Sneak Peak - Book PrefaceDivorce This House: Sneak Peak at the Preface & Introduction: PREFACE It started with a brilliant question from one divorcing homeowner. The question was brilliant for at least three reasons: (1) no one else had thought to ask; (2) no one knew the complete answer; and (3) the question and answer applied to every divorcing homeowner, everywhere. In researching that brilliant question, we uncovered six shocking truths of divorce real estate that impact every homeowner—early in the divorce process—in every state. And in answering that brilliant question, we developed a simple solution every divorcing homeowner in every state needs to know right now: MORE/EARLIER. The question, as well as the answer, is gender neutral with one caveat: The answer essentially levels the playing field for the economically disadvantaged in many divorces, especially for stay-at-home spouses and minor children. But working spouses will find preventable pitfalls as well, particularly costly if the family home is not sold per divorce.
Before we reveal the question or explain the answer, here is how it all started:
Saturday morning, my cell phone rang and a concerned voice asked: "Where are you, Wendy? In the parking lot, I hope. Do you need help carrying anything?”
Unfortunately, I was still at home and already late for my free, Do-It-Yourself (DiY)) Home Staging Clinic at the local public library. I was stunned. Arriving late for my own public outreach workshop is most unlike me.
I dashed out the door “as is”...and immediately planned for damage control. Synched traffic lights and undetected speeding helped me arrive in minutes, face to face with a thankfully forgiving, enthusiastic group.
As I spoke to the audience, I noticed a woman with an especially forlorn expression, so sadly solemn that I immediately thought—Divorce.
When the event ended, she waited patiently, last in line, to speak with me. On the verge of tears, she quickly explained her situation. I was correct. Her husband was leaving her after twenty-plus years of marriage and two nearly grown sons.
As a couple, they owned a small business that he managed. She was a stay-at-home mom. He wanted to sell the house as is, despite deferred maintenance and dated decor, obviously eager to get rid of it and move on. A fire sale of sorts from which he expected to recoup, based on future income.
She, however, believed the equity in the home they had owned jointly for fifteen years represented the bulk of her future financial support. She needed to maximize the equity by preparing the house for sale—to receive the most money in the shortest period of time on market.
She was panicked. I felt compelled to help.
What came out of my mouth surprised even me. I congratulated her on winning the “contest”—a FREE home staging consultation! The contest may have been contrived, but she was thrilled.
Later that day, as we toured her house, I suggested simple ways to boost her home equity and salability.
Then she asked me a question that changed everything: “Whom should we hire as our real estate agent since we need someone who understands divorce real estate?” Divorce real estate? The more we researched, the more we learned that, yes, divorce real estate presents unique challenges for homeowners. And those challenges—regarding the family home—also impact divorce, financial and real estate professionals. We were further stunned to discover that divorcing homeowners in every state unknowingly risk major financial and legal problems after divorce from real estate mistakes made during divorce. And even more shocking is that unlike traditional real estate, the divorce process itself magnifies mistakes and often renders them permanent financial problems—preventable during divorce but not fixable after. Thus the answer transformed the original question into an opportunity. An opportunity to prevent permanent real estate mistakes made during divorce in every state, every day. Mistakes that once made are not fully fixable. Mistakes that often lead to damaged credit, default, foreclosure or even bankruptcy. Mistakes that ruin finances, families, and futures… for years after divorce.
