Kathryn Hoffman - CDRE - BEST SELLING OPTIONS IN A DIVORCE

BEST SELLING OPTIONS IN A DIVORCE

BEST SELLING OPTIONS IN A DIVORCE

Kathryn Hoffman - CDRE

Table Of Contents

1.

Moving On

2

2.

Be Prepared

6

3.

Marital Settlement Agreement

14

4.

The 80/20 Rule

24

5.

Relating The 80/20 Rule to Home Selling

26

6.

Creating Curb Appeal

32

7.

Staging with Purpose

38

8.

Upgrade with ROI in Mind

46

9.

The Three D's

58

10. How to Market Your Home

64

11. Common Seller Mistakes

72

12. Avoid Costly Mistakes

76

13. Finding Buyers

82

14. Be a Power Negotiator

86

15. The Dos and Don'ts of Negotiating

92

16. Bargaining Chips

98

17. Serious Considerations

102

18. Ending Thoughts

104

Foreword

Dear Reader,

It has been my pleasure to know and work with Kathryn Hoffman since 2017 when our two companies merged into one. Immediately I was drawn to her warm smile and energetic personality. After just a few months of working with her I realized that she is a consummate professional, skilled in this business of Real Estate Sales. Her empathy and grasp of the human emotions involving a Real Estate Transaction has impressed me for the entire time we have worked together. I have witnessed her energy, her drive, and her striving to be both honest and fair to all parties involved. In transaction after transaction, she works for a win-win as an excellent negotiator! What started as a working acquaintance has developed into a respectful admiration and friendship for Kathryn. Having been a realtor for 36 years and a manager for 27 of those years, I can honestly say I enjoy working with, and beside her.

Agnes “Cookie” Hanson, Realtor Century 21 Circle Designated Managing Broker, CDPE, BPOR and C2EX

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About Kathryn Holistic Approach to Divorce Real Estate: Working Hand-in-Hand with Family Law Attorneys and You, Their Clients. Becoming a certified divorce real estate expert (CDRE) was more than just a personal journey of growth; it was a commitment to provide comprehensive and empathetic support to my clients during one of the most challenging periods of their lives. Recognizing the need for specialized knowledge and the desire to truly make a difference, I sought additional training to enhance my expertise and, in turn, be an invaluable asset to my clients during their divorce listings. In my quest to better assist divorcing couples, I understood that collaborating with family law attorneys was vital. Rather than viewing them as mere transaction partners, I embraced a collaborative approach, working hand-in-hand with family law attorneys to ensure a smooth and mutually beneficial process for all parties involved. Understanding the role of a family law attorney is critical to appreciate how our partnership can be truly helpful. Family law attorneys specialize in guiding clients through the legal intricacies of divorce, such as asset division, alimony, child custody, and support agreements. As a certified divorce real estate expert, my role complements theirs by offering insights and assistance specifically related to real estate matters. One of the key aspects of our collaboration is the exchange of information and open communication. By maintaining transparent communication channels, I can align my strategies with the family law attorney's goals for the clients. This enables me to tailor my real estate services to the divorcing couple's unique needs, whether it be selling the marital home, identifying

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new housing options, or valuing real estate assets. When couples face the difficult decision of selling their shared property, I work diligently to ensure the process is as smooth and stress-free as possible. I undertake comprehensive market analyses to determine the property's value, considering various factors like market trends, property condition, and location. Armed with this knowledge, I collaborate with the family law attorney to devise the best strategy that meets the clients' financial and emotional requirements. Another essential aspect of our collaboration is the preservation of confidentiality and privacy. I work as a real estate neutral. I am not on either "side". Divorce proceedings can be emotionally charged, and sensitive information must be handled with utmost care. I take great care to maintain the privacy of my clients while still providing the necessary information to the family law attorney to support the legal proceedings effectively. By approaching divorce real estate with a holistic mindset and working closely with family law attorneys, I can deliver the comprehensive support that divorcing couples genuinely need. My dedication to their well-being goes beyond closing a transaction; it involves being an understanding and reliable guide throughout their journey. In conclusion, my journey to becoming a certified divorce real estate expert has been driven by a deep desire to make a meaningful impact in the lives of my clients during their divorce listings. Through specialized training and a collaborative approach with family law attorneys, financial specialists, lending professionals, among others, I strive to ensure that each couple receives the support and guidance they need during this challenging time. By taking a holistic approach and acknowledging the importance of our partnership, I can offer a unique service that helps clients find not only the best real estate solutions but also a sense of closure and hope for the future.

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Testimonials & Reviews for Kathryn Hoffman

Here’s a list of people 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

In the one year experience with other agents, we had one so- called offer (it was a little iffy at that.) Kathryn put a plan together and suddenly things were happening. We started getting offers, and the house is sold. We were really satisfied with the outcome. We had kind of figured out what our bottom line needed to be and were really excited that we came above our bottom line. We were out-of-town sellers. Our daughter lived in the home when she was going to school. When the prior agents couldn’t sell the house, it was hard for a year to make those mortgage payments with other kids in college. If you want your home sold quickly, you need to talk to Kathryn. She has some great ideas on how to sell homes quickly. I would listen to her advice and take it to heart. She truly looks out for your best interests in a kind, but firm way.

