Real Estate is directly tied to life change in so many ways. The first home needs to be changed after marriage, couple’s home needs to be changed after a baby, dog, and second baby. Baby-stage home gets outgrown by teens and young adults and so-on.
The tracks are often different than what you have laid out but the fact that our homes often change with our life is a constant general principle. These life events also include some hard things too, including the divorce of a couple and the sale of their marital home. REALTORS® are there for the happy moments and sometimes need to be a support through the hard times too with the same expert, professional advice to aid in the transition.
Let’s talk candidly about the tricky elements of a divorce sale and things to think about.
The land title system in Alberta offers two types of title ownership, joint tenancy, and tenancy in common.
Under joint tenancy, the sellers own the whole property jointly and must make decisions in lockstep to move the process forward, which is the most common ownership for married couples or seriously committed common-law couples.
Tenancy in common allows individual owners to own a portion of the whole property by division of shares, which makes this the most common for buddies, siblings, roommates, or other scenarios where an individual wants to be able to sell their share of ownership without having to sell the property itself.
Divorce sales as I am using the term here would be two persons in joint tenancy who need to dispose of the property at the end of the relationship.
Remember who your client is
This is serious because in a situation where REALTORS® represent both sellers as they are drifting apart, the REALTOR® needs to remember that the sellers may have different views, and both need to be consulted equally on all matters of the trade. That is not easy, ever. The further they drift, the harder it is to keep them pointed at the same goal. In especially messy situations it may be advantageous to talk to the broker about getting two REALTORS®in the brokerage to manage the needs of the individual parties and work together for the good of both.
Additionally, there are other situations where a clear understanding of the client situation is crucial. For example, if a common-law couple is breaking up and only one is on the title, the REALTOR®only has one client, not two. The Matrimonial Property Act will work out the disposal proceeds according to the law after the sale, but during the transaction, the REALTOR®only has one client to manage and any information sharing requires their consent. Where the couple is married and only one name is on the title there are Dower Act implications which I have written about on their own in other articles.
“Everything is amicable” and “We are agreed that this is for the best” are a few of the phrases that I have heard across the kitchen table when discussing a divorce sale. I never doubted in those moments that the couple earnestly believed those statements when they said them, but circumstances are dynamic and fluid regarding matters of the heart. I learned over the years that my role in such situations was to help the couple operate at a very expedient and efficient level to dispose of the home as quickly as reasonably as possible while the temperature remained low.
As one might expect, sometimes a revelation is sprung on the situation, such as a new significant other of one of the parties, which throws the whole process into chaos. Like trying to catch a bouncing football, tensions flare, passions are inflamed, and emotions cloud all reason and logic. As I mentioned, expediency is best through the process ideally before such a surprise is sprung.
Objectivity is the key
The most valuable service a professional REALTOR® can offer in such situations is pure unvarnished objectivity.
The breaking of the relationship will send the individuals on an emotional roller coaster that is unpredictable in its path. The REALTOR® must never ride the crazy train with one or both parties but remain absolutely objective! No taking sides, no sympathizing, no favoritism regardless of circumstance, since the REALTOR® needs to be the voice of reason and objectivity to help the clients see things clearly and be able to trust that the REALTOR® has their best interests at heart without a bias for the situation. That continued trust in the professionalism and advice of a REALTOR® may even lead to a future property purchase when the dust settles because things were handled the right way.
A final note which should be obvious but has been so misunderstood over the years. Unless express written consent has been granted by the sellers, disclosure of the motivation for the sale is prohibited. Period. That includes divorce sales, which in most cases of disclosure would have the likely negative effect of lower offers from buyers who know the situation and want to capitalize on it. Price it well, have a full-blast marketing plan and get it done without ever disclosing the motivation of the seller in a divorce sale or otherwise without their timely and informed consent.
No one revels in such a situation, but divorce is an unfortunate side effect of our cultural moment. The simple fact that in most cases a family home needs to be sold to settle the matrimonial dispute is a problem that requires a solution that should not be taken lightly.
Perhaps a little acronym will help. When a relationship is D.O.N.E. remember to be Direct, Objective, Non-disclosing, and Expedient and that should help you navigate some of the bumps.
Provincial Practice Advisor
Bryan has many years of experience in the real estate industry including over 10 years as a former broker in the Edmonton Region.
Email: email@example.comPhone: 403-209-3619