The Simple Solution: MORE/EARLIER Because most divorce real estate mistakes are preventable but not fixable, the solution is clear: To successfully divorce your house, you need MORE/EARLIER. MORE information/due diligence, from MORE real estate and financial experts, much EARLIER in your divorce process. In every divorce, more information promotes more informed decisions, prevents costly mistakes and fosters a stronger financial future for you and your family. Following the MORE/EARLIER method has led us to develop: groundbreaking legislation, public outreach, continuing education for real estate professionals, continuing legal education for lawyers and family mediators, professional networking (among divorce and real estate-related professionals), television and now books… in less than one year! We are among the first authors and the first activists actually reforming divorce real estate. State by state. And the positive impact of a collective effort nationwide will improve the post-divorce financial fate of millions of Americans—adults and children—now and years from now. Nationally reducing divorce-related damaged credit, mortgage default, foreclosure and bankruptcy is just the beginning. In the meantime, you can protect your family right now from these major mistakes and more. “Whom should we hire as our real estate agent? We need someone who understands divorce real estate.” What a question! Now for the complete answer underlying MORE/EARLIER, we examine some of the costliest mistakes in divorce real estate. INTRODUCTION
You may be divorced, but did you divorce your house? And if you are still in the divorce process, are you sure your house will be fully divorced when the final papers are signed? Will your divorce be over financially when the divorce process ends? A clean financial break is key to winning your divorce in any state—and ensuring a stronger financial future. Unfortunately, many divorced homeowners are shocked to learn, too late, that they didn’t divorce their house—or completely divorce their spouse—if there is any joint debt (e.g., mortgage and credit cards) or any joint ownership (e.g., real estate) after the divorce decree is final. Why? Because with any joint ownership after divorce: Your spouse’s post-divorce debts, including tax liens and any credit card debt, become YOUR debts when the creditor files a lien on your house title. Once a lien attaches to your property, you cannot refinance or sell your house unless you pay that debt. Until you properly record a quitclaim deed transferring title to you individually, your spouse remains a titled owner of your house – placing your property at risk for your former spouse’s post-divorce debts. And with any joint debt after divorce, you risk: Damaged Credit. One late payment on the joint mortgage or a joint credit card reduces YOUR credit rating—even if the judge required your spouse to pay that bill each month. Missed or additional late payments can cripple your ability even to rent an apartment, let alone purchase a house for years after your divorce. Foreclosure. Foreclosure on the joint mortgage damages YOUR credit rating for years after divorce: three years or more on your credit report and at least seven years on any future mortgage application. Bankruptcy. Bankruptcy filed by your former spouse can also drag YOU into bankruptcy after divorce when joint creditors seek repayment of the entire debt from you as the non-bankrupt spouse. If you cannot afford to pay the joint debt yourself, bankruptcy is often the final option (but only if you qualify under the stricter requirements of the federal bankruptcy laws amended in 2005).
Only Two Ways to Get Your Name Off a Joint Mortgage To truly “divorce your house,” there are only two ways to get your name off a joint mortgage: Sell the house or have one spouse individually refinance the mortgage. That’s it. Signing a quitclaim deed transfers ownership but has no effect on your house debt, including a joint mortgage. Similarly, your divorce decree applies only to you and your spouse—not to your mortgage lender, credit card companies or others. This remains true even if your divorce decree contains a “hold harmless” clause requiring your spouse to hold you financially harmless from a joint debt and the creditor seeking repayment of that joint debt. Keep in mind that if you co-signed a mortgage or credit application, you remain individually liable for the entire debt after divorce, including your mortgage and credit card balances. That is, until the joint debt is paid in full. Six Shocking Truths of Divorce Real Estate This is just one of the shocking truths of divorce real estate that many divorcing homeowners are tragically unaware of…until it is too late. Remember: Whether you or your spouse keeps the house, YOU risk damaged credit, mortgage default, foreclosure or even bankruptcy. The bottom line: Your financial future remains tied to your former spouse if you keep any joint debt or joint ownership ties after divorce. And the most common source of all this risk—keeping the house. Keeping the house may be the biggest mistake you can make in your divorce. This is usually an emotional decision and not a financially sound one. Sadly, keeping the house often leads to losing the divorce. The financial fallout—from overvalued, mismanaged real estate during divorce—can damage your standard of living for years after divorce. By reading and following the premise of this book, you are taking an essential step toward protecting yourself, your property and your financial future by using the MORE/EARLIER method.
Right-Sized Residence for a Stronger Financial Future After Your Divorce
Did you know that some real estate investment groups expressly look for women nine to twelve months after their divorce? Why would they target women in this bracket? Generally, these post-divorce “prospects” include stay-at-home parents (particularly mothers) who litigated during divorce to keep the family home for their children—a financial obligation they simply cannot afford to maintain, alone. Accepting an under-value cash offer from such morally questionable investors, perhaps losing all of the equity they litigated to keep, as well as the pensions their former spouses received in exchange for house equity, plus the legal fees expended—all to avoid foreclosure. Is this option financially better than foreclosure? Barely, if at all. Although this tragic situation is preventable during divorce, it is not fully fixable after divorce. As one of the most valuable assets of the marriage, the family home is a major factor in most post-divorce financial distress. Through the MORE/EARLIER method, we seek to reduce divorce-related mortgage default, foreclosure and bankruptcy nationwide. And when divorcing homeowners choose right-sized residences, we leave such morally questionable real estate investors with ZERO clients in post-divorce real estate. Given the fact that sooner is always better, the time to make informed decisions regarding your house is now. By following the MORE/EARLIER method in your divorce and finding your financially right-sized residence, you will Move Forward with More™ (more: choices, opportunities, time and hopefully more money) for a stronger financial future. The best time to protect your post-divorce financial future is during your divorce process. Knowledge is power…especially in divorce real estate. Return to Home Page from Divorce This House Book Preface Snaek Peak |
