With the seemingly endless cycle of bad news surrounding the real estate market these days, the issues arising from the sale of a marital residence in a divorce proceeding are becoming more complicated with every month that passes.
I cannot promise that the exercise of selling your former residence within the confines of divorce litigation will be a painless process. Hopefully you can limit the stress level by adhering to the following quick points:
- Make sure both parties are clear as to the definition of “net profits” to be divided upon the closing of the property. Does your agreement call for the parties to be equally responsible for the closing costs, realtor commissions, outstanding utilities and taxes…etc? In my experience, the smoothest transactions are the ones that spell out the responsibilities of each party regarding these settlement liabilities before the house is listed.
- Select a mutually agreed upon real estate professional to market your property. I recommend that each party submit two names for potential realtors If each party suggest two professionals, the appearance of one party “getting their person” does not become an issue. Make sure to inform the potential realtors that you are in the midst of a divorce to ensure that they understand that communication protocol that will be necessary to navigate this arrangement.
- Have a certified inspector conduct a walk-through before you execute a listing agreement with the realtor. Knowing what work will be needed for your house to pass inspection before any potential offers are forwarded could go a long way in understanding the true market value of your property. In the context of a divorce litigation, establishing a budget before the listing will help each party understand their financial responsibilities associated with getting the house up to code.
- Speak to your spouse and the realtor regarding potentially setting a pre-determined timetable for reducing the listing price of the property. I have seen many issues arise when one spouse wishes to “fire sale” the property and accept a low offer just to get the property off their hands. This approach may conflict with a spouse that may be in a financial advantageous position, who wishes to wait out a better offer. Agreeing to a fixed timetable to lower a listing price by a certain percentage will alleviate the disagreement each time that either spouse may wish to modify the current listing and allow all parties to remain on the same page. An agreement like this could also be utilized regarding automatic acceptance of certain offers within a percentage range of the current listing price.
I am hopeful that these tips will assist the process of selling your marital residence in the context of a divorce litigation.