Selling As You Separate

By
Mortgage and Lending with Equity Resources NMLS 67179 Licensed in NC

divorceLately, we've talked to several people who are going through a divorce - or WANT DESPERATELY to get out of a marriage.

Their real estate is holding them back.

I guess it's not surprising that folks with money issues are also having marriage issues - but there are important details they need to consider:

  • Who is on the Deed and who is on the note?
  • Is there an escrow?  If not - who has the insurance policy?  Are the taxes current?
  • If the separation agreement calls for one spouse to "buy out" the other spouse - are they qualified to do that?

One of our recent encounters had a guy with 6 jobs in the last 2 years trying to cash out refinance so he divorcecould "buy" his wife out.  They had over $50K in credit card debt, and a house that was being reduced by 7% every month per the seperation agreement.  He's a contract employee who goes from job to job.  Granted, he has the next 5 months of contracts worked out - but he's a contract employee.  He has mid 600 credit scores.  He has no cash reserves.  The house payment is currently 60 days past due.  His child support is $3000 a month.

"Why would you risk foreclosure as you wait for the house to be reduced to the "right" price?," I asked.  "Why not price the house correctly the first time?" Because they can't talk to each other.

If you are in / or considering a divorce - please be certain that you follow these basic steps to protect your credit and your assets:

  • Obtain a copy of your credit report.  Monitor it. 
  • Close all joint accounts
  • Find a real estate agent to represent the sale of the property
  • Be realistic about the repairs that need to be done and the staging required.  This is the best time to clean, declutter, depersonalize and pack.
  • LISTEN to your agent.  Listen to your counsel.  BE REALISTIC so that you can have move on with your life!

Please contact us for information about refinancing your homeSteve and Eleanor Thorne,Mortgage Loan experts in Cary, NC  919-649-5058

 

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Rainmaker
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Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417
United Real Estate - Addison, TX
Real Service. Real Results. Real Estate

Good information, Eleanor.  That last bullet applies in all situations, not just divorce.

Jun 28, 2008 05:09 AM #1
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Now that is uncannily timely. 

One of our agents is working with a buyer who has a contract on a house due to settle on Monday, the 31st.  Unfortunately, the well didn't pass the bacteria test so it has to be treated and retested.

I advised getting an extension of the settlement date for about 2 weeks.  Sounds sensible.

Nope, the house is being sold pursuant to an agreement in a divorce action.  The wife does not want to move.  She told her agent Thursday that if the house doesn't settle on Monday, she's not selling.

It's going to take about a week, no less to get the well treated and retested. 

Yep.  Divorce can cause a lot of trouble.

Jun 28, 2008 10:28 AM #2
Rainer
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Darleen McCullen
Raleigh, NC
Broker - Raleigh, NC Real Estate

Eleanor ~ This is so sad. I guess that all logic goes out of the window when people are divorcing. What a pity. I guess it's what they say - It's a thin line between love and hate!

Jun 28, 2008 12:48 PM #3
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Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Eleanor,

Judges should be required to understand the practical outcome of their rulings in divorce proceedings; many times they haven't a clue as to what they're ordering to be done.

Mike in Tucson

Jun 28, 2008 06:59 PM #4
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Eleanor Thorne
Equity Resources - Cary, NC
Equity Resources 919-649-5058

Guys - how true! We seem to talking to many people right now in this trap.  We are fortunate that here in Raleigh / Cary NC we are not in a declining market.  People need to price the house correctly - and get out of the mortgage so that it does not fall behind. 

A foreclosure can drop your credit score by 300 points!

Jun 30, 2008 12:34 AM #5
Rainmaker
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Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Eleanor,

Great topic.

A listing agent needs to be very diligent in these circumstances, being very certain that the will is there to sell.

Talking to the divorce attorneys is a good starting point.  I had one where the prospective seller had a quit-claim deed from the spouse, but seller's attorney told me the client could not sell without the spouse's approval.

Probably due to the note, but the property didn't sell, either.  Glad my sign didn't go up in front of it.

Jun 30, 2008 12:44 AM #6
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Tracy Santrock
Fonville Morisey/Santrock Realty Group, Inc. - Cary, NC
Raleigh - Cary Realtor/Broker In Charge

All I can say is that it can get real ugly. Fortunately we are not in a community property state so not everything has to be split right down the middle. 

One to buy, two to sell - even if they are getting a divorce both have to sign to sell.

 

Jul 06, 2008 10:22 AM #7
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Tracy Santrock
Fonville Morisey/Santrock Realty Group, Inc. - Cary, NC
Raleigh - Cary Realtor/Broker In Charge

I think Steve dropped by my office today?  We have meetings and tour on Tuesday and I had a listing presentation.  Did you also meet Kathleen- thanks for helping her by the way.

Tracy

Jul 08, 2008 04:06 PM #8
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Eleanor Thorne

Equity Resources 919-649-5058
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