Halloween Special: The Horror House

October 27, 2014 Sam Saggers

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Halloween Special: The Horror House

We don’t often think of homes as having a “reputation”, but they do.

Consider, for example, the home at 6 Collins Street, North Ryde.

The former home of Sef Gonzales and his father, Teddy, mother, Mary, and sister, Clodine, was the subject of litigation in 2005 after a Buddhist couple – prospective buyers – learned of Sef’s brutal attack on his family.

The result of said litigation led to fines being levied against the agent for not disclosing the home’s history (reputation) to their clients.

Another buyer – who was told of the murders – was able to snap up the property for $80,000 less than it was initially listed for.

Did the home’s reputation lead to a lower value?

It certainly seems to be the case as there is nothing to indicate any other reason for the loss in value.

Property and Emotions

As property investors, we realise that emotions cannot play a part in our decision to purchase real estate. We focus on the numbers, asking ourselves will I make a profit if I buy?

That said, there are situations where we do want to pay attention to the emotional side of real estate:


When we want to sell a home we do our best to appeal to the emotions of prospective buyers. We want them to fall in love with the home so we pay attention to aesthetics; pleasing colours, lighting, even smell can play a part in our sales strategy.


Another emotional situation we must consider would be when purchasing a home that has a “reputation”.

Emotions and Property Values

Described as the “Appraiser of Doom” and the “Master of Disaster”, famous appraiser and consultant Randall Bell, has valued thousands of properties with bad or evil “reputations”.

Unfortunately, at least from a human perspective, business has been good.

The problem surrounding murder and/or suicide houses stems from individuals’ perception of the events that took place in them, not the property in and of itself.

Says Bell, “Stigma is intangible, but it’s very real. It’s been recorded over and over again. You can bulldoze the property, but the stigma attaches to the land.”

Bell maintains that a homicide in a home can extend the time it takes to sell by 3 months to 2 years and the price can be slashed by 15 to 25%.

Most individuals, however, understand if someone dies in a home due to natural causes. It’s the suicides and homicides that give people pause.

Add money and celebrity to the mix and you’ve got a big impact to a property’s worth according to Bell. Some examples:

  • Nicole Brown Simpson’s family were unable to sell the home where she and O.J. lived for two years when it should have taken only two months. They also reduced the price by $70,000 to make the sale.
  • The investor who rented out the Heaven’s Gate mansion (where 39 cult members took their own lives) had to return the home to the bank. The home was bulldozed by the new owners and a new home built in its place.
  • The Jose and Kitty Menendez mansion, scene of their gruesome murders by sons, Lyle and Erik, took more than 2 years to sell when similar homes were selling in 6 months to a year. It also sold 25% below market value at $3 million.

Dealing With The Stigma

Simply destroying a structure – such as the McDonald’s franchise in San Ysidro where James Huberty took the lives of 21 people in 1984, doesn’t immediately remove the stigma surrounding a property’s reputation.

It takes time.

According to Bell, it can take as many as five to seven years for the stigma to fade.

He advises owners of these unfortunate properties to rent them out and wait until memories of the events dim and then try to sell.

This can take longer in more rural locations, however in urban environments a good discount will often encourage a buyer to make an offer.

Finding Opportunity

So what should you, as a property investor, do when you’ve got the opportunity to buy a property that has been the location of a violent death?

It depends.

Know what you plan to do with the property. If you want to renovate and then flip the property you might be disappointed in your returns.

If, however, you plan to hold onto the property for some time, you are likely to make a profit if the market is good and a good bit of time has passed since the incident took place.

While you very likely can make a profit when purchasing a “house of horrors”, you can also sometimes profit as a seller too.

For example, the apartment house where famed cannibalistic killer Jeffrey Dahmer ended 17 lives was purchased for a premium price. A redevelopment group had to revitalise the neighbourhood, so they purchased the property and tore it down.

“That’s an example where someone profited from a horrible crime scene,” said Bell. “That’s the exception to the rule, but it can happen. It did happen.”

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