The woman was killed by her husband for being in love with Peter. The husband then killed their son, and then hung himself. Peter killed himself because he realized this and saw the dead bodies. Karen returns to the house to save Doug, but the woman kills Doug and goes to kill Karen. Karen knocks over the gas cans and lights the house on fire. At the hospital, the police bring Karen to ID the body of Doug. One of the police mention that they were able to save the house, and although Karen somehow survived the fire, she is visited by the woman one last time. We can assume that the woman kills Karen, because since the house is still standing the curse remained.