Divorce This House^TM As Seen in The Tennessean

After divorce, home is often biggest loser Local agents are earning special designation for splitting up estates By NANCY MUELLER | For Williamson County A.M. • May 2, 2008

People who are selling their homes as a result of divorce have more potential pitfalls to avoid than other sellers and a new real estate specialty is emerging here to help divorcing couples avoid them.

Kelly Lise Murray, an attorney and licensed realty agent, calls divorce real estate "the elephant in the corner of family courts nationwide" because too often, the value of the divorce house is not getting enough attention and it is not being calculated early enough in the divorce process.

So to aid real estate agents, she designed and began teaching a course that is now approved by the Tennessee Real Estate Commission to get the elephant out of the corner.

"Although the family house is one of the largest assets of the marital estate, there is nearly no state-prescribed guidance for divorce real estate," Murray said.

Too many times the value of the house is determined by one or maybe, at most, two professional appraisals. These market analyses may not take into account crucial home-value issues such as termite damage or an aging roof that will need to be replaced in two years, she said.

"Without a home inspection and at least one title search before transfer between former spouses, the house is likely over-valued given hidden-condition problems and/or clouded title," she said.

Michele Wilkinson, a SilverPointe Properties agent who just earned the divorce specialist designation, said title searches are important to identify any liens that have been placed against the property.

In some cases, either or both divorcing spouses may be unaware of the liens affecting their home value until they are brought to light with a title search.

Home inspections of this kind of real estate are critical. Often couples in turmoil are less likely to keep up with home repairs, Wilkinson noted. "Sometimes the husband doesn't want to invest in making repairs and improvements because he thinks she'll get the house, not realizing that both of them can share that benefit."

Real estate agents trying to help the couple sell a house must avoid being drawn onto either spouse's "side," she added. Instead, the agent must serve "the best interest of the house," meaning getting a sale "within the quickest time frame for the most money."

And, Williamson noted, getting the right value on the house is important whether the divorcing couple plans to sell and split the proceeds or whether one spouse is receiving sole title to the home from the other spouse in the divorce settlement.

In cases of inter-spousal transfer of the home, a spouse might be required to individually refinance the mortgage after the divorce but then may not qualify for the loan, Murray said. If that key fact is not determined and presented to the divorce court during property negotiation or before the divorce is final, it may lead to disastrous results, such as foreclosure or bankruptcy.

The best protection for everyone involved is getting more information about the real value of the home before the property settlement has been finalized, Murray said.

Wilkinson said she has joined a network of professionals that includes attorneys, financial advisers and even therapists who are available to help families make a positive transition. The network calls itself the "lifestyle change" group.

They can help homeowners determine whether they have a sound financial forecast for keeping their house or whether they need to "right size" to another home.

Murray and Wilkinson said if the decision is reached to sell, divorce houses might also need staging services more than others.

"Most real estate agents can spot a divorce house right away," Murray said. "You can tell by the closets; one of them will be empty and the other one, full."

Murray said she became interested in the special real estate needs of divorcing couples through Wendy Waselle, a home stager who also has a master's degree in education. Wasell was helping some clients stage their homes for sale in connection with a divorce.

Some of these clients asked Waselle if she could recommend a real estate agent who had expertise in divorce situations. "I kept thinking that there's got to be more out there to help Realtors with this," Waselle said.

She helped develop and also helps teach the divorce real estate course with Murray.

Jeremy Flax, managing broker and owner of EXIT Realty of the South, was in the same class with Wilkinson. He estimated that 10 percent of his firm's sales are related to divorce.

He said there is no doubt these sales "can be a bit more complicated." He said the special training raised his awareness of the importance of title searches, even when the house is not being sold but is instead being transferred to one spouse.

Murray has co-founded DivorceThisHouse.com, where anyone can look for more information on the subject and the course she teaches. The class is approved by the Tennessee Real Estate Commission for 12 continuing education hours and permits graduates to have an "RCS-D" designation: Real Estate Collaborative Specialist-Divorce."

Wilkinson also offers Thelifestylechangegroup.com, which provides more info.

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