With the recent downturn in the real estate market, a haunted house could become an even harder sell. Haunted houses usually aren't explicitly described as haunted, they are typically given the more pleasant and scientific sounding term of "psychologically impacted".

Psychologically impacted doesn't just mean haunted. It is a real estate term used to describe any house that will be considered a hard sale due to a death, murder, drug lab, suicide, or even if the person who lived there had a long history of violent mental illness. People are superstitious, and these houses are 50% more likely to stay on the market and sell for a reduced price than other real estate; even if no unexplained phenomenon has ever been reported.

All states require that psychologically impacted property must be disclosed during the viewing, but not all states require that you must disclose a haunting. Houses which were former drug labs, which might possibly still contain chemical residue, must be disclosed under these laws, but other states have different guidelines as to disclosing the stigma of death unless it was caused by AIDS, which could be viewed as discriminatory.

Secrecy only feeds fear, so most reputable real estate agencies ask that sellers disclose any strange happenings up front to potential buyers. In New York, it is illegal to sell a haunted house without disclosure, so you could end up with a large liability if you don't know the laws for your state.

Precedent was set by a now famous case in the real estate world wherein the sale of a Victorian mansion was contested after the Stambovsky family made an earnest payment of $32,500 on a $650,000 home which resembled the TV home of the Munsters. Even though the house was decidedly spooky at first sight, the couple did not know about its truly weird reputation. The seller had promoted the home as haunted and had even had a write up done on it for Reader's Digest and featured it on a haunted walking tour of the city. When the sellers chose to sell the house they stopped promoting it as haunted.

While the Mr. Stambovsky was not particularly worried about the homes reputation, his wife was deeply concerned, and the couple tried to back out of the deal. The owner refused to cancel the sale or return the down payment. The Stambovsky's took the seller to court and lost, only to win with a narrow margin or 3-2 in appellate court, after the court found that by deliberately fostering the belief that the house was haunted, the buyer had to by law disclose.

Why hadn't the couple known about the houses reputation if it had been featured in so many haunted tours and books? They were from out of town.

Most haunted houses on the market have very little in the way of strange events. More than likely, it is limited to electrical goings on, or the occasional door opening and closing by itself, possibly even cold spots that do not warm up even if a heater is placed nearby. Due to this, they do not have the"psychologically impacted" status, and many buyers find themselves sharing their house with a ghost.

To find out the disclosure laws for psychologically impacted property in your sate, visit the Haunted Real Estate.