Seller #2

Please forgive me for taking so long to write this letter to you. As I’m sure you can understand, moving a household and a business is quite the task. The reason for this letter is to share with you mine and my wife’s experience with our agent, Kathryn Hoffman. ix

About one year ago, my wife and I decided to pursue our dream of moving here. We purchased 10 acres of land back in 2007 and felt now was the time to make our move for better business opportunities in the greater Chicago area. We had subscribed to the local newspapers and had it mailed to us in Tennessee. Kathryn was a referral from our Realtor in Tennessee. My wife and family were living in another country while I wrapped up loose ends with my business arrangements to move to Illinois. I must admit, we were really impressed with Kathryn. Not only for her phone calls, emails and text messages, but she never was rushing us, and seemed to understand that it would be some time until we actually purchased something. As time went on, she never reached out too often, but always stayed in touch and offered her services. Kathryn helped me from start to finish in securing the dream home for my family (without my wife ever seeing the home in person before purchasing) and getting the deal done. Now came the sweet part. Because of simple little things like follow-up phone calls, patience, and eagerness to help her customers, Kathryn is our go to agent. Kathryn was not the first agent we had talked to but she was the last. We were totally amazed at the professionalism, expertise, patience and kindness we were shown. Kathryn will be our agent for as long as we need one, and that does not happen often in this industry.

Seller #3

I am so grateful to have found Kathryn Hoffman. Selling a home can be so complicated anyway but going through a divorce changes the game quite a bit. Communication and timing is

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trickier. Emotions are even more amped up and the decisions to be made can be completely overwhelming. It takes a very special person to hang in there with us for as long as she has. She has lifted so much of the burden for me and has been so gracious and respectful of both my husband and I in navigating what could be a very very messy situation. Her honesty and her integrity is not of this world. Her genuine heart for people seems to come before anything else. She has not only been my advocate but my friend and I have been able to let go of the worry knowing I can completely trust her judgement and her highly professional abilities to take care of all the details. This could have been a nightmare but Kathryn has been able to create peace, cooperation, and resolution in an otherwise impossible situation. She is just an amazing human being and I am eternally grateful to have found her

Seller #4

My house was a short sale. This means that I owed more than the home was worth. The traditional real estate agent wasn’t able to help me. I’ve been a real estate agent, we tried other real estate agents, and it didn’t work. Having been an agent myself and invested in properties, I was very familiar with short sales and all the various ways of doing it. I got frustrated turning it over to another local real estate company. I felt like I had to try and fill them in on the knowledge and process about short sales that they did not have. It was experience with short sales that got my property sold. You are simply not going to get your short sale taken care of using the traditional real estate methods. Kathryn's expereience and patience really paid off. She knew who to contact to get the job done!

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You need somebody like Kathryn that really can combine all the angles and get the job done. I was an agent myself and had a property in the $400k+ price range that I couldn’t sell myself. Then, because of personal issues, I turned it over to another brokerage in town. They could not get anything done with it. Having met Kathryn a couple years before then, knowing that she knew all the things she knew about the real estate market, I decided to turn it over to her. She got it under contract very quickly, and the home closed successfully.

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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.

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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.” Illinois is an Equitable Distribution state. 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.

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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.

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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

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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

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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

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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

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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.

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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. I would highly recommend settling out of court. Conflict is expensive. 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

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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. Covid greatly restricted court dates. Many, if not most, are still zoom court appearances. Illinois courts are typically backed up anyway. Some counties more than others. 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.

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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. Please consult your Realtor on steps to list the home in a reasaonble time frame and at a reasonable price. Your attorney and the judge for your case are NOT real estate experts. Your home may need repairs for the buyer to obtain a mortgage. If the home is in need of significant updates or repairs, this will limit the pool of buyers in the marketplace. You can set any price you want of the listing but the buyers out in the marketplace determine the eventual selling price by comparing your home with others they have viewed. If a buyer is obtaining a mortgage, the lender will not allow them 14

to purchase an overpriced home without additional negotiations between seller and buyer - or the buyer can walk away from the sale if they do not have cash to bring to the closing table to cover the difference. As a Certified Divorce Real Estate Expert (CDRE), I have resources and the expertise to communicate with your attorney for the best timeframe to list your home. 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 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.

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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(a mostly negative feature in the midwest), 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 because of the recession and foreclosures, 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?

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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 provided by their Realtor®. 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.

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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 REAL GHT REAL 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. As a CDRE, I am a trained neutral. I have extensive education to handle the emotions of the transaction. I do not favor one party over the other. My job is to the home and have BOTH parties(also considering the welfare of the any children involved) move forward in their life. Most agents are use to working with happy couples looking forward to their move. Whether your divorce is something you wanted or are fighting to not occur, it is fraught with emotions, and decisions have to be made according to the timing of the court. A traditional realtor, especially if they have never experienced a divorce themselves, can not understand the issues that arise between the parties. There are Realtors® who focus specifically on helping people who are going through a divorce. They are known as Certified Divorce Real Estate Experts. I am one of those agents. 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

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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 CDRE, 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®

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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? (This might be skewed in a HOT market however.) • 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

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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.

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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.

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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 24

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.

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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 26

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 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.

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• 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% D N 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 backyard. If you have a garden, work on it every day to make sure it is the most beautiful on the block. Every house has 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. 28

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