Martin Halfon - BEST SELLING OPTIONS IN A DIVORCE

BEST SELLING OPTIONS IN A DIVORCE

Martin Halfon

Table Of Contents

Moving On

Be Prepared

Marital Settlement Agreement

The 80/20 Rule

Relating The 80/20 Rule To Home Selling

Creating Curb Appeal

Staging With Purpose

Upgrade With ROI In Mind

The Three D's

10. How To Market Your Home

11. Common Seller Mistakes

12. Avoid Costly Mistakes

13. Finding Buyers

14. Be A Power Negotiator

15. The Dos And Don'ts Of Negotiating

16. Bargaining Chips

17. Serious Considerations

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"The River of Change er of Change"

“The moment you decide to no longer think the same way, act the same way or live by the same emotions, it’s going to feel uncomfortable. And the moment you feel uncomfortable, you just stepped into the river of change.”

"When it comes down to it, there are two ways to approach our lives: either as the victims to our lives, or the creators of our lives."

"In the classic placebo effect, our belief lies in something outside of us. We give our power away to the material world, where our senses define reality. But can the placebo also work by creating from the immaterial world of thought and making that unknown possibility a new reality."

Dr. Joe Dispenza

About Marty Halfon I understand what it is like to sell the family home, get separated and later file for divorce. I also understand the pain and stress it causes for all involved. If you have kids there are a lot of tears, anger and confusion. If you don't have kids, there is still a lot of tears and anger and a lot of confusion. These can be scary times and navigation through all of this can be so emotionally draining. I get it. Been there done that. I was one of the lucky ones, I was able to resolve my marriage. That being said, I believe I can HELP YOU get through this process by taking some of the responsibility and stress off of your shoulders, lessening the load and being a guiding light that will allow you to see that these waters will be kept as calm as possible. So you can focus on yourself and the family. ____________________ Think of this book as my gift to you. It contains insider advice on the home-selling process to help you achieve your ultimate real estate goals, including: When I first ventured into the real estate industry years ago, I had no idea of the complexities that went along with it. My goal is helping sellers like you avoid the headaches often associated with the home-selling process. In my years of experience, not only have I helped alleviate the stress of selling for numerous clients, but I’ve also accumulated years of knowledge to help them get more money for their homes in the least amount of time. I decided to become Real Estate Divorce Specialist after going through my own process of filing for divorce and selling my marital home. I also realized that there was a huge need for real estate experts who really understood the complexity of divorce while having to sell the family home. All the anger, pain, and

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fear about the unknown. I felt that I could be that person. That conduit, that voice or reason while sharing my over 40 years of real estate.

Real Estate Divorce Specialist helps all parties involved. This includes attorneys on both sides of the divorce case, navigate the sale of one most complex and valuable asset in a divorce, the Marital Home. REDS will also have knowledge in dealing with Court Orders, Spousal Consent and Right of Possession. There are emotional issues and tax issues that may come into play as well. I decided to share all of my expertise in one place with potential clients. And that’s why you’re receiving this book. I want to help you have the best possible home-selling experience especially during a divorce. And by that, I mean I want you to: 1. Get the most money possible for your home, 2. Sell in the least amount of time, and 3. Avoid the headaches most commonly associated with the home-selling process, especially in a di y in a divorce sell. I have been a resident of Beverly Hills since 1962. My relationships span throughout the city. I received my real estate license in 1978 and truly consider myself an expert, especially in the luxury market. In 2001, I established Halfon Properties Group with a distinct goal: to guide clients beyond just buying the right home, but to also use my preeminent expertise in making sure it’s the right investment. I work with both buyers and sellers specializing in luxury residential and commercial real estate in the greater Los Angeles area.

As an authority at the forefront of transactional real estate, my

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knowledge of the intricacies of the real estate “game” benefit my clients at the highest level. I am a skilled negotiator with years of experience working with a myriad of properties. I have spent substantial time early in my career upgrading and creatively renovating properties. I have bought, sold and renovated homes and apartment buildings from Hollywood, Beverly Hills to Santa Monica for my personal account over the last 30 years. My real estate philosophy is simple: I represent each client exactly the same way I would want someone to represent me. I believe my impressive experience and transactions in luxury real estate and also in investment properties allows me to share my knowledge with the clients I work with. I have in-house social media/marketing/web design and a transaction coordinator. This gives the client the capacity to have thorough, personalized service with attention to detail Outside of real estate, I am very active in the Beverly Hills community. I also try to stay active with a number of local non- profit organizations. Most importantly I stay active and connected with my family. The Halfon Group | Keller Williams is located at 439 North Canon Drive in Beverly Hills California. If, after reading through my book, you want to hire me to help you sell your home, I’d be more than happy to meet with you to discuss a specific plan to sell your home. As I am here to help!

Let me share my knowledge and ledge and experience with you.

