Mahoney Knows Homes: Would You Buy a Haunted House?

Everyone loves a good deal. But how far would you be willing to go to get one? 

I’m not talking about a house with creaky floorboards or a basement that gives you the creeps. I’m talking about a home with a reputation. The kind of place where neighbors whisper about strange occurrences, previous owners swear they’ve seen something and the listing agent won’t even go inside. 

Now, imagine this house checks every box. Great location, beautiful yard and priced $50,000 below comparable homes.

Are you making an offer, or running for the hills?

While I’m sure there are countless undocumented haunted house sales, there is one in particular that made its way into an American courtroom.

The Ghostbusters Ruling

In 1989, Jeffrey Stambovsky entered into a contract to purchase a beautiful Victorian home overlooking the Hudson River in Nyack, New York, for $650,000. He even put down a $32,500 deposit.

There was just one little detail he apparently hadn’t been told.

The house was haunted.

At least, that’s what the seller, Helen Ackley, had been telling people for years.

Ackley claimed that her home was occupied by several ghosts, including spirits dressed in Revolutionary War-era clothing. According to her accounts, one ghost would shake her daughter’s bed every morning to wake her for school. Another supposedly left small gifts for the family, only for them to mysteriously disappear.

Ackley wasn’t particularly shy about sharing these experiences. She had discussed the hauntings in Reader’s Digest, appeared in local newspaper articles and helped establish the home as something of a local attraction.

Unfortunately for Mr. Stambovsky, he was from New York City and had no idea his future home came with a few additional occupants.

When he learned about the home’s reputation, he attempted to cancel the purchase and recover his deposit. The seller refused, and the dispute landed in court.

Initially, the court sided with the seller. Under New York’s traditional “buyer beware” approach, the responsibility was largely on the buyer to investigate the property.

But Stambovsky appealed, and in 1991, the case reached a New York appellate court.

What happened next became one of the most entertaining legal opinions in American real estate history.

In its decision, the appellate court acknowledged that it couldn't reasonably determine whether ghosts actually existed. However, because the seller had spent years publicly claiming that the house was haunted, she couldn't suddenly deny those claims when it came time to sell.

The court famously declared:

“As a matter of law, the house is haunted.”

Yes, an actual American court legally recognized a haunted house.

The opinion was filled with supernatural humor. The judge referenced the movie Ghostbusters, questioned how a buyer could reasonably discover paranormal activity during a home inspection and joked that the seller had failed to deliver the property vacant as required by the contract.

I can only imagine calling a home inspector and asking if their standard inspection includes checking for ghosts.

Ultimately, the appellate court ruled that Stambovsky could pursue cancellation of the contract. The house was later sold to another buyer for slightly less than the original $650,000 price.

The case, Stambovsky v. Ackley, became famously known as the “Ghostbusters ruling” and is still discussed in real estate law today.

What About Tennessee?

Under Tennessee law, sellers generally aren’t required to volunteer that a property is believed to be haunted. They’re also generally not required to disclose certain events, such as a homicide or suicide, that didn’t physically affect the property.

Of course, known physical defects and other legally required disclosures are a different matter.

So technically, your dream home could come with an unexpected history that doesn’t appear anywhere on the property disclosure form.

Welcome home!

Personally, I’ve been in plenty of houses that could pass for haunted. Dark basements, mysterious noises, doors that don’t close properly and the occasional flickering light that I didn’t recall flipping the switch for…

But would I actually buy a house with a reputation for paranormal activity?

Absolutely not. I know some people are fascinated by the paranormal – as Randy Jackson famously said, “That’s gonna be a no from me, dawg.” 

Here in Kingston Springs, we’re surrounded by beautiful old homes, historic properties and more than a few stories that have been passed down through generations. I can’t help but wonder how many of those homes have a ghost story or two attached to them.

So if you’re living in one of those houses, I’d love to hear about it. Just don’t ask me to come investigate. 

Happy Halloween!