How Do You Overcome The Challenges of Selling a Home During a Divorce? Mediate!
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Selling a home can be fraught with emotion under the best of circumstances, but add the dissolution of a marriage into the mix and you can really complicate the process. The role of “mediator” is one a Realtor can probably relate to, as it’s a hat they frequently find themselves wearing. Today we’re talking about family law mediation, and how that process can help people avoid some of the common pitfalls of selling a home during a divorce.
Here’s a scenario: the divorce is finally settled, and the judge’s decree has the couple splitting the proceeds from the sale of the family home 50/50. Great. Who decides who gets to choose the Realtor? Should they stage the house or not? Do upgrades to prepare, or sell as is? How will they settle on a price? When they get an offer, what if the couple can’t agree on whether to take it? These disagreements could go on and on indefinitely unless they are set out in the divorce decree. But a judge is not a Realtor — and even the savviest jurist can’t predict every issue a couple might face while selling the family home.
Selling a Home During a Divorce? Mediate!
This is where working with a mediator could be helpful. During mediation, an impartial person, the mediator, facilitates communication between the parties to promote settlement and understanding without imposing her own judgment on the issues. In this scenario, the mediator would assist the couple in negotiating the detailed terms of the sale and (ideally) eliminate the need to go back to court. If they have to return to court, that will cost considerably more time and money, likely causing further damage to their relationship, which impacts not just them if they have children together. In the most extreme post-divorce real estate disputes, the judge might appoint a disinterested third party called a Receiver to oversee the sale of the property without any input from the couple.
Dallas Mediator and Family Law Attorney Lindsay Barbee explains, “A mediator’s job is to assist the parties in customizing the terms of their legally binding agreement, typically with the assistance of their legal counsel, so they can avoid all the pitfalls of protracted litigation.”
Of course, a preferable scenario would be that our theoretical couple never ends up here to begin with. Barbee was the one who posed this scenario and told me about divorce decrees typically being too vague with regard to real estate.
“If they’d gone to mediation first, they might have avoided court altogether and saved money, time, and heartache,” Barbee said. “Even after a successful mediation, the couple might disagree about a particular scenario they didn’t contemplate at mediation, which isn’t uncommon given the ever-changing state of the housing market. But even if a conflict arises in the future, going back to mediation to resolve the disagreement is a lot easier than going back to court.”
And Barbee would know. After a decade and a half serving clients as an advocate in divorce and child custody litigation in North Texas, she decided to start a mediation practice, having come to “the conclusion that the majority of families benefit most from resolving their disputes outside the courtroom, on their own terms.”
How Can Realtors Help?
Realtors aren’t allowed to give their clients legal advice. But if they are aware of a pending divorce, they can advise their clients what types of things to tell their lawyers will go into the real estate transaction that should be taken into account in the decree. If there is already a decree in place, Realtors should ask to see it so they know what terms exist, and can set up some agreements, preferably in writing, with the clients ahead of time to avoid future conflicts between the divorced couple.
I spoke to Lorraine Hursman with Coldwell Banker, who gets a lot of referrals from lawyers and therefore works with divorcing couples with some regularity.
“The divorce decrees are often super vague,” Hursman agreed. “Anyone can stand in the way of any small thing. Everything can be a battle.”
Hursman said that mediation is an important tool when divorce is at play in a real estate transaction. She said when the couple is at odds, it’s crucial that the terms be laid out in writing down to the specifics, and mediation is a great route to go because the couple can’t be constantly running back to court.
“It’s a complicated field, but it’s a passion of mine because I’ve been there. I try to make it the smoothest process possible, but you can get into some tough situations … I often discount my fees because I know how expensive it can get,” Hursman said. “I can remember this one single mom who was paying out for everything, and the dad wasn’t helping at all. I paid for all the repairs on the house. It’s hard.”
I asked her if she ever communicates with her client’s attorneys directly. “I try to intercede with the attorney well before it goes to Receivership because that can be really harmful. Not all, but – [the court appointed receiver] can really sell low, and you don’t have someone advocating for you to get the best result. I’ve been able to save that from happening before.”
Studies have shown that executive functioning — the part of our brains responsible for rational decision-making — suffers during times of emotional stress or trauma. Two of the top five most stressful times we go through as adults are divorce and moving, so it’s to be expected that people are not at their best when selling a house during a divorce. Learning about what mediators do and how they can help with the process is just another tool in a Realtor’s toolkit for guiding their clients through a challenging time.