Properties owned and r wned and renovated By Marty Halfon Hollywood 1247 North Sycamore Ave. 16 Unit Courtyard apartment/pool 1820 North La Brea Ave. 10 Unit Courtyard apartment/pool 1538 North Hayworth Ave. 12 Unit Courtyard apartment/pool

West Hollywood

630 North West Knoll Drive 3BA 2BA Home Major Remodel

Beverly Hills

426 So. Rexford Drive 16 Unit Courtyard Apartment/pool 2011 Benedict Cyn 3BD 3BA New Construction

2350 Benedict Cyn 3BD 4BA Home 2451Coldwater Cyn 3BD 3Bath Home 308 So. Bedford Drive 4BD 4.5BA Home 155 So. Elm Drive #102 2BD 2BA Condo

Santa Monica

801 Ocean Ave. # 306 2BD 3BA Condo

Partial List of "Home Sold By Marty Halfon"

Beverly Hills/Westside

308 South Bedford Drive 329 South Bedford Drive 345 South Peck Drive 252 South Rodeo Drive 308 South Linden Drive 315 South Camden Drive 329 South Crescent Drive 502 Hillgreen Drive 329 South Crescent Drive 155 South Drive #102 300 North Swall Drive #154 211 S Spalding Drive #401N 9001 Dayton Way #A 515 North Alpine Drive 1729 Chevy Chase Drive 1053 Hillcrest Road-Leased

712 North Maple Drive -Lease 2775 Motor Ave Cheviot Hills 875 Malcom Ave. Westwood 10442 Wilkins Ave. Westwood 8314 Marmont Lane West Hollywood

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Beverly Hills P.O.

1250 Angelo Drive 9541 Heather Road 9852 Gloucester Drive 1601 Lindacrest Drive 1216 Shadybrook Drive 9698 Yoakum Drive 2301 Benedict Cyn 2011 Benedict Cyn 2350 Benedict Cyn 2415 Coldwater Cyn 2451 Coldwater Cyn

Partial List of Commercial Property Sold

1538 North Hayworth Ave. Hollywood 12 Units 7400 Hollywood Blvd. Hollywood 112 Units 1247 North Sycamore Ave. Hollywood 16 Unit 1820 North La Brea Ave. Hollywood 10 Unit 3324 Castle Height Los Angeles 119 Units 803 South Curson Street Los Angeles Duplex 1156 South Hayworth Ave. Los Angeles Duplex 4049 Garden Ave, Silverlake 5 Units 3516 Garden Ave. Atwater Village 7 Units 426 So. Rexford Drive Beverly Hills 16 Unit 9930 Robbins Drive Beverly Hills 5 Units

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Testimonials For Marty Halfon

Here’s a few clients whom I have helped buy or sell a home, and what they said about working with me. (These reviews have been anonymized to protect clients’ identities.)

Seller #1

I had to sell our family home because I was going through a devoice. My marriage was a mess but my house was worse. I had been out for over a year the place turned into a pigsty. Marty had the foresight and guidance to get my wife to move out so we could start the clean up and repairs. He even got us movers. Marty put together a budget and brought in his crew in and repainted the interior an polished out the wood floors and found us a source for beautiful new carpet. He then was able to get a staging company to stage our home and was able to defer a $30,000 cost until we sold the home and then the expense was paid through escrow, as I did not have the capital to cover that additional expense. Marty sold the house at a great price. He truly was a blessing in a time of turmoil. Thank you Mr. Halfon.

Seller #2

I was going through a divorce and it was a very scary time for me. We had to get the house in order to sell and there was a lot of work that needed to be done before it was put on the market. Marty suggested that I and the kids move out of the home early, then do the repairs and stage the home so we could get top dollar. He found me a moving company and started the clean up. He has access to worker and resources. We repainted, carpeted, repaired and landscaped. All at a reasonable price. Marty did xv

an amazing job not only with the selling of our house but truly helped as a neutral party in creating a calmer environment. Thank god for Marty.

Seller #3

I told Marty that I had land in Miami that I was contemplating selling. Within two days, he arranged through a Miami contact of his to bring me an offer on my property, despite it not being listed. I sold the property for more than I would have even listed it for. Amazing experience. Thank you Marty Halfon.

Seller #4

Mr. Marty Halfon is a very intelligent, organized, and persistent individual. His experience and integrity is unmatched and his ability to close deals and make them happen is truly amazing. Marty is very professional in his work ethics and is highly recommended. Working with Marty you will not only get the best real estate service and experience but you will also gain knowledge of his experiences and what it takes to be the best like Marty in the business! Unconditionally he treats all his clients with the utmost love, care, honesty, and the best interest for them as if it was for his own! Thanks Marty for this wonderful opportunity and experience to work with you and I look forward to working with you again!

Buyer #5

Marty shared his extensive knowledge of Beverly Hills and the westside as we began our search for a home in the area. He spent time with us and was very patient which made our transition from Northern California much easier. Together we were able to find the ideal home for us and we really appreciated Marty's guidance through the purchase and negotiation process and his continuing advice as we began to make improvements to our

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property.

