It’s no secret that this real estate market is very difficult for sellers. Home prices are lower than they’ve been since 1990, and prices are still falling. Therefore, many homeowners are “holding on” – deciding not to sell in this strong buyer’s market. Those who are selling generally fall into one of two categories: (1) those who have to sell (sellers who can no longer pay the mortgage or they are relocating a new city) or (2) those who want to move “up” and figure they’ll make up what they lose in selling their current home by getting a great deal on the move-up home.
And then there are divorcing couples. Multiply the stress of divorce with the current economy and tough house-selling environment, and it adds up to a very difficult time. Sometimes divorcing couples fall into category (1) – but oftentimes they don’t have to sell, but they want to sell in order to move on with their lives. The house is often one of the largest, if not the largest, marital asset. If one party decides to buy the other out, the party who is being bought out is getting short shrift – the current appraised value is certain to be low compared to what the home was worth before the 2008 housing crash – and also low compared to what the home WILL be worth when the housing market recovers.
In a relocation situation, Realtors often recommend that a seller consider renting out the home in lieu of selling, at least until the market improves. Divorcing couples generally do not wish to explore that option, and of course it is often not in the divorcing couples’ best interest for the parties to continue to have to deal with one another in finding a tenant, maintaining the home, etc. The divorcing party’s desire usually is to make a clean break and start a new life. So, for divorcing couples who decide that they must sell together in order to fairly divide the marital housing asset, here are some thoughts and guidelines to make the process easier:
IF POSSIBLE, BOTH PARTIES SHOULD VACATE THE HOUSE. Key to selling a home is making it as accessible as possible for agents and their buyers. If your home cannot be shown, it won’t be sold. If one or both parties are living there, it’s more difficult to show and since the two divorcing parties are often not speaking with one another, it makes it even harder to arrange showings. It only makes sense that it is not a good idea for both parties to live in the house while it is being marketed and sold. There is already enough stress in the relationship.
BEWARE THE “DIVORCE HOUSE” LOOK. If only one member of the couple is living in the house, the home tends to look barren and sad with half the furniture gone. Agents can tell when it’s a divorce house, and buyers can too. Since purchasing a home is often an emotional decision, a half-empty house is a big turnoff, even though much of the prejudice may be subliminal. Buyers may not know WHY, they only know that the house feels sad, and they won’t want to buy it. You are much better off selling a vacant house (totally vacant, cleaned, fresh paint) or one that has been staged nicely with furniture. Another problem with one party remaining in the home is that it often causes disagreement between the divorcing parties as to whether the seller remaining in the home is “thwarting” the sale in any way.
IF ONE PARTY MUST STAY IN THE HOUSE, stage it. It does not have to be “full” but it should look as if there has been time and effort put into making the house presentable for buyers. In other words, no folding chairs and bridge tables in the dining room, and no blow up mattress serving as the bed.
CHOOSE A REAL ESTATE AGENT TOGETHER. Both parties must trust and feel comfortable with the agent who is chosen. Neither party should feel that the agent favors one seller over the other, communicates better with one seller over the other, or is otherwise prejudiced against one of the parties. That said, we often represent couples when an agent on our team has been friends with one or both of them and it seems to work out fine as long as there is good communication between all three – the two sellers and the agent. It often helps to have an agent who knows the parties, is empathetic, and fully understands the situation. If there is any conflict or uneasy feelings during the course of the representation, be sure the let the agent know your feelings about this and give them a chance to rectify or adjust.
COME UP WITH A PLAN OF COMMUNICATION. We will often find that divorcing couples are not communicating well with each other. This is not surprising, of course. In that instance, having a plan whereby the agent communicates with both parties at once through email is often the key. Otherwise, the agent has to choose “who to call first” and that can cause problems, UNLESS both sellers agree that the agent’s primary contact is with one particular seller. If email is to be the primary source of communication, be sure that both sellers have ready, easy access to email and check it regularly. Remember that DELAY – in responding to a request for a showing, or to an offer – can be deadly to a sale. Buyers will move on quickly in this era of many, many homes on the market.
PRICE RIGHT FROM THE BEGINNING. Divorce always takes an emotional toll, regardless of the circumstance, so you want to limit the damage as much as possible. Better to get the house sold that to have it sit on the market forever while the parties wait – and wait – and wait – to fully move on with their lives. Time and time again we find that the longer a house stays on the market, the less the seller ultimately gets for it, so this would seem to be a no-brainer. Price right from the beginning! In this strong buyer’s market, that is likely to be less than you thought or hoped you would get for it, but mitigate the damage by pricing well from the start. Believe me, ultimately it’s better – and more lucrative – that way for all parties.
Our team has helped many divorcing couples through the process of selling a home, and we’re happy to help you as well. Please do not hesitate to contact us at firstname.lastname@example.org or 404-272-3527.