Posted on 09/12/2007 7:51:23 AM PDT by SmithL
ORINDA -- Many buyers would like a 3,500-square-foot home, made of redwood with a pool nestled among more than an acre of oaks in a tony enclave. The asking price of $1.5 million shouldn't scare anyone away, but knowing convicted murderer Susan Polk stabbed her husband to death in the poolhouse might.
"There are some people who couldn't care less and others that don't want anything to do with it," said Gayle Langston, a real estate agent with Alain Pinel Realtors Montclair Village in Oakland. "Then there are the others that are intrigued."
Because of the highly publicized murder, the Polk house is a "stigmatized property," or a property tainted by scandal, crime or death. But many homes are similarly affected by suicide, criminal activity or even ghosts.
James Larsen, a finance professor at Wright State University in Dayton, Ohio, reported in a 2000 study that 102 stigmatized homes sold for an average of 3 percent less than the listed price. Those stigmatized properties also sat on the market 45 percent longer.
Another of his studies on 3,200 homes sold in 2000 found that homes located within a city block of a reported sexual offender sold for 17.4 percent less. Houses located between two and three city blocks sold for 9.3 percent less.
Polk was convicted of killing her husband, Felix, in 2002 during a bitter divorce. She said her husband attacked her in their Orinda home and she stabbed him in self-defense.
She represented herself at trial, which lasted more than three months.
In the years preceding the 2006 trial, Polk retained several private attorneys. When her liquid assets dried up, she also worked with attorneys appointed by the court from the public defender's office and the county's panel of private attorneys.
When a defendant cannot afford an attorney, a judge appoints a public defender or a private attorney paid for by the county. In Polk's case, the county placed a lien on her house in August 2005 to collect reimbursement at the end of the trial if the county considered it appropriate. That lien is now $219,373.13.
Stephen Anderson, the court-appointed receiver in charge of liquidating the property, said the sale of the house will be by written bid submitted by 10 a.m. Oct. 8. The highest net offer will be confirmed on Oct. 15 with a 9 a.m. hearing by the judge. If no one overbids, the home is expected to close on Nov. 2.
"It's not that unusual," Anderson said of his job. "A lot of attorneys don't even know the process exists, but I specialize in problem properties."
Anderson, an Alamo-based retired banker specializing in real estate lending, said that half of the proceeds would go to Polk and the other half to Felix Polk's estate. The $219,373.13 will come out of Susan Polk's half of the proceeds.
Also coming out of Polk's proceeds will be Anderson's fee and the previous receiver's fee.
Both Anderson and Langston acknowledge that stigmatized properties may not fetch as high a price on the open market as less problematic homes, but both said honesty is the best policy.
"I tell people because I'm forthright and have integrity," Langston said, mentioning the murder is also in the home's written disclosure statements.
California requires disclosure of a death on the property within the past three years, but several states do not.
About 30 states reportedly have some laws on the books regarding disclosures on stigmatized properties, but it's hard to quantify, said Walt Molony, spokesman for the National Association of Realtors.
"Some of these things are kind of gray and that's part of the problem," he said. "Some places consider people who lived there who have HIV as stigmatized properties, others do not."
Only six states have no disclosures whatsoever: Alabama, Arkansas, Kansas, Vermont, West Virginia and Wyoming.
Colleen Badagliacco, president of the California Association of Realtors, said it's better for an agent to be honest than deal with a disgruntled client later.
"Some religions and cultures find a death to be a negative for the home," Badagliacco said. "I think, in any case, it's better to disclose than not disclose."
Badagliacco said although they are required to disclose a death for the past three years, she said she would continue to disclose the fact of a murder after the legal requirements expire, especially in a high-profile case.
"It's better to be safe than sorry," she said. "It's not something where it's six months past the statute so I won't say it."
Badagliacco said that she sold one home where there had been a suicide. "When I would talk to perspective purchasers ... I would let them know right up front before the disclosure," she said.
The house sold for about 5 percent to 10 percent less than the asking price, mainly because it was priced accordingly.
She said some stigmatized properties where crimes have been linked, such as a methamphetamine lab, there could be remediated chemical contamination on the property which also should be disclosed.
According to a 1999 study by a UC Berkeley dean, homes within a mile of a remediated hazardous waste site in Texas sold for significantly less than contamination-free homes even four to eight years after cleanup.
"The gravity (of the situation) is in the mind of the purchaser and to what extent it would affect them," she said. "Some will walk away and say no or greed might take over."
Barbara E. Hernandez covers real estate. Reach her at 925-952-5063 or bhernandez@bayareanewsgroup.com.
the law
Source: National Association of Realtors
Source: California Association or Realtors
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