Bob Adelfson - Divorce Book

BEST SELLING OPTIONS IN A DIVORCE

Bob Adelfson

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. DISCLAIMER AND/OR LEGAL NOTICES: While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/ or local laws or regulations. The reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the reader. The Author and publisher assume no responsibility or liability whatsoever on behalf of any reader of these materials. If your property is currently listed with a Realtor, please disregard this notice. It is not our intention to solicit the offerings of other brokers. Printed in the United States of America

Table Of Contents

Moving On

Be Prepared

Marital Settlement Agreement

The 80/20 Rule

Relating The 80/20 Rule To Home Selling 24

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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18. Ending Thoughts

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Foreward Fortunately, not all marriages end in divorce...unfortunately, some do! When the divorcing couple owns Real Estate, there are potential issues that can arise, including (but certainly not limited to): • Incorrectly assuming that removing one spouse from "title" also automatically removes them from any obligation on the mortgage loan secured by that property. • Incorrectly assuming that the "House Spouse" (the one who remains in the marital property) is able to refinance the joint mortgage loan solely in his/her name. • Carelessly assuming that the property has a clear and unclouded title history. • Carelessly assuming that an online value estimate (or in some cases "zestimate") is accurate when agreeing to settlement terms. • Failing to freeze the ability to draw on a Home Equity Line of Credit (HELOC) attached to the property when finalizing settlement terms (allowing the potential for an unethical spouse to subsequently draw up the balance and erode the equity). • Failing to ascertain if any undisclosed judgments and/or liens are about to be filed to one/both of the divorcing Spouses The above examples are merely a drop in the bucket on what can go wrong when Divorcing Homeowners make binding legal decisions when all the facts are not known beforehand. Among the consequences for making these mistakes include (but are not limited to):

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• " Out Spouse" (who moves out of the property) is unable to purchase a new home due to the inability of the "House Spouse" (who continues to live in the property) to secure a refinance of their jointly held mortgage. • "Out Spouse" suffering declining credit ratings and potential lawsuits for failure to make timely payments on the "marital mortgage" that was never refinanced out of his/her name (despite the fact that the "Out Spouse" has not lived in that property for months/years). • Potential of foreclosure on the marital home due to inability for "House Spouse" to make payments post- divorce, which results in a significantly negative credit report for both Spouses who guaranteed repayment of the loan prior to divorce. Divorce Attorneys sometimes have gaps in their case files and advise and/or allow their Clients to make these decisions without all the facts. Highly trained Real Estate Professionals who have their RCS-D designation can help these Divorce Attorneys and their Clients make more informed decisions! The goal of the RCS-D designation is Consumer Advocacy. While business might be derived at times, true RCS-D Professionals aim to provide useful "pre-settlement guidance" to Divorcing Homeowners and their Attorneys in the spirit of doing the right thing (regardless of whether a commission is attached to the guidance). We all know emotions run high when buying/selling a home. We can also deduce that emotions run even higher when going through a divorce. Imagine the emotions when combining the 2 together! Suffice to say, we humans make much better decisions when utilizing facts as opposed to assumptions and/or emotions.

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About Bob

Bob Adelfson is an Arizona licensed real estate sales agent and a Real Estate Collaborative Specialist – Divorce (RCS-D™) focusing on Consumer Protection in Divorce & Elder Real Estate. Less than 1% of licensed real estate agents nationwide hold this designation. Bob is professionally trained by Professor Kelly Lise Murray, a graduate of Stanford and Harvard Law schools, and the lead investigator/faculty for the National Family Court Project on Housing and Financial Justice. Bob is trained to neutralize divorce real estate, treating the house as a business transaction, acting in the best interest of the house – and each divorcing spouse. Leading your divorce real estate team, Bob serves as a project manager working with you and your lawyer to help gather house critical documentation which helps serve as essential evidence of your house value. Such additional evidence is needed during your divorce process, especially before any property negotiation or mediation. Bob’s team includes professionals in mortgage, title, insurance, home inspection, and appraisals. In addition, Bob also holds multiple real estate designations including: • Seniors Real Estate Specialist • Pricing Strategy Advisor

