyer. Even if your property has a sordid past, take heart. There are buyers out there who aren't put off by a property's history. Certain types of buyers may be particularly unperturbed by stigmatised properties. You might find that developers or investors are less vexed by your property's history than owner occupiers. A good agent can talk you through the best way to market your stigmatised house and the best kind of buyers to pursue. So even if your home makes an appearance on Safe as Houses, you may still be safe as a seller.

Need a home loan? Start comparing

Data indicated here is updated regularly
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.64%
2.66%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback.
A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
2.49%
2.49%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
2.39%
2.39%
$0
$0 p.a.
60%
A very low variable rate for home buyers with 40% deposits or equity. This rate takes effect from 30 September for new and existing customers. You can get this rate if you apply today.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
2.68%
2.69%
$0
$0 p.a.
80%
$2,000 to $3,000 refinance cashback
Get a competitive variable interest rate with no application fee or ongoing fees. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.36%
$0
$395 p.a.
80%
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
homeloans.com.au Low Rate Home Loan with Offset - LVR Under 60% (Owner Occupier, P&I)
2.44%
2.46%
$0
$0 p.a.
60%
A competitive rate with no application or ongoing fee. This loan is not available for construction.
HSBC Home Value Loan - Promotional Offer (Owner Occupier P&I)
2.59%
2.60%
$0
$0 p.a.
80%
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.
Yard Variable Home Loan - LVR 80% Special (Owner Occupier, P&I)
2.39%
2.42%
$0
$0 p.a.
80%
A very low variable rate loan for home buyers with an optional offset account ($10 monthly fee). 20% deposit required.
Tic:Toc Live in 10% deposit Variable Rate - Principal & Interest
2.39%
2.40%
$0
$0 p.a.
90%
Get a very low interest rate and pay no application, settlement or valuation fees. Apply online for full approval in real time and add a 100% offset account for $10 a month.
Well Home Loans Balanced Variable - LVR 80% Special Offer (Owner occupier, P&I)
2.17%
2.20%
$250
$0 p.a.
80%
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee. This special discount rate is available for new borrowers who apply and get approved by 30 November 2020. Not available for construction purposes.
loading

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.

  • A comparison of home loans from multiple lenders.
  • Expert guidance through the entire application process.
  • Free suburb and property reports.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

Related Posts

Home Loan Offers

Important Information*
Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I (*now 2.59%, drops to 2.54% on 30 Sep)
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I (*now 2.59%, drops to 2.54% on 30 Sep)

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan. This rate will drop to 2.54% p.a on 30 September 2020 for new and existing customers. You can get this rate if you apply today.

Logo for UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate

Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.

Logo for HSBC Home Value Loan - Promotional Offer (Owner Occupier P&I)
HSBC Home Value Loan - Promotional Offer (Owner Occupier P&I)

Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.

Logo for ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)

Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site