Over 2.4 million couples spent on average $33,391 to get married in 2018 – an all-time high average cost of a wedding, according to The Knot. But the American Psychological Association says that about 40% to 50% of them could end in divorce. “Love and marriage go together like a horse and carriage,” Frank Sinatra used to sing, but before the last chord strikes, almost ten married couples would have decided to split up. Every 13 seconds someone, somewhere, files for divorce. As a result, partition lawsuits put real estate agents to work and open a new market for certified real estate divorce experts.
Whenever you search online listings, you should know that properties coming on the market are probably there for one of the 3D reasons: death, debt or divorce. However, only real estate properties purchased during marriage by any one of the spouses are subject to partition. Of course, you don’t see the reason why a certain property is for sale, and the real estate agent may not always disclose it. The home seller’s marital status is usually overlooked. However, it is up to the real estate agent to decide if this information should be disclosed or not because this is a vulnerability.
Americans postpone their weddings more and more. According to the U.S. Census Bureau, in 2017, the average age of women at their first marriage was 27.4 years, while men wait almost 30 years to tie the knot. We are inclined to believe that marriage at this age is a more responsible decision. However, first marriages usually end after eight years.
But in 8 years two people usually accomplish a lot together. For many couples, their home is the most expensive asset they have ever bought on this Earth. It is a place where they have gathered memories and made plans. They both dreamed of raising a family together. But for some reason, things didn’t work out. Half of the kids will see their parents go through at least one divorce.
The top three reasons for divorce are infidelity, financial problems, and lack of communication. If forgiveness is hard, coming with more money at the end of the month is even harder. And what couple finds it easy to admit they have a problem and go to couples therapy to save a sinking ship? Besides these reasons, some couples become distant and lose the excitement. They fail to reinvent themselves by skipping Valentine’s Day and ignoring one relationship milestone after another. This indifference predicts a not so happy ending.
Buying real estate from a divorcing couple
Dealing with a homeowners’ divorce when purchasing real estate is not the most fortunate context. Home buyers might be surprised to find out that divorce and real estate are connected. Here is what you might find out sooner or later:
- The decision to sell the property was not taken jointly. The other spouse might not agree with the sale and would try to stop or harden the process.
- The acceptance of a low offer degenerates in fierce conflicts, threatening a potential closing.
- The price of the property might be way above its market value. The couple would like to purchase two individual homes after the sale, and they couldn’t come up with a better idea.
- One spouse could buy the other one out, and keep the house. In this case, the sale will be called off.
- The couple decides to make up and start all over again. It might be for the sake of kids, or they just have read Love and Respect by Dr. Eggerichs or had last moment marriage advice from their close friends/loved ones. So second chances will cancel a sale, but at least it’s for a good reason.
Selling a house is more painful than selling a wedding dress worn only once, by mistake. During a break-up, one part usually suffers more than the other one so buyers shouldn’t add more insult to the injury. Don’t judge them! Some families parted ways after 30 years of marriage! However, there is a high chance that a low offer might be accepted if the couple is motivated to sell.
Dividing real estate in a divorce
Separating couples should try to sell their houses before the divorce decree is signed, especially in the case of an outstanding joint mortgage to which both are bound and must pay off together. Selling a house after the divorce is granted could be more difficult and overwhelming emotionally because one might not want to deal with the other anymore.
What makes things worse is that, after divorce, even if one of them is removed from the property deed, they both continue to have a mortgage, so it will be harder to qualify for a second mortgage and other different types of loans.
Before dividing real estate in a divorce, both parties should distinguish between separate property and marital property.
Separate property is under the form of goods and money owned before marriage: a house or a condo, an inheritance received either before or after the wedding, any gifts and any “pain and suffering” payment from an insurance company.
Marital property includes all the goods acquired during the marriage (income, assets, and pets). Pay attention that some separate property can become marital property so you should better talk with a divorce attorney before you transfer any money to a joint account or before adding your spouse as co-owner of a property. Dividing real estate during a divorce is a hard process because it amplifies the loss you feel. And if you own a pet together, you will have to decide who gets to keep the pet, too. Custody battles for a pet are not uncommon. The law treats pets as property so it does matter who purchased the animal, who took care of it and paid all the bills, and who will be able to provide the best future for their companion animal.
Not only assets get divided during divorce. The burden of debts is split too. However, it is wise to inform yourself regarding the legal approach in your state. If you are living in one of the following nine states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, then you are living in a Community Property state. This fact means that you will get an equal share from everything (50-50 split).
In the remaining 41 states, Equitable Distribution prevails and this means that you will get an equitable share, which depends on a few variables such as age and health, the ability to provide stability for children, income, assets brought into the marriage.