• Accredited Buyer's Representative • Certified New Home Co-Broker

Testimonials & Reviews for Bob Adelfson I would definitely recommend Bob Adelfson to anyone looking to purchase or sell a home he is very professional, available, knowledgeable. Thank you For all of your help Mr. Adelfson, We had a very smooth transition and are very happy with our purchase! Jeff K - Phoenix, AZ My wife and I chose to use Bob Adelfson as our Realtor for both selling our old and house and purchasing our new one. Our experience with Bob far exceeded our expectations. He was knowledgeable and more importantly, he was available whenever we needed him or had a question. On one occasion, our family had to leave town for a wedding during the final days of closing on the house we were selling. During the final walk-through, the buyers found a couple of things they didn’t like and a water pipe outside started leaking since the time we had moved out. Bob took it upon himself to do a few repairs for us and coordinate with a plumber to fix the pipe while we were away. Because of Bob, the sell went through perfectly as planned. I don’t know what we would have done had we not had Bob on our side. If you are looking for a realtor that will actually care about your family and your needs, a realtor who will be tough during negotiations and fight for you, a realtor that will make you the priority rather than his own commission, Bob is the right choice for you! I would recommend him to anyone! Lucas K - Gilbert, AZ

Bob Adelfson handled a very difficult sale with professionalism, patience, and efficiency. So glad I had him there to help me through it all. Thank you.

Ann G - Queen Creek, AZ

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” has long been a source of comfort for many throughout history, including Abraham Lincoln, the English poet Edward Fitzgerald, and the writings of the medieval Persian Sufi poets. It’s a simple phrase, but 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 very 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 your 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 to 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 him or her 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 all information regarding your home insurance, property taxes and liens, mortgage and marital debts, and marital assets to your lawyer. 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

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 may not 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 it 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 $100,000 and there’s another $100,000 in equity, one- half of the equity ($50,000) would be due the selling spouse and $100,000 would be required to pay off the principal. The refinanced loan would have to be at least $150,000. 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 upcoming chapters 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

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, 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 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 of your home. These are used in property settlements and may differ from what you perceive as your home’s worth.

COMPARATIVE 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, less 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, and 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 thousand 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 RIGHT 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 trained in legal and tax aspects of divorce that even most divorce lawyers don’t know.

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 who 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? 19

• 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 businesspeople. 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 chapters 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 master suite, he was sold. Any shortcomings in wall color or 22

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 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 24

willing to pay the asking price.

• Hilltop views. A high vantage point that comes with a spectacular view of the surrounding area. • 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 and stillness of the colors of twilight and sunset from your own back yard. • 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 in the complex, 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 25

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 to an empty lot, or partially concealed by trees appeal to buyers who want to unwind away from the sight and sound of neighbors and street noise. • A big, shady backyard. If you have a larger backyard than your neighbors do, use that to your advantage. People like to have extra room for kids, pets, and entertaining with lots of trees for shade. • A fenced in backyard. People with kids and pets flock to homes with fenced in backyards. • Additional unique attributes. You can also market a finished basement, large attic, an extra-large garage, swimming pool, hot tub, or anything else that makes your home stand out.

CAPITALIZING ON THE 20% DIFFERENCE AND MARKETING YOUR HOUSE'S BEST FEATURES

Follow the 80/20 rule and you will stop wasting time showing your home to people who are not interested. Instead, you will be showing your home to buyers who are motivated to make a purchase. You won’t have to show so often and you won’t have to sift through lowball offers from casual shoppers. Take the time to uncover your home’s most attractive and unique features and make sure they shine. Compare your house with others in the neighborhood to see what makes yours stand out. If it’s a backyard pool, make sure it sparkles. If it’s a veranda- style porch, clean off the grime and make sure it overlooks a well- manicured back yard. If you have a garden, work it every day to make sure it is the most beautiful on the block. Every house has 26

potential. It just takes a little creativity and elbow grease to get the unique features to stand out and draw the attention the 80/20 rule demands.

