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Selling a crime scene? How brokers deal with the fear factor

You don’t have to be superstitious to believe in ghosts.

Every previously occupied property has a history, and that history can have real effects on how potential buyers or tenants react to a space.

Homes that become the scene of a violent crime can suffer a value loss ranging from 15 to as much as 100 percent of the value of the home, according to Randall Bell, an appraiser who specializes in disasters.

“I call them ‘psychologically impacted spaces,’” said veteran broker Corinne Pulitzer of Douglas Elliman. “The property did not have anything to do with the tragedy that happened, but it still has an impact.”

Even taking on a listing where someone has died peacefully in their home brings in extra considerations for a real estate professional, she said, recalling one listing where she agreed to water houseplants on behalf of the seller’s late mother.

“It’s interesting, the relationship the broker has with the property, because whether it’s good or bad, you’re there,” Pulitzer said.

The Mercer Street apartment where Mark Madoff, son of the imprisoned financier Bernie Madoff, took his life two years ago is currently listed for rent at $35,000 a month, and the 7-bedroom house in the Hamptons where millionaire Ted Ammon was killed by his wife’s lover in 2001 is also available as a short- or long-term rental.

But it is possible to do deals with a property in spite of a grim past. The UES apartment where Elliman broker Linda Stein was murdered in 2007 recently sold as part of a $17.9 million package with two other apartments, which the buyer plans to convert into a single penthouse.

Some properties are notorious. 10 West 14th Street, where Joel Steinberg beat his six-year-old daughter to death in 1987, is known in some circles as “the death house,” and over 20 people are said to have died there, according to Jason Saft of CitiHabitats.

“Something feels very awkward in there,” he said. “It’s probably one of the nicest West Village blocks…. but I remember being in there with some people and they say something just doesn’t feel right.”

Even less violent misfortunes — such as divorce or a financial loss — can leave a lingering sense of uneasiness in a home.

“Sometimes spaces just feel dead,” Saft said. “As a broker, you have to find ways to change that.”

Saft takes steps that range from burning sage and airing out the apartment to repainting and redecorating to change the feel of a space.

“I’m not a crackpot thinking you burn some herbs and everything’s going to be better, but sometimes, you just need to change the energy,” he said.

Pulitzer recalled attending a candlelit exorcism one landlord held after an abusive tenant had been evicted.

She has also in the past employed professional “smudgers” who, like Saft, will burn incense and chant in a space to eradicate a negative feel.

“I think it’s just a psychological comfort level,” Pulitzer said.

Bell, of the appraisal firm Bell Anderson & Sanders LLC who is based in California, has assessed the valuation impact of disasters from earthquakes to the Heaven’s Gate massacre, a mass suicide by 39 members of an American UFO cult in California in 1997.

In general, he said, suicides do less to drive down the value of a property than a murder.

“It’s kind of in the perceptions of things. With a suicide, someone made a choice,” he said.

Also, higher-profile crimes don’t mean a greater loss of value. The home where Nicole Brown Simpson was murdered saw the same loss of value as a property Bell recently looked at in Florida, where the murder only made the regional news.

“It doesn’t matter if it’s higher profile or more of a local issue, because all that matters is the local market,” he said.

Ultimately, Bell said, it comes down to finding the right buyer and the right price.

“It’s amazing how many people will shun a property until they find out they can get a bargain,” he said.

Smaller residences can also be easier to move.

“If you have a horrible situation but it’s more of a bachelor pad, you have less of a situation than if it’s a big family estate,” Bell said. “If it’s a family-oriented property, the parents will say ‘it doesn’t bother me, but I don’t want my kids and their friends to have to deal with it,’ “ Bell said.

One of the most nightmare-inducing crime scenes in U.S. history was the apartment in a 24-unit Milwaukee building where the convicted rapist and serial killer Jeffrey Dahmer tortured, dismembered, stored and ate his victims until his arrest in 1991.

The building was left 83 percent vacant within a year of Dahmer’s arrest, according to Bell’s case study of the site. The property was purchased by a local economic development non-profit, which reportedly paid a premium of $3,000 to $4,000 per unit above market rate for the building. Today, the site is a vacant lot.

“The Dahmer situation was problematic, not only for the property, but for the neighborhood,” Bell said.

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