Buyer #6

We have worked with Mr. Halfon multiple times. His depth of knowledge of the West side, his excellent network of contacts, and ability to negotiate fairly sets him apart as an excellent asset to any family purchasing or selling real estate.

Seller #7

Marty Halfon helped us with the sale of my dad's long time home. The prospective buyer's were interesting, but it's BH so it comes with the territory. Marty and his assistants were helpful, prompt and delivered. At the end of the day, if I had another house to sell, I'd contact Marty again.

Seller #8

Thank you ! Thank you ! Marty Halfon for your incredible work selling our dad's house. Your tireless efforts and enthusiasm made Mike and I feel that you were really a partner in this process. Thank you for handling the negotiation with sensitivity and great business aplomb that kept the stress low for us knowing "i"s were dotted and "t"s were crossed. I think Dad would agree.

Seller #9

Dear Marty,

As you know, I have been in the real estate services industry for two decades. I started my career one of the largest independently owned groups of title agencies in the country, and in 1992 became President. I have built and sold multiple real estate service companies providing P&C insurance title services, land

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surveying, property preservation and maintenance services and others. I share this information with you for the purpose of demonstrating my in-depth knowledge of the industry. Additionally, I have personally bought and sold over 12 homes in the past 10 years for my own account in multiple markets across the country. That being said, I want to personally thank you for the exemplary way you handled the purchase of our new home the 500 block North Alpine Drive in Beverly Hills. Your guidance throughout the transaction was best in class and I would not hesitate to work with you again in the near future. Again, thank you and I am hopeful that my recommendation is heeded by others in the market so that they can benefit from your service. I look forward to working with you again in the future.

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CHAPTER 1 Moving On

Divorce is not easy. Even the most amicable separations are plagued with disappointment, lack of communication, and failed expectations. In the best case scenario, two people who are dissolving their union will work together to resolve their differences productively and part ways, hopefully without drawing blood. Unavoidably, though, during the process, you and your spouse’s emotions will fall prey to a myriad of changes as the marriage, family, and shared assets are legally separated. Adding to the stress is the sale of the family home, which is typically the largest asset of the marriage. This can evoke tremendous emotion: sadness, anger, sentiment, and disappointment, to name a few. The combination of the stresses of the divorce with the sale of the family home requires patience, diligence, and great personal fortitude. With the help of seasoned, experienced professionals — such as attorneys and real estate agents — divorcing couples can successfully move through this challenging phase of their lives and on to their future. The phrase “and this, too, shall pass” sounds like a bad cliche in a moment like this, but it's one worth keeping in mind. No matter how bad “it” gets, it will eventually pass. The divorce will become final. The house will sell. The children will adapt, and life will go on. This is where that personal fortitude will come in handy. Decisions regarding the family home are not only emotional, but mired in legal maneuvers and decisions as well. Divorce laws vary from state to state, so licensed legal counsel is your best source of information on how to protect both parties’ interests.

Many questions arise when trying to sell your home during a divorce. What needs to be done to ensure a quick and profitable sale? Who will choose the Realtor®? When is the best time to list a home? Who bears the financial responsibilities of the sale? You can proactively allay your fears and clear up misconceptions by doing your due diligence and researching what to expect throughout the selling process. Every divorce has a unique set of circumstances. This book is not intended to be a legal guide or to dispense legal advice but provide you with a source of information regarding the sale of your marital real property. Becoming familiar with some real estate terminology and options will give you a better understanding of your situation and confidence that, indeed, “this too shall pass.” Some states are known as “community property” states and others are defined as “equitable distribution” states. Community property states follow the rule that all assets acquired during the marriage are considered “community property.” There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state that gives parties the option of making their property community property. The remaining 41 states follow the laws of equitable distribution, which means property acquired will be divided between the spouses in a fair and equitable manner. The court determines who receives what based upon a variety of factors, such as the relative earning contributions of the spouses. In community property states, on the other hand, all income and assets earned or acquired during the marriage are considered to be equally owned. This applies to all debts, no matter who created the liability. In a divorce action, these will be divided equally.

In addition, there are mutual court orders that automatically protect marital properties. An automatic temporary restraining order prohibits spouses from selling, transferring, or borrowing against property when a divorce is filed. Again, any orders should be discussed with your attorney, as this protection varies from state to state. The family home is typically a couple’s most valuable joint asset and must often be sold in order to equally distribute its value between the two spouses. Therefore, it is vital for you to understand the relationship and difference between a mortgage deed and a property title. Mortgages are conditional legal agreements made for the purpose of buying a property/home. The lender’s security interest is on record when the title is registered. The mortgagee (lender) may obtain a foreclosure order to take possession if payments of the debt are in default. A property title refers to ownership of that property and the right to use it. A person on the title can transfer ownership to another party but cannot transfer more than he or she owns. Some divorcing couples utilize a quitclaim deed, which transfers ownership from one spouse to another, but it does not transfer financial responsibility. One spouse may transfer title of the home to the other and consider himself or herself free from the financial responsibility of the mortgage payment, but this is not the case. The loan payments are the responsibility of the parties on the mortgage. In order to change the names on the mortgage, one spouse must obtain financing with which to buy out the other. All discussions regarding mortgages, quitclaim deeds, and title of property should be conducted with your legal adviser. The intent of this book is to provide information regarding the sale of your home within the framework of a divorce; it is not intended to provide legal counsel or advice.

