It goes without saying that divorce can create some horrendously nasty financial situations between two people. Emotions and money never mix very well, but when two people can’t stand each other and the only thing binding them together is a house they can’t stand…then there is a delicate art that goes along with handling this situation perfectly so that everybody wins.
Like it or not, you will come across this situation time and time again in your real estate investing career, so I think it is an important one to address right here, right now.
I always try to remember to step back from the situation. Remember that our job is to facilitate the transaction of selling their home to us. We are not Dr. Phil (or Jerry Springer in some cases!), and we can’t solve all their problems. We specialize in solving real estate related problems, and we tell them that’s what we’re there to do.
I think one of the funniest (or Saddest, depending on sense of humor) situations I’ve ever had to deal with was a this older couple (like 75 yrs old) getting a divorce who HATED…HATED each other! They sat on opposite sides of the living room and made me walk back and forth…back and forth…back and forth to get all the signatures that I needed that day. I swear I think I lost 10 lbs that day! All the while they were muttering things back and forth to each other and me. It was ridiculous!
Just a few days ago, we had a similar situation with a couple. She was living in the house with the kids and he had already moved out. I had to meet with each of them separately and work out the deal. The house was going through foreclosure and almost ready to go to the courthouse steps. The Deed was in both of their names, but the mortgage was just in his name.
So, really the wife had no reason to work out the process other than $$$. She was holding all the cards in this transaction. He obviously wanted to sell ASAP and get this out of his name no matter what. So, when I met with him it was a very different conversation. He didn’t even want any money or anything other than getting her out of his life and being done with this property. He signed the deed over and all the other purchase paperwork necessary. Then I meet with her and figured out her motivations. Once I explained what exactly the situation was with the house (needs tons of repairs, about to go to auction in 10 days, etc…) she agreed to accept a promissory note for $4k due if and when we purchase the property.
In exchange for this note, she signed a quitclaim deed and all the other purchase paperwork. Done deal. Win-win-win for everybody involved. We ended up getting a great deal on the property, he got her out of his life and she got some money to help her get a new place and get back on her feet.
Some key things to remember in dealing with these situations is to make sure that both parties know what your relationship is with them, that you are there to do a job and that you will show equal respect to both sides. You are not “siding” with one or the other. Many times you will be contacted by one party then will have to approach the other. I let the other know where I’m at with the person who contacted me to build rapport and to get them up to speed and on the same deal making page.
Also, make sure that…