Tips For Divorcing Couples who Own Real Estate

A colleague recently posed a question to a network of Divorce Professionals; Mediators, Marriage & Family Therapists, Financial Planners, Realtors, etc.  The question, “What do you wish your divorcing clients knew before meeting with you?”, created quite a discussion.

Many good and thoughtful answers followed, including:

• “I wish they would remember the love they once felt for their partner.”
• “I wish they would realize that the sooner they let go of their pain and anger, the sooner they will be able to be happy again.”
• “I wish they would understand that by trying to ‘punish’ their partner, they also punish themselves, and more importantly, their children”.

These and many other answers caused me to take another look at my “wish list” for the divorcing clients whom I represent.

As Realtors, my partner and I deal with clients who are going through one of the most stressful times in life.  Even clients who are not divorcing may experience trauma when selling the family home (one of the biggest financial and emotional investments in life!)

Add the stress of divorce, and the trauma can become toxic.

My wish for our divorcing clients is that they understand the way they deal with their real estate assets will impact their life, and the lives of those they love, long after the divorce has become final.  Decisions based upon negative emotions create negative consequences.  Decisions based on genuinely wanting the best for all involved almost always create a happier outcome.

If heeded, the following tips will help divorcing couples explore all options, and aid them in making decisions based upon the best outcome for all involved:

• Determine the value of the home, and what equity (or loss) will be split if it is sold.
• Determine if it makes sense to jointly retain the property for a pre-determined period, and:
• Allow one spouse remain in the home until it is sold
• Lease the home to a 3^rd party
• Determine if it makes sense for one spouse to purchase the property from the other, and know;
• How will this affect the ability of the “selling” spouse to purchase or lease the next property
• Will the lender release the “selling” spouse from the mortgage, or will the remaining spouse need to refinance the home.
• Understand the tax and credit consequences inherent in each of the above decisions

Finally, divorcing couples need to seek the advice of real estate professionals who specialize in working with divorcing clients.  These Realtors should be willing to be part of a “Divorce Transition” team if requested.  AND, these Realtors should be focusing on achieving the best outcome for their clients, even those outcomes which don’t create the highest compensation to the Realtor.