Now that you know all the above let me tell you that more than 90% of couples settle things out of court. It is better if you can avoid partition in court because it not only takes time, but it also costs more, and you both might end up with less.
Forcing a partner to leave
It was a cold January day when Hannah, our neighbor, packed all her husband’s clothes while he was at work, called an acquaintance to pick her up and take her to leave the clothes at his childhood house in a rural town, 40 miles away. Then, she changed the locks on the door and hired an attorney. She threw her husband out of the house in the middle of winter without notice. They had been married for 30 years, and their son had gotten married only one year before. She then tried unsuccessfully to request a restraining order. Her husband has never hit her, but he did have a filthy mouth.
They were paying a mortgage together for the condo they were living in. Hannah kept saying that she had been making all the payments herself (which was not true), so her husband had no right to live there. I soon found out that Hannah had been having very high levels of blood sugar – she kept denying her diabetes for years – and was facing a lot of stress due to the very high monthly payments she got on a mortgage contract she had signed alone, which she had never actually read word by word. Her husband would find a reason to accuse her every day, so I think that their fights have been a form of psychological abuse – the hardest type of abuse Hannah could have provided evidence for in front of the judge. She went the “better later than never” route.
If that condominium had been her separate property, then she would have had the right to ask her husband to leave but not before the divorce became final. There was a link between divorce and real estate in her case too. Hannah’s financial situation rapidly declined after divorce and had to sell the condo.
Who gets to keep the house after divorce if minor children are involved? If a prenuptial agreement has been signed before the wedding, then it should be pretty clear. The custodial parent should have more resources to support him/herself and the children, so will probably get to keep the house. However, courts’ decisions vary greatly.
The parent who gets custody will decide the main aspects of a child’s life: education, health, religion, and place of living (legal custody). The court follows the child’s best interest. If the child is over 12, the court will take his/her preferred option into consideration. There are cases when one parent gets to keep the house, but not the children. Mothers are usually favored in custody battles but not always.
The remaining parent could be entitled to receive alimony, while the child support is mandatory for minors. Courts also talk more about a Parenting Plan rather than visitation and custody in an attempt to maintain the child’s emotional balance, even though nobody knows the inner turmoil of a child…
The drama of single-parent families
As you can see above, kids play a crucial role in divorce and real estate. Sometimes, the parent who retains custody of the kids will want to buy the other one out and continue to live in the same house to minimize the stress felt by the child. Such a purchase is not always possible, because many single parents don’t make enough money and can’t afford to pay the mortgage so would rather downsize. There is a frightening link between divorce and real estate due to the vast number of one-parent families.
24% of households were females with children under 15, according to a 2017 UN report Household Size and Composition Around the World. In the United States, there are more than 11 million one-parent unmarried families, and little over 80% (9.5 million) are divorced/single mothers with children. A third are living on the brink of poverty and lower – out of 3.1 million one-parent families, another 1.5 million have annual incomes lower than $10,000. Susan Clampet-Lundquist from the University of Philadelphia, in a 2003 study published in the Journal of Sociology and Social Welfare, points out a few housing issues that single-parent families face: “Within the constraints of an affordable housing shortage, women told me how they struggle to share housing with others, rehab abandoned properties, live in substandard housing, and remain in unsafe neighborhoods.” The scarcity of cheap housing paired with discrimination makes life harder for African-American and Latino single-parent families. In a more recent study titled Poverty, Homelessness, and Family Break-Up released by Child Welfare in 2018, the authors found that family disintegration is associated with poverty and homelessness. Another consequence of divorce is an elevated rate of foster care placement and more or less formal child separation.
According to the US Census Bureau, 28.4% of single mothers were unemployed or not in the labor force compared to only 20% of single fathers. These numbers are yet another evidence that divorce puts a higher financial pressure on single-parent families. Cohabiting is also on the rise – in 2017, 7% of children were living with cohabiting parents. But the good news is that most of America’s children – 73.7 million under 18 (2016 numbers, to be more exact) – live with two parents.
The correlation between divorce and real estate is undeniable. It not only keeps divorce attorneys busy but increases the demand for real estate divorce experts who can provide the best advice and assistance to couples dividing real estate/assets in a divorce. They could also help unmarried parents find affordable housing or temporary family shelters. It is an excellent career shift for real estate agents who haven’t found their real estate niche yet. After becoming a Certified Real Estate Divorce Expert, they can easily reach this market using many online and offline marketing tools. Most Realtors® are not prepared to deal with divorcing couples, so this additional specialization could only help them achieve their sales goals while standing out of the crowd.