CHAPTER 2 Be Prepared

Step one in successfully handling the disposition of the family home in a divorce is to have a clear understanding of your financial standing. Knowing your precise financial situation throughout the emotional turmoil of divorce will keep you from making snap decisions that could severely impact your financial position. It is crucial to know who bears legal financial responsibility for making the mortgage payments. If both spouses are listed on the mortgage agreement, they are equally obligated to the lender, whether or not their name is listed on the property title. Removing a party from a property title does not relieve the financial obligation of that party. Two signatures on the mortgage means two responsible parties. This also includes the homeowner’s insurance policy. It is important to know who is the beneficiary and if both parties are insured. For the previously stated reasons, it is critical that you collect and immediately provide to your lawyer all information regarding your home insurance, property taxes and liens, mortgage and marital debts, and marital assets. The more prepared you are to face your financial future, the more secure you will be moving forward. Knowing where every dollar has to go will help you make better decisions and avoid adding undue additional stress to the already uncertain future that accompanies divorce. Knowing where you stand financially greatly influences your decision to keep, sell, or buy out the family home. There are many considerations for each option, and they all require a significant amount of due diligence, financial planning, and difficult 6

decisions.

Affordability and objective forethought are the keys to your decision-making process. Poor decisions can affect you and your former spouse, long after the divorce is finalized.

KEEPING THE HOUSE

When divorcing couples have school-age children, they often decide to allow one spouse to remain in the home to avoid disrupting the children’s routine, school attendance, and social relationships. This can be accomplished with written agreements between the spouses. Equitably allocating home expenses and mortgage payments by percentages or mutually agreeing on the delegation of financial responsibility will allow your family to focus on what matters most: the children. A clear-cut, signed agreement drawn up by a mediator will help avoid contention surrounding responsibility for the maintenance, expenses, and future sale of the family home, whether it be to the spouse who remains in residence or an outside buyer. This is why it is important to know your financial position and how much each spouse can contribute. If one spouse fails to make their share of payments, it can negatively affect both parties’ credit ratings and complicate the later sale of the home. If each spouse has provided appropriate evidence that they have sufficient resources to maintain this type of arrangement and is willing to participate in the agreement, this may be the right path. Some couples choose to reside in the home as roommates for different reasons. It might be that neither spouse is able to afford both their share of the home and a new residence, or it could be to decrease the abruptness and difficulty of the children’s transition. If, later, one leaves, that person will have increased financial obligations in finding a new place to live, so give serious

thought before choosing this option.

Be aware, though, that some spouses are tied to the home, not only by their children but by their own emotional investment. The house represents stability and a happier time and provides shelter from the trauma of divorce. In keeping it, they may feel more in control of their situation. Some may think that keeping the home makes them the “winner,” despite the financial hardship it can bring. It is difficult enough to deal with divorce without later learning that unforeseen or unbudgeted expenses have crept in and taken a big bite of an already tight budget. Be realistic about what is affordable.

SELLING THE HOUSE

For most couples going through a divorce, selling the house is the best solution. Selling a home under any circumstances takes a great deal of time and effort, so the addition of the emotional stress of divorce can make the task overwhelming.

LEGALITIES

The termination of a marriage requires the division of real property. Marital property belongs to both parties, regardless of whose name is on the title, and each party is entitled to their equitable share. Some couples have a legal agreement beforehand, which provides a simple solution to property division. Some couples are able to use mediation to divide assets, but others are unsuccessful in negotiating equitable terms and must turn to the courts to rule on the division of their real property. Again, this book is in no way a substitute for professional legal advice. Always consult your attorney regarding the division of real property. Many couples enter into a mortgage based upon the expectation of a two-salary income that generates enough money to cover the

monthly mortgage payment, upkeep, utilities, and unexpected repair. It may be that neither spouse is in a financial position to singularly carry the full financial burden, and neither may be in a position to buy out the other. Preventing default on the mortgage is the most common reason divorcing couples choose to sell the family home. Monies budgeted for the upkeep of the home, property taxes, home insurance, home security, and house payments may or may not still be available when couples split. Couples who sell their homes before divorce have the advantage of the capital gains tax exclusion of $500,000. A divorced person selling a home receives 50% of the tax break. There are other tax benefits available when substantial equity growth has occurred over years of owning a home. These are best discussed with your lawyer or tax professional to ensure you make financially sound decisions about when to sell your home.

