Further update: An important part of the court's rationale included:
From the perspective of a person in the position of plaintiff herein, a very practical problem arises with respect to the discovery of a paranormal phenomenon: "Who you gonna' call?" as a title song to the movie "Ghostbusters" asks. Applying the strict rule of caveat emptor to a contract involving a house possessed by poltergeists conjures up visions of a psychic or medium routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a contract of sale. . . . In the interest of avoiding such untenable consequences, the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent and laid quietly to rest.
The fact that a house's reputation for being haunted may not have been easily discoverable upon inspection was likely true in 1991. But is it still true today? A potential buyer need not employ Ghostbusters but may exercise a simple Google search to discover the Seller's boasts of living in a haunted hosts. Is a "Google search" a reasonable requirement to impose by law on the Buyer, rather than imposing a duty to disclose on the Seller?
Photo credit: Halloween Addict Blog