As the eve of Halloween swiftly approaches, even a topic as benign and deceptively tame as property can hide an uncomfortable chill. Homeowners, especially those who live in houses bought from the secondary market, may not know the history of their houses. Perhaps, the bricks and foundations that prop the roof on one’s head may hide a grim secret.

While it is not that unusual to find a property that is below market value, one that is dirt cheap might trigger an internal alarm. Many property buyers are wary that houses going for well below the market rate could be haunted.

According to the US-based Realtor Magazine, haunted properties fall under the category of “stigmatised properties.” In this sense, the real estate is not defective in any physical manner, but due to psychological and emotional factors, may have a reduced value. Stigmatisation may occur due to the property being a place of suicide, murder, or claimed by locals to be haunted.

The question, however, is how do we leverage on the lower price while avoiding the negativity that surrounds a stigmatised property?

 “Personally I will not buy any property which is haunted. However I may not represent the vote of the entire population in Klang Valley,” said Savills Malaysia Sdn Bhd managing director Datuk Paul Khong.

Khong said that in many occasions, stigmatised properties may have very attractive prices and will attract some buyers after long periods of marketing.

He said these haunted properties were usually empty for long periods of time and were abandoned after some tragic event or similar history. 

“Valuations of residential properties near graveyards are generally highly discounted and therefore at a good price, and there are always special buyers as takers,” he said. The risk is still there, irrespective.

Precedent can be taken from the allegedly haunted bungalow along Jalan Turi, Bangsar where the entire family was murdered. Valuers tend to be conservative, and they rather err on the lower side when valuing such properties. “Usually, such buildings will attract no value, plus additional demolition costs to be included, and the land price will also be discounted by more than 40%,” stressed Khong.

Khong advised buyers of such properties to demolish such buildings and let the land rest for a few years before embarking on new redevelopments.

Tan said he might consider a stigmatised property if it is sited at a good neighbourhood and selling at below 40% the market value.

To the superstitious buyers, Kopiandproperty.com executive editor Charles Tan suggested the service of a medium to conduct an exorcism exercise. Once the spiritual cleansing has been performed, Tan said the property could be sold at perhaps 15 to 20% below the market price, and potential buyers should be informed about the exorcism.

Astute entrepreneurs have also attempted to nullify the psychological tag attributed to a haunted house by turning it into a house of worship instead. Others may refurbish it into a miniature museum or place for cultural exhibition.

“Again, everything depends on the price. If it is too much hassle, I will pass it off,” he said. From a personal point of view, Tan stressed that he would consider such stigmatised properties for investment purposes only, and not for own stay.