Utah realtors give ‘murder homes’ another life
Real estate • Heinous crimes hurt market value and stagnate marketability, says study.
Published: April 21, 2014 02:21PM
Updated: April 21, 2014 02:21PM
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Kay Mortensen, courtesy BYU

Payson • When a California couple pulled up Kay Mortensen’s winding driveway, they found the for-sale sign — peppered with bullet holes — lying in the bushes.

It had been about two years since someone tied up the retired Brigham Young University professor in his Payson Canyon home and killed him.

The murder was widely publicized, and while Mortensen’s family tried to move on, there was the matter of trying to get someone to buy his house with its grisly story.

“A lot of people thought we were absolutely crazy,” said the man who pulled the sign out of the bushes, called the real estate agent and made an offer. He and his wife — private people who did not want to be named as they try to make a new life in an infamous house — knew of the home and its history through a mutual friend of a Mortenson relative. But it didn’t bother them. The house was in a beautiful location that felt secluded, yet close to town.

Two years in, the couple have made a big investment remodeling every room to give a once darkened house a new life. It can be a challenging and disheartening journey from a grim murder to a new mortgage but with a strategic sales pitch and hard work, such homes can make it.

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Stigmas and secrets • In the real estate business, there’s a name for homes that carry the shadow of a murder, suicide or similarly sordid story: stigmatized properties. The rules differ from state to state but in Utah, the seller and the broker are under no legal obligation to tell the buyer about a stigma if it has nothing to do with the home’s structure. If potential buyers ask, though, they have to tell the truth.

Angie Nelden, president of the Salt Lake Realtors Association and a Coldwell Banker real estate agent herself, always advises her clients to be upfront about whatever stigmatized the house. The National Association of Realtors suggests the same.

That doesn’t always happen, though. A Wright State University study examined 102 stigmatized homes in Ohio and found that the brokers failed to disclose the stigma to the buyer about 19 percent of the time. Sometimes, it was because the seller didn’t tell the broker.

But their silence does not keep the truth hidden.

“If [the agent] doesn’t tell you, the neighbors will,” said James Larsen, co-author of the Wright State University study. Larsen’s own father learned after the fact that he lived in the same home that Jeffrey “The Milwaukee Cannibal” Dahmer did as a child.

Several years ago, a Pennsylvania woman, her spouse and children moved into a home only to hear later from the neighbors that it was the site of a murder-suicide. As in Utah, Pennsylvania law did not require the seller or real estate agent to divulge the grim tale upfront. She sued, but the state’s Superior Court ruled to uphold the status quo.

Aaron Drussel, who sells homes in Salt Lake and Utah counties, has heard similar stories of people who only discovered a home’s history after they moved in.

“They didn’t like that everybody knew. They felt like people weren’t honest with them,” Drussel said. The couple who moved into Mortenson’s house pointed out that the real estate agent never told them about the history — though, to be fair, they already knew.

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Counting the cost • In the two years Mortenson’s home was on the market, only one person other than the California couple made an offer on the house, the couple said. And that’s no surprise: Stigmatized homes languish longer on the market. The Wright State University study found that, on average, such homes took 45 percent longer to sell than comparable properties that did not carry a stigma, and they sold for about 3 percent less.

In the event of a well-publicized murder, the notoriety can hurt a home’s value by 15 percent to 35 percent, according to an appraiser who specializes in stigmatized homes cited in the study. The appraiser — Randall Bell, who has worked on such homes as O.J. Simpson’s house, and the Heavens Gate Mansion mass suicide — says the impact may take five to seven years to wear off.

The value of Martin MacNeill’s Pleasant Grove home dropped by about $30,000 between his 2012 arrest, when it came to light he had killed his wife years before by drowning her in a bathtub, and a 2013 trial conviction, according to the online real estate database Zillow.

Matthew David Stewart’s house in Ogden, the site of his 2011 deadly shoot-out with narcotics investigators, had a market value of $115,000 before bullets riddled the walls. The home’s value has dropped 19 percent, according to Zillow.

The online database estimates that Susan Cox Powell’s home is worth 21 percent less now than when she disappeared in 2009.

