Tuesday, February 10, 2009

Divorce the House Before the Spouse

Not necessarily my view but some interesting thoughts put forth here. Some bits from the article:

“If you’re still linked through the house, than you’re not really divorced,” says Kelly Lise Murray, a Harvard-trained lawyer and Nashville real estate agent...

But Murray, who describes herself as a “divorce real estate advocate,” says people tend to underestimate the “ghosts” that go along with keeping the house. The place is often so filled with memories, both good and bad, she says, that “it’s not the family home anymore. It’s a huge lodestone...”

Then there’s the even bigger issue of hidden debt. Ideally there will have been no secrets between the husband and wife. But money is a major cause of divorce, and in many cases, one spouse has no clue that the other one has rung up big bills that have become undisclosed liens against the property...

I think the premise above contains two particular advantages.

First, the divorce case is quickened and potentially "cleaner." I can't tell ya how many cases I have now that are just sort of lagging because of an inability to sell real estate...nothing too much happening but no final closure either. Of course no one can control market conditions.

Second, there's way too much guesswork in setting some value on a marital residence at some time fairly arbitrarily plus there's a lot of unknown and moving factors that have to happen for the typical refinance with buyout or sell in the future and distribute proceeds in some pre-set manner...now that's messy!

No Earnest Money: You Can’t Be Serious

Oh, but I am.

Here’s Wikipedia’s definition:

An earnest payment (sometimes called earnest money or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious (earnest) about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.

I’ve been working with a long term client regarding sale of real estate over the last months. And won’t go in to many details here but there was a shocker regarding a recent offer and contract (where eventually the buyer’s backed-out of the deal) where the listing real estate agent didn’t require nor take any earnest money from these buyers when they made their offer and subsequently backed-out.


And in the end the result may have been the same but it sure would have been nice if the potential buyer’s had a little skin the game…ya know, I think it’s called leverage.