THE EMOTIONAL SIDE OF SELLING YOUR HOME

If the marital home has been the hub of happiness and family life, it may turn out to be a constant reminder of what once was and is no more. The good memories the home represents are now tainted by the unhappiness and pain of divorce. No matter how strong sentimental value may be, often the best option is to sell the house and move on. That way, both spouses get some money to make a clean break and start fresh. Once you’ve decided to sell, there is a long “to-do” list — a list that is difficult under the best of circumstances and only made more difficult with the added emotion of divorce.

LIABILITY

The liability of keeping a home may be the best reason to sell. There are various ways to keep a house with one spouse remaining and the other departing, but they all carry risks and challenges. An equity buyout occurs when one spouse keeps the asset, and, in exchange, compensates the other for his or her

share of the equity.

THE BUYOUT

If one spouse is in a financial position to remain in the home, it may be easier to buy out the other’s share of the property, which would entail refinancing the home. The real challenges come in working out the details. There could be disagreement about the selling price or the appraisal value. Or, the equitable division of the property may not meet expectations. Other questions that arise include the possibility of giving up marital property rights in exchange for other assets, like investments. The ex-spouse may lose out on future appreciation of the house. It is crucial to know that questions like these will arise when it comes to the division of property in a buyout situation and that you have to be prepared to address them. Refinancing the home in one spouse’s name means not only settling the previous loan but paying the selling spouse their portion of the buyout. As an example, if the principal balance owed is $500,000, and there’s another $500,000 in equity, one- half of the equity ($250,000) would be due the selling spouse, and $500,000 would be required to pay off the principal. The refinanced loan would have to be at least $300,000. If the house value has appreciated, who is entitled to the equity? What if the property is appraised lower than the current loan? All scenarios must be considered before deciding on a buyout. Again, knowing your financial standing before filing for a divorce is paramount.

CO-OWNERSHIP

If you or your spouse want to keep the house and buy out the other, but need time before this can be accomplished, co- ownership is a possibility. However, maintaining a clear channel of communication with the ex-spouse is a major part of co- ownership and one of the most difficult to achieve because it

requires a lot of mutual trust, something that is typically lacking in most divorce scenarios. The goal is to move forward, so any concessions made between the spouses benefit not only both parties but especially the kids. Maintaining a civil, business-like relationship in front of your children will help them maintain stability and keep them from moving away from their home, when they’re already adjusting to a lot of change. If one of the spouses can occupy the home with the children and make the mortgage payments until they can manage a buyout and become the sole owner, it’s a win- win. The drawback to this type of arrangement is the negative consequences if the spouse in residence defaults on mortgage payments. Both parties are still responsible, and missed payments will affect both spouse’s credit scores. Moving forward with a new life can be tricky in a co-ownership agreement because consistent communication is necessary, and that isn’t always (or even usually) easy for divorced couples. House payments, insurance premiums, utilities, and necessary repairs are guaranteed financial obligations. What if the utilities are shut off due to nonpayment? What if the home heating and air-conditioning system terminally fails? What if you moved two hours away and your ex-wife needs you to help with a fallen tree because she can’t afford to pay someone to dispose of it? What if the resident spouse has to move out because s/he cannot afford to stay? What if the resident ex-spouse files bankruptcy and risks losing the house? These are all very real possibilities. Co-ownership must be considered carefully, and a knowledgeable attorney dedicated to protecting your family’s well-being will be your best source for guidance on the complexities that may arise. An agreement can be created to address all the obligations mentioned previously and protect both parties at the same time.

No matter the option you choose, the mortgage must still be paid. Selling is the only alternative if neither of the spouses can afford the home on a single income. A short sale is possible if the home is going into foreclosure. You can come to an agreement with your lender to sell the home for less than is owed. Divorcing couples with good credit may find more favor with their mortgagee to obtain permission for a short sale. Walking away from your home and mortgage is not tolerated by the courts. The lender will add to the complications of your divorce by taking legal action to receive the remaining balance. You can find yourself in court if you or your spouse is uncooperative or is demonstrating an obstructionist attitude, which will cost more time and more money. Many divorcing couples end up using up what equity they had in their marital property on legal and court fees. Refusing to sign papers to sell the home or refusing to help pay for the mortgage will give a judge no other option than to order the home sold on the court’s terms. When a divorce action is filed, an automatic temporary restraining order can be issued to prevent spouses from selling or borrowing against marital property. Discuss this option with your lawyer to make sure your stake in the marital property is protected. Less than one-third of divorces end up in court due to disagreements over property division, but if you’re in that unfortunate one-third, going to trial doubles the cost of the divorce. An average divorce costs $11,000 if settled out of court. That amount will at least double if you have to go to court for resolution, which will take a serious bite out of your home’s equity. Many divorcing couples who want to limit legal fees as much as possible, as well as the time it takes to settle, choose to sell their home. Surveys show that couples who resolved their property

issues without court intervention completed the divorce in under a year. Those who could not agree and went to trial had to wait an average of 15 to 16 months. Some states require divorces to be resolved within a year, but dockets are full in most states, which causes long wait times for a divorce trial. While you’re waiting for the trial date, the mortgage still has to be paid, as well as utilities, insurance, and property taxes. The rest of this book will expand upon the benefits of marital agreements that help sell the home, the importance of having realistic expectations regarding the value of your home, and how choosing a Realtor® who has experience working with divorcing couples may be your greatest asset in the sale of your home.

