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Getting a divorce is . . . well, a real pain-in a lot of ways. It used to be that one of the arguments in a divorce would be who gets to keep the home, but now we have a new twist: who gets stuck with the home?
With nearly one in six homes worth less than the mortgage owed on it, according to Moody’s Economy.com, divorce lawyers and financial advisers around the country say the logistics of divorce have been turned around. “We used to fight about who gets to keep the house,” said Gary Nickelson, president of the American Academy of Matrimonial Lawyers. “Now we fight about who gets stuck with the dead cow.” [Read Housing Market Divorce Twist]
I recently facilitated ((For more about how I “facilitate” a sale, email me at email@example.com)) the sale of a Sequim home to a California buyer, and the Sequim owners are in a divorce, but in this case, there is equity and the net proceeds are to be divided as in most cases, half and half. These Sequim sellers were really quite lucky to connect with a buyer in this market and at this time of year.
A divorce creates a fairly serious dilemma for selling real estate, because a divorce is a time when all the dysfunctional baggage of both people creates a significant probability that one of them will end up sabatoging the sale. I’ll write more about how to deal with such issues in another article, but believe me, as a real estate lawyer, I saw the worst in people come out during divorces when there was real estate and future income involved.
You’ll find more articles on handling real estate in divorce situations by going to the main real estate blog and typing “divorce” without the quotes in the search box. This search will also work for hundreds of other topics on real estate.
Courtesy of Sequim & Port Angeles Real Estate, LLC.
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Normally, both attorneys tell their clients to get comps (comparable sales) from real estate agents, because they can get those free. So now both sides get a couple of agents to prepare comp reports. The spouse who wants to stay in the house and cash out the other wants the lowest value, and obviously the other spouse wants the highest value. As if a divorce didn’t have enough conflict, here we go again.
After the agents spend a lot of hours doing the comps based on the small hope they will get the listing, the attorneys suggest that since there is such a wide disparity in the estimated market value, they hire an independent appraiser to do a formal appraisal for $400. At this point, what choice is there?
What’s my point? All of this took a couple of months, wasted the time of several real estate agents, and cost both clients a lot of extra attorney’s fees, not to mention the extra stress. They could have avoided all this nonsense.
What’s the answer? Hire an appraiser in the beginning. Save time, money, and stress. Makes sense, doesn’t it? Need a referral to a good appraiser? Email me or call me, firstname.lastname@example.org or 360-775-5424.
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The Real Story of the Prince and the Princess
Once upon a time there was a young Prince who met a beautiful young maiden in a distant village while riding his Stallion throughout the fiefdom. She was thin and shapely with long hair and soft skin. The prince fell madly in love with her quickly for he mistook high levels of testosterone for love. She feigned poise and confidence, but beneath the pretty surface was a girl of low self-esteem, and quite unbeknownst to the Prince, his beloved was a dysfunctional girl secretly carrying several suitcases of family baggage.
Before they could get married, the Princess-to-be started to get a large stomach, for she had become ripe with child. No one knew until the Princess had her first child, but as the years passed by, their sin faded in the memories of all. The Prince and Princess were the perfect family in the Kingdom with 2.4 children. They had a nice home, an above average carriage, and the Princess always wore the latest French fashions. As the years passed, she forgot about her childhood and her poverty.
The Rest of the Story . . .
Alas, all things were not as they appeared. The Princess filed for divorce one day to the great dismay of the Prince and the entire royal family. Many were shocked, but not all, for the Princess had been telling white lies about the Prince to her friends, brainwashing the servants in the Castle dungeon, and together with her lady friends she started a secret organization forbidden of women in that day. Determined to rise above their high positions, the liberated Princess and her friends decided they were entitled to more. No one in the organization could define “more,” but they all agreed that they were entitled to more, and with that as their motto, they created the National Organization for Princesses and Spousal Units, using the acronym “NOPASS,” but only because no one in the organization could spell.
In accordance with her new theological philosophy, the Princess proceeded to divorce the Prince and sued him for all that he had, including all his real estate holdings, his past and his future. In addition, after petitioning the Royal Court for all that the Prince owned, the Princess also petitioned the Court for Princess Maintenance in the sum of 2.4 chests of gold due in full on or before each full moon.
Becoming impatient with the Royal Court’s wooden wheels of justice, the Princess implemented advice from her Royal Committee of Exhortation and Culinary Secrets. The advise was to file a petition under oath that the Prince had physically attacked the Princess, and to seek his immediate eviction from the Castle with a Royal Order of Restraint. Although the Prince had never raised his hand against the Princess, the Royal Court always assumed such a petition to be true, and the Prince was prematurely evicted from his own Castle.
The Prince sought the protection of the law of the land, but his Esquire told him the best he could hope for was his life and a small cottage in the country. Assuming his lawyer was a genius, the Prince agreed, and the Royal Settlement Decree gave all his real estate to the Princess, except one piece encumbered by a 140% loan from KingdomWide Loan Company. The Princess also got all the Castle furniture and personal possessions, although she agreed to let the Prince have his Royal underwear and all the Kingdom debts.
