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What Happened to the Ariel Castro House?

Ross Kenneth Urken

NEW YORK (MainStreet)—Ariel Castro, the Cleveland man charged with the kidnapping and rape of three women he held captive for a decade, committed suicide Tuesday night by hanging. Something else that was pending had been the possible sale of his house of horrors, which had been in legal purgatory as authorities considered making it available for purchase.

The house was ultimately razed starting August 7 after Castro tearfully signed the deed over to Cuyahoga County as part of his plea deal ($22,000 found in the washing machine helped to pay for the demolition).

But the question remains would you buy and live in a property that had been host to years of brutality and torture?

The Cuyahoga County Prosecutor's office had started foreclosure proceedings against Castro on May 3—even before the victims escaped on May 6. Castro had bought the house at 2207 Seymour Avenue for $12,000 on April 29, 1992, and before its destruction was valued at $36,100.

But if you can tolerate the heebie-jeebies of stigmatized properties—homes with a troubled past involving a murder or other criminal act—you could have been in for a bargain, according to Randall Bell, CEO of Bell, Anderson & Sanders, a firm specializing in real estate damage economics: a typical stigmatized property, he says, will sell 15 to 20% below market value and stay on the market three months to a year longer than normal.

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"Remarkably there are people who will live on tainted property," Bell said. "Usually the discount is an enticement for someone to buy it."

Though states may require that a real estate agent reveal whether a home has a history of termite infestation or flood damage, only about half require disclosure regarding a property's criminal past. Ohio does not require buyers to disclose whether a crime occurred on the property, but the high-profile Castro case will make it difficult to cover up the house's past from an unwitting buyer.

New York and California have among the strictest disclosure laws, with Realtors in the Golden State required to reveal any "material fact" including any deaths in a residence within the last three years (unless the cause of death was AIDS-related). Other states like Connecticut, Delaware, New Hampshire, North Dakota and Oklahoma require real estate agents to be forthcoming only if the buyer asks about deaths on the property.

There are numerous lawsuits that stem from a buyer's ignorance of a house's horrific past before he's bought the property. Reed v. King from 1983 in California is one of most famous cases of this type, where a man was unaware that a woman and her four children were murdered in a house he purchased for $76,000. The seller and his real estate agent knew about the troubled past but purposely didn't reveal this information to the buyer, who unsuccessfully tried to knock the price of the home down to $65,000 because of the crimes.

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Other sites of notorious crimes are often razed, and those that aren't face difficult market dynamics. Nicole Brown Simpson's 3,400-square-foot condo stayed on the market for two years being sold for $200,000 below the asking price, according to Ilona Bray, a Berkeley, Calif.-based lawyer and author of Nolo's Essential Guide to Buying Your First Home (NOLO, 2011) . The buyers changed the address and remodeled. Jeffrey Dahmer's Milwaukee apartment building was so stigmatized by his series of gruesome murders that the entire neighborhood's occupancy rates went from 80% to 20%. The building itself was purchased and subsequently demolished by developers.

In 2006, almost ten years after child pageant star JonBenét Ramsey's body was found in the basement of her family's Boulder, Col. mansion, it was put on the market for $1.7 million—about $300,000 less than its estimated value. It brought in only $650,000, and has passed through several owners' hands since. The Castro house could have expected a similar fate despite some advantages in its favor.

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"If it's an urban area, these crime situations have less of an impact than in suburban and rural areas," Bell said, but that the Castro house is in a city-setting in Cleveland may not have mattered.

"This crime is so outrageous that might not matter as much," he said. "A potential buyer would be turned off by that history."

There are some who try to inject some good vibes back into a place with a troublesome past. Associate Broker from Discover Arizona Real Estate's Marge Peck was working with a couple purchasing a stigmatized home where a murder took place in the home. The previous owners of this Northeast Mesa, Ariz. home were a husband and wife and the husband murdered his wife in the master bathroom.

"I was with the buyers looking at a property and we couldn't figure out why this house was priced so low," Peck said. "The buyers loved the house. It had take-your-breath-away views of the mountains."

It was a track home with a large yard, perfect for having a catch. The couple's kids were playing with neighbors when they came running to tell their parents about the property's troubled history.

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"We were shocked, and we go up to the master bedroom sat on the floor and had a conversation," Peck said. "I was honest. I couldn't live there. The wife said she felt blessed that she was getting everything she wanted in a house and this is going to make somebody in heaven happy that she was going to love the house the way she did."

--Written by Ross Kenneth Urken for MainStreet

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