CHAPTER 3 Marital Settlement Agreement eement

One of the most productive methods for couples to move forward with a divorce and on with their lives is to disconnect emotionally and handle the sale of the home in a businesslike manner. Because the marital home is usually the greatest asset in a marriage, it is also the greatest liability. You must give a lot of serious thought to securing settlement terms that protect both parties, especially the spouse who is departing the home. When you enter into your marital settlement agreement, your lawyer should specify who is financially responsible for the mortgage, the homeowners insurance, utilities, and upkeep of the marital home. If the spouse occupying the marital home is responsible for listing, showing, and selling the home, the other spouse may be obligated to pay part or all of the mortgage, as well as contribute to the upkeep of the home. If the occupying spouse shows little effort in getting the house sold, the marital agreement should provide a timetable for the sale of the home. It is important for the marital agreement to include provisions outlining the steps to be taken if the house cannot be sold within a specified time or if one spouse fails to meet any financial obligations. Consult your legal adviser for contingencies that are specific to your situation. Additional expenses may include repainting, landscaping, or replacing appliances or carpeting. There should be clear direction on how to handle the unexpected while in the process of selling the home — for example, if a home inspection reveals a cracked foundation or termite infestation. Ex-spouses sometimes agree to a fixed amount of time to share expenses prior to the sale of the home. Quick decisions can be damaging, 14

especially when it comes to co-ownership or one spouse occupying the home until it sells. By keeping emotions at bay while making important decisions and focusing on what needs to be done to sell your home, you and your ex-spouse can move on faster.

REASONABLE AND REALIS LE AND REALISTIC EXPECTATIONS

Since the home is one of the most valuable marital assets, dividing the property between a couple in the throes of divorce can be a major source of contention. If you have other properties, such as a vacation home or investment properties, those will also have to be assessed and assigned a monetary value. In order to divide equitably, or equally, as the case may be, you will need to know the precise value of your property. When it comes to the marital home, there are several common valuation methods available to determine the value. These are used in property settlements and may differ from what you perceive as your home’s worth.

COMPARATIVE MARKE TIVE MARKET ANALYSIS

Your real estate agent will provide you with a comparative market analysis, or CMA. This is an in-depth review of your home’s worth in the current market, based on the recent sale prices of comparable homes. Any differences, such as the size of the lot or value-added items like a swimming pool, are taken into consideration and the value adjusted accordingly.

BROKER PRICE OPINION

The broker price opinion (BPO) is another type of estimate, produced by a real estate agent in response to a request from a mortgage lender.

A few years ago, when real estate sales around the country were at their peak, lenders found it difficult to handle the staggering number of transactions. The BPO concept was born. It is less elaborate, and thus less costly, than an appraisal, but more involved than a CMA. There are two kinds of BPOs: drive-by and interior. If the agent has access to the interior of your home, you will obtain a more in-depth and accurate evaluation. No matter your circumstances, you’ll obviously want top dollar from the sale of your home. Therefore, it is crucial to get a reliable evaluation generated by a Realtor®, who will stand by his/her appraisal throughout the sale process.

THE COST APPROACH

The cost approach is based upon what it would cost to reproduce your home new, minus depreciation and obsolescence. Would any person buy the property for a cost greater than the value of the land and a structure with equal appeal?

PROFESSIONAL APPRAISAL

A professional appraisal for the valuation of marital property is required when a court is dividing the couple’s assets. Some states require a judge to independently determine the fair market value. There are some circumstances in which a judge may consider information provided by a spouse. You should understand that when a valuation is determined, it may not include latent cost-related issues. If there are plumbing problems under the foundation or the structure has been compromised by a termite infestation, these situations will affect the sale price. It is advisable to have a home inspection conducted in an all-encompassing examination of the condition of the home. It will be invaluable in discovering the universal condition of the home.

The inspection will cover electrical wiring, plumbing, roofing, insulation, as well as structural features and could uncover issues invisible on the surface. This will give you a realistic idea of what to expect when you sell your home. Most buyers require home inspections to eliminate any questions regarding your home’s integrity. Typically, a buyer will order and pay for a home inspection. However, doing this yourself in advance offers two advantages: 1. Both spouses are made aware of any underlying problems with the home, and arrangements can be made to split the cost of repairs. 2. Buyers who are interested in the home will have an additional layer of security in knowing the integrity of the home, without having to put out the money themselves for the inspection. It may cost you a few hundred dollars upfront, but buyers appreciate having this information available, and that goes a long way toward building a relationship of trust and willingness to do business.