HOW THE 80/20 RULE APPLIES TO HOME SALES

An out-of-town home shopper with no specific requirements contacted a real estate agent to look at available homes for sale. The agent drove him from house to house. In each case, the buyer suggested offers 10% to 20% below the asking price without budging. As the day progressed, the agent’s chances of finding a suitable home were dwindling. They stopped at one last house as the sun set. The exterior of the house was dated and the yard untended. This agent and her client had spent the entire day looking at houses that shared 80% of the same features. Nevertheless, once the buyer walked into the room, he wanted to buy the home for asking price. What set this house apart from the others? He wasn’t too interested in the kitchen, bathrooms, and bedrooms. A bedroom was a bedroom as far as he was concerned. He fell in love with the one remarkable feature of this otherwise uninspiring house. The house sat atop a hill with a beautiful view out of a large picture window. As they entered the great room, the sun was setting below the distant tree line. That view sold the buyer. The remaining parts of the home could be improved. The home buyer based his decision to buy on the window view from the hillside. The 20% of the home’s features motivated him to offer full price on the spot. Such is the power of the 80/20 rule. In some cases, the 80/20 rule may help people make a sale without even conducting a showing. The house in the following example had languished on the market for months. Unlike the previous

home, this one was not unattractive.

On the contrary, it was a brand-new, custom-built home. It sat on the market for over seven months without a single offer. The builder hired a real estate agent who knew the importance of finding that one special feature. He drove out to give the house a thorough investigation. He discovered what the property had that the competition did not: a beautiful five-acre yard. Other houses being sold in the area were on one- to two-acre lots. Not only was the yard bigger, it was also more private than other properties. The real estate agent marketed the property highlighting the five acres alongside the description of the house. Because the house was no longer the main selling point, interest in the property increased. A buyer was so interested that he submitted an offer from 1,000 miles away. Fearing that someone else would buy it before he could, he bought it sight unseen. He didn’t want to lose out on his “perfect” home. The sale was completed in 45 days. The builder was amazed! His house had been on the market for close to eight months. That small percentage of the home’s features was the selling point. The 80/20 rule unfolds again. Learn how to apply this rule by leveraging a unique selling point, and you will not have to settle for less than your asking price. Buyers who fall in love with a home rarely offer a lower price. By shifting focus to the five acres, the real estate agent captured the interest of buyers immediately. The house was no longer unsellable, but desirable.

CHAPTER 6 Creating Curb Appeal Curb Appeal — The attractiveness of a property for sale and its surroundings when viewed from the street. Whether viewing an online photo or driving by your home, a home shopper will decide in a matter of seconds whether or not they want to see more. First impressions are powerful, and, as they say, you don’t ever get a second chance to make a first impression, so creating curb appeal is crucial to generating interest in your home. Curb appeal is so powerful a selling tool that your well- prepared house may even catch the attention of buyers who weren’t attracted by the written description of your home. Conduct an experiment. Take a drive around your neighborhood and the surrounding area to see what homes appeal to you. Homes with clean yards and groomed lawns will be more impressive than homes with cracked paint, loose shutters, uncut grass, and weed overgrowth. The outside appearance of your property should serve as an invitation to come inside. Potential home buyers are drawn to welcoming entries and uncluttered yards. Would you be attracted to a home with dead shrubbery and a weather-worn exterior? You may assume that the home is neglected on the inside as well as the outside. Herein lies the importance of curb appeal. When you drive up to your home, take an objective look and inventory the things that need attention. With simple improvements like weeding, trimming, and window washing, you can improve the appearance of your home in an afternoon. Low-cost investments like power-washing the house and concrete, repainting trim, and adding landscaping also add to your home’s

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