Between the cash settlement and the lawyers’ fees, the Prince had no Royal funds. He could not afford the Princess Support payments as he had no gold left, and one day the RSHS (Royal Social & Health Services) took his license to drive a carriage, suspended his license to shoe horses, and his only donkey was repossessed and sold at a barn sale to a pauper for 50 cents. The Prince’s troubles grew, because he had no funds to pay past Royal income taxes (gift taxes were due on the debts the Princess had given him), and the Royal Infernal Revenue Service assessed a penalty of 50% for all unpaid taxes, and 12% to accumulate on the unpaid balance until the Prince should win the Royal lottery or die, whichever should occur first.
The ex-Prince had no money, no place to live, and had to take a job cleaning horse stalls in the village. No one believed he had once been a happy Prince. He did not look or smell like a Prince. Without money and without a horse the ex-Prince had no means to travel the many miles to visit his beloved children. The Princess subtly spread the word that the ex-Prince was unfit, that he did not care about his children and that he refused to meet his manly responsibilities to support his family.
Meanwhile, the Princess took her children on a long trip in the golden Royal carriage to Paris and far away places. She ate exotic foods and laughed amidst the entertainment of the jesters. Her children loved her, because she made them feel happy and secure.
In the months that followed the Royal execution and scorging, . . . I mean Royal separation and divorce, the ex-Prince, being sensitive and in touch with his emotions, became sad and was very lonely. The Princess not being one to miss an opportunity, quickly spread a rumor that the ex-Prince had lost his mind and was bipolar. Many sycophants in the Kingdom congratulated the Princess for her wisdom in divorcing the Prince and taking him for all that he had.
The Princess became a very wealthy landowner as real estate values appreciated and as she inherited all the remaining wealth of the Royal family. Everyone worshiped the Princess all the days of her life, because she let them touch her gold and silver, and because she poured sweet words and kisses upon them.
Memory of the ex-Prince faded, and his children grew up thinking of their father as a failure. They did not know what became of him, but believed their mother who told them he had died in an insane asylum.
The ex-Prince grew older and wiser through all his trials. He grew to understand that life is not about things, but relationships. He learned that life is not always just. Wishing to be helpful to others and to leave a legacy, the ex-Prince never mentioned again that he had been a Prince, was sworn into the Priesthood, and became a strong proponent of asset protection and prenuptial agreements. The ex-Prince taught these things at the Monastery, and his seminars became the most popular subjects taught at the monastery in over 1,100 years.
Postscript: This apparent sad ending to the story is not really the end. There is a postscript of hope. For men who can identify with this scenario because they have been divorced and Royally evicted, and find themselves in a phase with feelings of failure while struggling to rebuild a life of productivity and fulfillment, there really is hope. You may have to clean barns for a time, but you don’t have to end your life in a Monastery. I can personally testify that I have been through a difficult divorce, and my life as a bachelor is full of success now–emotionally, psychologically, spiritually, and financially. I have wonderful relationships genuine people. I have a successful business, have published a book with a second on the way, have written thousands of real estate articles, have built the largest Internet real estate brokerage in my market, am an Internet marketing consultant, and I have a great spiritual life, too. Life is good, and there is hope for the future for those who might be a few years behind me on this path. I know what I’m talking about.
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Sadly enough, people do get divorced, and as most everyone knows (some from personal experience), this can destroy the family financial security. Most times, the home must be sold, and the net proceeds divided as spelled out in the property settlement agreement as part of the final divorce decree. One should not make major decisions in a time of extremely high stress without good and trusted counsel. For goodness sakes, get some solid advice if you are or will be going through a divorce. Too many men or women get taken to the cleaners, and this means they often do not get half of the net proceeds from the sale of their home and other real estate. May I make a suggestion? Call me, and I’ll listen and give you some free advice. I’m a Realtor, but I did practice law for 20 years, so I understand what happens (or ought to) with real estate in a divorce. (360) 457-4587 wk
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One of the big issues in modern America is divorce and real estate. I’ve had several clients who are selling their property, or wanting to sell it, and their wives announced that they want a divorce. In one case, they had already signed a purchase and sale agreement, and the husband was asking, “Can my wife kill the deal.”
The simple answer is no. Assuming she signed the agreement to sell, if she refuses to sign the closing documents, she would be in breach, and the buyers could sue for specific performance. That could cost everyone a lot of attorney’s fees. It can be a nightmare scenario. Of course, divorce can cause devastating financial consequences, not to mention broken hearts.
When it comes to divorce and real estate, there are many traps for the unwary. The legal issues should be handled proactively, and that probably means you need to talk to a sharp attorney who understands how to protect you. But there is a major reason to handle the legal issues proactively, and it is not a legal issue.
You may know what the biggest trap is . . . if you have been through a divorce yourself. You think you know someone. You may have been married 23 years and sacrificed much of your life for your spouse and your children. You were loyal and always faithful. But one day your spouse starts saying things that don’t make sense and seems to become a different person–angry and demanding and wanting a completely different life.
Some spouses, not all, will become vicious and hire a junk yard dog attorney to take you for everything you have. This is the kind of dysfunctional spouse that also may seek to destroy you, although that is unbelievably mean and cruel beyond words. But many have gone through this kind of experience. It’s sad, and the spouse who goes off the deep end doesn’t seem to care that he/she is breaking their childrens’ hearts and imploding the entire family.
Handling the sale of real estate and actually getting the net proceeds voluntarily released by a bitter and unhappy spouse is no small victory. Hire a good attorney. Having your heart broken is bad enough, but not protecting yourself financially will have consequences for many years. Divorce and real estate is one of life’s touchy and difficult challenges.
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