Decline is not limited to the high-profile cases. When Stuart Halliday shot and killed his parents in their upper-class Salt Lake City home before killing himself in 2010, the house was worth about $937,000. Zillow’s records show a 6 percent decline since.

The declines stand in contrast to the general uptick that Utah home values have enjoyed the past two years.

And while pervasive, the stigma is not a sure nail in the home value’s coffin: After Robert and Patricia Stom died in a murder-suicide in their Ogden home around Christmas 2009, its value fell for two years before starting to bounce back in 2012.

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Death and rebirth • Realtors and buyers alike try their best to give the haunts new life. For Drussel, that includes honesty.

“We don’t go out of our way to cover up anything about the house,” he said. “The neighbors know what happened there. It’s going to come out at some time.”

But Drussel doesn’t advertise the crime on the flier, either. The strategy is to sell the home on its strengths first, then disclose the home’s past after the prospective buyer feels an emotional attachment to the house and is more serious about buying it.

Drussel compares the process to setting up a friend on a date: Rather than dumping all of the date’s baggage on the friend beforehand, let the friend get to know the date first, without bias. Then when the baggage comes up, if the friend likes the date, it’s easier to accept.

The baggage was pretty grim for Mortenson’s home: Utah County prosecutors claim two people killed the retired BYU professor the night of Nov. 16, 2009, so they could steal his guns. Mortensen, who had been tied up, was found bent over the bathtub of his Payson home with his throat slit.

“We cleared that whole place out,” Drussel said.

Besides removing all the furniture, real estate agents put in new carpets, touched up the paint and other parts of the home to make it feel new — to give it another chance.

When the California couple moved in, they completely gutted and changed every room. They put in a fireplace, tore down the early 1970s magenta wallpaper, tiled the floors, knocked out walls. They even replaced the plumbing and wiring and landscaped the yard. The couple attest that the front door and a kitchen light are the only parts of the house that are original.

But then there was the matter of the bathroom.

“[My husband] said this is the one room in the house that’s pretty decent and doesn’t need to be torn out. I’m sorry, it’s got to go, give me the sledgehammer and I did it,” the wife said. “It has a claw-foot bathtub, no shower, we even knocked out some of the walls to make it bigger.”

And the work has paid off. “It has changed the energy,” the wife said, sitting in a kitchen that feels as warm and bright as it looks. “We don’t think about [the murder].”

Like Mortensen’s home, many find a new life. Someone moved into Uta von Schwedler’s house south of the University of Utah after investigators suspect the professor’s ex-husband drowned her in the bathtub. In fact, von Schwedler’s, Powell’s, Halliday’s and MacNeill’s homes are not for sale, according to Zillow.

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Healing advice • Some owners choose to demolish a stigmatized house rather than remodel, thinking it will do more good. But they are wrong — the land holds the memories, too, Bell said. The Heavens Gate Mansion was not only destroyed — every blade of grass was torn up. It was as though the California property had never been developed. And yet people still look at the new house that stands there now as though it were the mansion where 39 cult followers committed mass suicide in 1997, Bell said.

A remodel — or a totally new house — does not hide the story from potential buyers, either. Drussel advises sellers to disclose the stigma and to form a game plan with the real estate agent on when to tell the potential buyers. Like with Mortensen’s home, Realtors also advise touching up the home to make it feel comfortable — and not look exactly as it did at the time of death.

Buyers can do homework to learn about the property, too, said Walter Molony, a National Association of Realtors spokesman. “There is so much information available online,” he said. And when the stars align and someone does move in, it not only heals the house, it can heal the neighborhood, too.

“That’s a real opportunity in a neighborhood to kind of be heroic,” said Bill Freeze, president of Utah County Association of Realtors. “You take something that’s been very negative, and obviously neighbors around you feel bad about it, and make it a fresh start for everyone — not only for you, but for your neighbors.”

When the California couple moved into Mortensen’s home, they could tell the tragedy had shaken the area. A neighbor had put up surveillance cameras.

But two years in, a neighbor kid and his friend are planning to help them move heavy furniture up the stairs. The house is filled with the sound of the couple’s pet birds. Their pack of mules mill about near the canyon road.

Life returned and has thrived.

mmcfall@sltrib.com Twitter: @mikeypanda

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