The Covid-19 pandemic has caused much death and havoc to our world and it has unleashed a multitude of issues for everyone, especially the undue stress on family finances, loss of jobs and businesses. Unfortunately, this in turn has created an environment conducive to increases in the divorce rate. If one has ownership of a primary residence or investment properties, this can be a very challenging and sticky situation as to the discussions, assuming they are civil, which is generally not the case or norm, as to how the property will be divided or potentially sold.
Most important is when young, pre-teen or teenage children are involved and the stress and anxiety that is created as to whether or not the living environment will be stable or a move will be unfortunately ground shaking for all in the final settlement. I had a call the other day from a new client, whose identity and location will remain very private, who is in the process of a divorce. The discussion arose around whether he would be staying and refinancing to pay his soon-to-be ex-wife her share or selling the home altogether.
It is an unfortunate situation that many, many families are in the process of going through but due to the pandemic has made life much more untenable and difficult to manage. This is particularly true due to financial stresses in the loss of jobs and businesses, especially in the restaurant field, where 50 percent have closed in New York City. This has only exacerbated living situations and made life worse at home. Couples have been struggling and unfortunately divorce raises its ugly head when a situation cannot be mediated, agreed upon and solved.
Real estate, whether your primary residence or investment properties, have to be dealt with through matrimonial attorneys who should handle these matters in the most proper and caring fashion. However, there are always two attorneys involved who are representing their clients’ best interests; and that is where some difficulties and log jams begin to occur. They are billing by the hour and it obviously can get very very expensive–sometimes between $50,000 and as much as $200,000-plus–depending on the length of time, financial assets and the complications and unreasonable expectations by both parties that come about over the one to three years or even longer that it may take to resolve.
It is very sad and disturbing to me when I hear the stories from friends, acquaintances and especially clients how equitable distribution of real estate and assets becomes extremely difficult when the individuals cannot agree on the terms. My thought is that when children are involved, couples should focus on their most crucial and important interests and not as much about their own. How will moving out of their current home affect them mentally, physically and socially? Stability and civility are the name of the game and although very difficult and challenging for the majority of couples to sometimes comprehend and deal with, it is extremely critical to minimize the effects on the children.
I know and realize it’s easier said than done; but it can be accomplished if a bit of common sense (which is not always common among fighting couples) and logic can prevail and come into play. Selling one’s domicile when you have been living there for many years or even short term is a very disheartening, difficult, heartbreaking and depressing situation to have to deal with. Figuring out all the pros and cons in solving who will be staying and who will be going is probably the most impossible task to wrap your head and mind around.
Again, if you have children, the focus should be about their welfare and stability, which will be most affected by the decisions that both parents make in settling their divorce. Many couples lose sight, however, of what is really the most important, a safe and stable environment for their children, but get caught up in arguments and disagreements. When all is said and done we only have our children right now and when we are gone, their situation and well-being should be No. 1 on your list today.
When determining whether you or your spouse will be selling or staying, hiring a competent, knowledgeable, expert and caring broker will go a long way in not only assisting and helping both parties through the process, but potentially solving problems. As a broker, I find myself many times keeping the peace and minimizing tempers and stress and becoming an advocate for both parties instead of one.
Legally, if the home is in both names, both parties have the right to hire two brokers in the sale of all properties. I have been involved in a multitude of divorce situations in the sale of homes and investment properties and have great success at being an intermediary or what some would say a level-headed arbitrator to keep the parties grounded and allowing civility to rein. Divorces can be very, very expensive, but a more economical remedy can be attained when both parties are in agreement.
This is most rare when it comes to an uncontested divorce whereby the couple would go through their local county and it could cost less than a $1,000-$5,500, if no lawyers were involved. But I always recommend initially using a attorney to get things down on paper in a legal fashion before going to your local county and mediator. However, most do not choose that path because the emotional and financial toll becomes so great that the parties can’t seem to agree on a settlement, and as I mentioned earlier, end up spending an immense amount of money with separate matrimonial attorneys.
The pandemic has caused tremendous financial and mental stress and my professional opinion is that couples should really try to do their utmost best to use common sense and logic and sit down and work out a plan as best they can as to who will be staying and who will be moving out or selling the home altogether and both then go their separate ways. If children are involved, hiring the right caring and concerned broker and attorneys to be involved in such a personal matter will end up minimizing the turmoil and stress while ending up potentially having a more positive financial and personal outcome.
As they say winners never quit and quitters never win, so if you have to sell or refinance to pay a spouse off, sit down, be civil and work it out. Plan on where you are going, whether renting or purchasing another place to live. Are you able to pay cash or will you be applying for a mortgage, has your credit been affected which will affect your borrowing capabilities?
But remember, if you have children, do the right thing for them and be level-headed in your decisions going forward through the process and good luck.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com