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Through the Lens



The three D’s in real estate are death, divorce, and debt. Anyone of these independently is traumatic and hard to deal with. However, many times these go hand-in-hand. As if selling your home is not stressful enough, adding one or more of these situations can make it almost unbearable. On the bright side, you can find an amazing realtor, who will help relieve some of that stress and anxiety!

Not all real estate transactions end this way. Some people are lucky enough to buy their first property, get married, start building their real estate empire. Their family grows, they need to sell and buy a bigger house. They might get a better job opportunity and have to sell and move out of state. Eventually they raise their family, decide it’s time to downsize, maybe get an ocean view condo, in a warm climate, and live happily ever after in their final days. Other people might not be so lucky. Sometimes things don’t work out as planned. That doesn’t mean they are a bad or unsuccessful person. People get sick and injured, marriages break up, loved ones pass away, or they lose their job. When death, divorce or death has impacted their lives, they will instinctively want to do something to lessen their emotional load. Thinking about finances usually puts you in a more stressed-out state, than in a better one. It can be tough to work out big real estate decisions in tough times.

Divorce: Do your best to work out the logistics with your partner, otherwise you could be spending more on lawyer fees. Try your best, even though the other side may be unreasonable. Even if it’s a happy break up, I suggest you don’t continue to share assets. It’s usually a good idea to sell off or have one of you take the sole possession of any shared property. Life will be moving forward. Don’t anchor it to the past. You will be growing in different directions now. Your future self will thank you for this.

Death: It may be a parent, a partner, or close friend. Use your empathy skills to get everyone on the same page. It is a highly emotional time, so things can derail easily when it comes to discussing money or property. The best thing is to have a will in place before this even happens, but that’s not always the reality. If you are taking over the estate for someone, it’s best to have your probate completed before you sell the house. In other words, whoever is legally handling the estate of the deceased, should have title transferred to them prior to going on the market to sell. It could take a very long time, but it will make for a much easier and cleaner sale.

Debt: Frequently with death or divorce, debt is inevitable. With divorce, there might have been two incomes to help pay the debt, now there will be just one. If one partner needs to rent instead of owning a home, their rent cost could be higher and therefore cause more financial strain. With death, the deceased might not have enough money saved or investments and the remaining party(ies) will have the full gamut of financial burdens placed on them. There are options to relieve that debt, but not always the ideal solution - bankruptcy, loans, or selling your home.

Five tips for agents, for a smooth transaction involving death or divorce.

1. Make sure the seller has the right to sell

2. Let your seller know – sale proceeds must go to the seller’s names in the contract

3. When sellers are divorcing, familiarize yourself with any court ordered terms of the sale

4. Discuss with divorcing sellers ahead of time, how costs relating to the sale will be shared

5. Let the title company know early on if the sellers are divorcing

(Disclaimer – I am not a lawyer, I am not providing legal advice, I’m just giving my personal view on the situation.)

Broken house photo credit - AndreyPopov/Getty Images

House/money photo credit: ThinkStock

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