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As discussed in part one, the sale of a marital residence during divorce carries significant emotional weight and must be handled carefully by any real estate professional involved. It's crucial to understand the terms of the sale as dictated by the divorce and to communicate efficiently and equitably with both parties to ensure everyone has the same information. In part two, we will explore real-life scenarios where agents must use their expertise in difficult situations involving divorcing parties and apply the advice from part one.
When divorcing clients sign a listing agreement, it’s important to make sure that they both understand the complexities of the situation. They should be aware that all information will be shared equally and decisions regarding the sale will require input from each spouse. Respecting and investigating both parties’ interests, even when they may not align, is vital. In the event of an impasse, contacting the attorneys and other professionals involved is necessary to give clients the best possible chance to make decisions that protect both their interests.
Article 1 of the REALTOR® Code of Ethics states that “REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary but does not relieve the REALTOR® of their obligation to treat all parties honestly.”
This requirement can create challenges when clients have conflicting ideas about selling the marital home. Who does the listing agent listen to? How can the agent navigate these scenarios to best protect the interests of both clients?
Scenario 1: Conflicting Demands
Situation: Both parties signed the listing agreement but are making conflicting demands. One party wants only qualified buyers and no open houses, while the other wants an open house every weekend and constant social media content posted of the home. Which approach should the agent employ to sell the house?
Resolution: The agent should present both scenarios to each of the parties, weighing the pros and cons of each approach. There is merit to both positions. If a compromise cannot be reached, it’s important to consult the attorneys representing each party. Their insights into the details of the divorce could be beneficial in finding a solution. Ultimately, seeking a compromise is key, and if that fails, the agent should again involve the divorce counsel to move the parties closer to a resolution. If the parties are not on the same page about the basics of marketing their home, there is a chance that there could be other bumps in the road to the sale.
Scenario 2: Price Reduction Disagreement
Situation: The marital home has been on the market for a month with no viable offers. One party wants a price reduction soon while the other thinks it’s best to wait and hold another open house. Which direction does the agent go in to make both parties happy and get the home sold at the best price?
Resolution: Typically, price reduction issues should be handled by the parties’ divorce attorneys. If the separation agreement outlines the mechanism for price reductions, the agent should follow that. A standard provision would include when and how much of a reduction takes place. If the mechanism for a price reduction is not set out in the parties’ agreement, the agent would need to be extremely specific as to why the reduction is either a good idea or not at the given time. Remember that there are big emotions involved. Clear, factual information can help the parties focus on the situation rather than their emotions.
Scenario 3: Disagreement on Offers
Situation: An offer has come two weeks after listing the marital home. The offer is not the full asking price but is strong for the market and area, with the buyer looking for a quick close. The agent has had two highly trafficked open houses. One party wants to accept the offer and move forward with the sale. The other suggests waiting to see if there are any better offers out there and holding another open house to try to garner an offer at full asking price. What should the agent do to protect and promote the interests of both parties?
Resolution: Again, any impasse between parties going through a divorce should be brought to the attention of their divorce attorneys before the agent attempts to bridge the gap. In this case, communicating with the attorneys and providing them with all relevant information is crucial. Time is likely of the essence, so detailed and effective communication is the best course of action.
When difficult situations arise and an impasse occurs between divorcing parties, effective communication with both sides is crucial. Presenting the pros and cons of each situation helps navigate these challenging times. Divorcing parties are often in an extremely emotional state, making the agent's clear, consistent communication with lawyers and all involved essential. Even when clients’ interests do not align, protecting and promoting the interests of both parties is the top priority.
