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Divorce & Selling

Unfortunately in this day and age, divorce is becoming more and more common. Especially if it’s the 1st divorce for a person, there is no clear understanding of what is entailed in selling the property. It’s an emotional and stressful time when people make assumptions without being educated – on timing of money, on buying out a partner, on selling price…on so many things.

It’s our job as a Realtor to educate both parties…and keep the temperature down!!

Most real Estate Agents have dealt with divorcing clients, but at Neglia Garami, both Krisztina and Rita have experienced divorce personally and have sold their matrimonial homes. They have also helped over 40 Clients sell their matrimonial homes. They have the experience and the compassion to help you through this difficult process.

1. MAKE SURE YOU HAVE A SEPARATION AGREEMENT

Or a Side Agreement specifically regarding the matrimonial home that is SIGNED by both parties. And if a Lawyer is not involved, this agreement MUST BE SIGNED IN FRONT OF A NOTARY. You don’t want 1 party attacking the agreement later on in the proceedings.

If you don’t have either of these Agreements, you can legally sell your home BUT the PROCEEDS WILL SIT IN A TRUST ACCOUNT with your Real Estate Lawyer until such time as an Agreement is signed. So please do not assume you will get the money from the sale right away.

Krisztina sold her matrimonial home without an Agreement in place. She knew the money would go into a trust, but she felt they should take advantage of the market at the time and she was confident her ex-husband would be motivated to get a Separation Agreement in place quickly. However we typically do not advise this.

Rita took almost 2 years to get everything in place before she could put her matrimonial home on the market as her Separation Agreement was more complicated. There were many times she wanted to list the home, but she couldn’t.

2. DON’T ASSUME YOU CAN BUY OUT THE OTHER PARTY

Both of you will have to re-qualify for a mortgage and with the 2018 Stress test in place (see our Financing Video), you MAY NOT QUALIFY.

And keep in mind neither party can buy a new property until you have the Separation Agreement in place stating Spousal Support and Child Support as this will influence what you can afford.

In Rita’s case her husband wanted to buy her out of their home and they proceeded for many months on that assumption until the Agreement was in place and the numbers were crunched. Then they found out this was not feasible.

We also had a Client who had her parents step in to guarantee the mortgage and help her buy out her matrimonial home. But even that may not work in today’s market with the Stress Test.

Most importantly, talk to a Mortgage Broker to know what you can qualify for and eliminate any surprises.

3. HIRE A REAL ESTATE AGENT BOTH PARTIES ARE COMFORTABLE WITH

You are going to have to have full honesty and full disclosure with the Agent you choose. And they need to fully understand your situation. Don’t hesitate to involve your Agent early in the process. For us, we often advise divorcing clients months before the property goes on the market. As a Team, we ensure that we can provide a buffer between the divorcing parties, sometimes even having each of us deal with a different spouse. We want to make sure we represent you equally. And the best part with us? We can provide what you need based on personality…one of us handles emotions better, the other is more rational. What could be better!? And then we can separately help each party purchase a new home!

We don’t take sides.

4. PREPARATION OF THE HOME FOR SELLING

If 1 party has moved out of the home, we make sure that Property Staging still reflects unity. An educated Buyer Agent might figure out that this is a Divorce situation – this will give them extra power that they can use in their negotiating. So….we make sure both party’s clothes (at least some) are in the closet, both party’s toiletries are in the bathroom, furniture and art reflects a couple etc.

We have brought our own personal clothes into homes at times. We also have been known to call in the morning to make sure the spouse currently in the home remembers to make the bed, turn on lights, throw out pizza boxes, put stuff in laundry bin etc in case there are showings. (We get it…some partners are messier than others, some people may be fighting stress and depression. From us…NO JUDGEMENT!!) We are happy to do some hand-holding to get you through this.

5. WE COMMIT TO COMMUNICATE WITH BOTH PARTIES EQUALLY

Sometimes the relationship has devolved so much that the parties cannot even be in the same space anymore. But both of you need to be fully versed on all aspects of your home sale. You must ensure this happens. We have made sure to update some clients who were not in the province at the time, and some who were out of country.

There are times where we may ask you to ‘suck it up’ and present a strong united front – such as at a negotiation of offer. Krisztina did this with her ex-husband. No one would have guessed they could barely communicate at the time. And they ended up selling over asking.

We have gone so far as to get a Restraining Order temporarily lifted so that the couple could sit in the same room through the negotiation.

BOTTOM LINE CHECKLIST

• TALK TO YOUR BANK
• TALK TO A DIVORCE LAWYER
• TALK TO YOUR ACCOUNTANT

• TALK TO YOUR MORTGAGE BROKER
…and most importantly…
• TALK TO US, YOUR REAL ESTATE AGENT