FINDING THE RI G THE RIGHT REAL GHT REALTOR®

Choosing the right listing agent is important. As obvious as this might seem, selecting the best real estate agent for you can be difficult. Most people personally know a real estate agent, but don’t jump headlong into working with friends who 1) may not be experienced at working with couples in the midst of divorce or 2) may not be impartial to both spouses. There are Realtors® who focus specifically on helping people who are going through a divorce. They are known as Real Estate Divorce Specialists. These agents have been thoroughly trained in legal and tax aspects of divorce. If the house is handled

improperly during the divorce, the result could be that one or both spouses end up ineligible to qualify for a mortgage for many years. A real estate professional experienced in the divorce niche can provide clients with step-by-step guidance to protect themselves legally and financially. What defines a “good” real estate agent? That often depends on your particular circumstances. For someone selling a home during a divorce, it means finding someone with experience dealing with divorcing couples and who is an expert negotiator — not only between seller and buyer, but between seller and seller, who are not always on the same page or even on speaking terms with each other. Some Realtors® prefer not to take on listings with divorcing couples because the process is often more complex and labor-intensive than a standard real estate transaction. Not every real estate agent is equipped to handle the complexity of property issues that come with the division. Most of all, you have to like your agent. You might be spending a lot of time with him or her over the next few months. This has to be a person who is calm, cool, and collected, is sensitive to the circumstances, and can move your home no matter the current market. He or she must relate well with both spouses and cannot show any bias or judgment. You want someone whom you feel listens to your priorities, is patient with the situation, and can be trusted to deal fairly and communicate fully with both parties. The best Realtor® is one who will work effectively with both parties, despite conflicts of interest and strong emotions coming from both sides. An experienced Realtor® won’t run at the first sign of an emotional outburst, shy away from awkward meetings between soon-to-be exes, or hold exclusive meetings with one party over the other and will instead provide a neutral ground for interactions. Be sure your Realtor® keeps the details of your divorce out of sales conversations, since some buyers equate divorce with “desperate to sell” and will attempt to leverage that

information in negotiations to get a lower price.

You don’t have to seek out a certified Real Estate Divorce Specialist, but when you look for a Realtor®, don’t be shy about asking questions about their experience working with divorcing couples. You must be able to wholeheartedly trust your Realtor®. Listen to how they talk about previous clients. This is usually an accurate indicator of how you will be treated. Look for discretion and empathy. Most Realtors® work with buyers and sellers who don’t know each other, not with divorcing couples who may or may not be adversarial with one another. The best Realtor® for you will be impartial and understand the complex nature of divorce. Make sure you pick a good listener. No two divorces are alike, and your Realtor® should be able to help sell your home without taking sides. Some Realtors® are trained in mediation. Since you and your spouse will both be involved in the selling process, look for an exceptional communicator who knows how to keep everyone on the same wavelength. Suitable agents are focused on being objective and are unaffected by emotional outbursts from either party. Not only do you want a Realtor® with divorce experience who is a good listener/communicator, you also want one who is genuinely concerned about your situation. They should show an interest in helping both parties experience a quick and strong rebound in their finances. They should also be knowledgeable about the local market, in order to price your home correctly from the start.

Here are some traits to look for when hiring an agent.

• Listing price to sale price ratio — What is their success rate for sales? • Current — Is the agent up-to-date with the latest housing

trends so he/she can serve you effectively? • Connected — Does the agent belong to a network with the necessary contacts to assist in every phase of the sales? This network should include home inspectors, quality service-people, other brokers, and county officials. • Knowledgeable — Is the agent familiar with the current market and able to price your home strategically? Does s/ he know the unique features of your neighborhood to distinguish your home from the competition? Does s/he know what to highlight in your area to attract buyers? • Organized — An agent must pay close attention to your specific needs, communicate well, and be quick to follow leads. • Personable — An agent who is sincerely interested in helping you will go the extra mile with a smile. They must be able to sell themselves to you, as well as sell your home to a buyer. • Passionate — Some agents treat their job like a hobby or just a way to earn extra income. Find an agent who is passionate about what they do and loves their job. • Tenacious — Successful agents possess a strong work ethic. They are efficient and take advantage of time-saving tools that help sell your home. • Honest — Professional real estate agents build their reputation on high standards of business practices. • Self-motivated — Real estate agents are commission-only business people. Successful agents work hard because what benefits their clients benefits them. • Creative — Sometimes it takes creativity to properly showcase a home, develop engaging content, and negotiate a sale. An agent who can quickly address any

marketing need is an asset to you. • Tech-savvy — Agents well-versed in the latest technology for marketing homes should have a website, social media setup, user-friendly home search options, and quality presentations online with high-resolution images of homes, as well as videos and slideshows. A professional Realtor® has to wear many hats. They must be proficient in marketing, negotiation, consultation, the legalities of real estate, property taxes, and, most of all, gaining the trust of their clients. It is to your advantage to hire an agent who understands your unique needs while you work through your divorce. Once you’ve selected your Realtor®, remember not to take out your stress and anger on him or her. He or she has nothing to do with the divorce and is trying to help you. Take his or her advice. They are the professionals and know more than you do about selling your home. The following parts of the book are a helpful guide on how to present your home in the best light and how to avoid costly mistakes, especially when it comes to negotiating.

