If you’re ready to file for divorce, it’s important to understand what role this will play in the process of selling or buying a house. There’s certainly strategy to be aware of when approaching divorce and real estate, which is why we invited realtor and principal broker, Joe Fustolo, to sit down with us to discuss important tips for all couples to consider when selling or buying a home before, during, or after a divorce.
Within the real estate profession, it’s understood that there are six big motivators when selling a home—three negatives, and three positives.
“If you look at the three big negative and positive motivators for people moving, they’re the exact opposite of each other. It's death, divorce, and losing a job, or getting married, having babies, and getting promoted. They're all catalysts for people moving, and you don't always get the choice to sell in the best, highest market, and purchase in the lowest market. You sell when your life requires it,” says Fustolo.
So if life has dealt you one of the three big negative motivators for moving—divorce—what’s the strategy behind the timing of filing for divorce, putting the house on the market, or buying a new home? According to Fustolo, timing is everything.
“There are so many restrictions on house buying right now. We have a dos and don'ts sheet that we give buyers. Don't go buy a new truck, don't quit your job, don't file for divorce. Basically, don't do all of these things that will sabotage your home purchase,” says Fustolo.
One of the biggest reasons to defer filing for divorce until you’ve sorted the status of your martial home is because of the impact it will have on your ability to qualify for a loan.
“If you're going through a bank and getting a conventional FHA or VA loan, you cannot get that when you have filed for divorce—that needs to be applied for prior to or after the divorce,” says Fustolo. “So the recommendation is, if you're contemplating a divorce and that's the route you're going, maybe each of you can buy something first, and sell your home first, prior to filing for a divorce. Alternatively, you can get completely divorced, and then buy and sell when there isn't this pending file that's hanging out there, because most of the lenders can't do it. None of the conventional ones can. So it would have to be some non-traditional funds, which is very costly.”
While it’s not easy to approach divorce with such a calculated mindset, it will benefit both parties to try and remove emotions from the interaction, and think of the big picture when filing for divorce and selling a home.
“Try as best you can to look at it as a separation of a business deal, and if you can, keep the emotions out of it,” says Fustolo. “Sometimes realtors give clients great advice, and they get really emotional, and so just to ‘show them’, they file for divorce and serve papers, and it just sabotages everything. So leave emotions out of it, make sure you’re receiving sound advice, and follow that advice.”
When asked what piece of advice he would give couples in this situation, Fustolo highlights the importance of creating a plan and sticking to it.
“Forecast a little plan of what your goals are, because you have a decision to make. You are either getting your real estate done, and then doing your divorce, or you're getting your divorce and then doing your real estate. There's no in-between.”
If you’re ready to file for divorce and are looking for counsel from a reputable family law attorney or realtor, our firm is here to help. Call us today at (503) 227-0200 to set up your free consultation, or to get connected with Joe Fustolo.