CHAPTER 4 The 80/20 Rule

In 1906, an Italian economist, Vilfredo Pareto, found an intriguing correlation. He noticed 20% of the pea pods in his garden held 80% of the peas. Studying the peas prompted him to take a closer look at this ratio. In one of his initial discoveries, he found 80% of the land in his area was owned by 20% of the people. After a detailed study, he observed this ratio held true in many aspects of life. The Pareto Principle, or the 80/20 rule, is the result of his findings.

For example:

• 80% of your income is derived from 20% of your work. • 80% of a business’s income is derived from 20% of its customers. • 80% of your value to an employer is derived from 20% of your work.

BUYER’S STORY

When Vince and Sue were shopping for a new home, Vince wanted an ocean view. They looked at many desirable properties but didn’t find any that were right for them. Some were overpriced; others had obstructed views. The search went on for almost a year, until they found an older home a short walk from the ocean. The neglected exterior and dated interior were not encouraging, but when Vince stepped out onto the third-floor balcony off the 22

master suite, he was sold. Any shortcomings in wall color or fixtures faded away when he took in the view. He could now see the sunrise from his bedroom window every morning. What 20% of the home caught the eyes of Vince and Sue? The magnificent third-floor view of the ocean! SELLER’S STORY When Cam and Kate listed their home, they needed a buyer who wasn’t concerned that the house was on an unpaved road. Though the home was over 10 years old, the interior was updated with fresh, neutral wall colors and carpeting to look brand new. The towering trees and established yard gave the home a welcoming appeal. The buyers had also looked at a home within miles of Cam and Kate’s that had towering trees, as well as a koi pond and patio. This home was comparable in interior and exterior, but it was on a busy street. What 20% of the home caught the buyer’s eye and prompted him to choose Cam and Kate’s home? The buyer loved the secluded country feel of the home. The 1.8-acre property was surrounded by pastures, with grand oaks dotting the landscape.

CHAPTER 5 Relating the 80/20 Rule to Home Selling

Understanding this concept can save you time and frustration in selling your home. When you use the 80/20 rule, you stop trying to sell people on the entire home. In applying the rule, you can highlight the 20% of your home’s features that make it special. The remaining 80% of your home still affects the buyer’s decision, so you don’t want to neglect it, but you also don’t have to spend a lot of time or money to improve it. Your selling point won’t be the common features your home shares with the other properties on the market. Focus on your home’s unique features to grab the attention of buyers.

THE 80/20 RULE IN ACTION: BUYERS ARE SEARCHING FOR UNIQUE FEATURES

Spotlight the unique features of your home that set it apart from others on the market. You will attract interested buyers who are willing to pay the asking price. What does your home or property have to offer that other homes in the area do not? Perhaps you have a relaxing patio or lush landscaping that will catch a buyer’s eye — whatever you find, play it up, and the house will move.

POTENTIAL UNI AL UNIQUE FEATURES

• Hilltop views. A high vantage point that comes with a spectacular view of the surrounding area. 24

• Wildlife. Many enjoy the beauty of being one with nature by watching birds, deer, and butterflies from their back porch. • Majestic views of sunrise/sunset. There is nothing more awe-inspiring than bearing witness to the beauty of the colors of sunrise and sunset from your own backyard. • A beautiful patio. Outdoor living is important to most buyers. A good-sized patio big enough to host a summer party might be just what your buyer is seeking. • Location, location, location. Emphasize the safety, convenience, and future of your home’s location. Today’s buyers want great schools, easy commutes, and local amenities. Some will pay extra for a home based upon its location, especially if it has a yard area. A buyer once paid extra for a townhouse simply because of its location in the complex. Most of the surrounding homes did not have yards, but a few shared a half-acre “yard area.” An owner whose townhouse bordered this yard area was able to sell his home for a higher price than other townhouses on the market. His home had a characteristic shared by fewer than 10% of the others. He had the only available listing offering that feature. With this attractive point of difference, the house sold for a higher price. Another townhouse seller in the same complex found a different unique feature. Although he did not have a yard, he was still able to use his location to his advantage. His property backed up to a lake and fountain. This unique feature helped him sell his townhouse quickly and for a great price.

• A private location. Homes that sit far back on the lot, next

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