You may wonder what this has to do with real estate? However, unresolved disputes really represent the quickest way to eliminate any equity that has accumulated in real estate acquisitions made over the years by either parties to the marriage.
Oftentimes, in stressful situations, the house, cottage, or investment properties are overlooked at the outset. It is often thought that a good deal of capital appreciation has accumulated and the equity will be there to divide.
Many times, this isn’t the case. If real estate is the major asset, then it should be treated as such. Get an appraiser right away. Find out what it’s really worth. Get a realtor as well. How quickly can it be sold? Are any improvements or renovations necessary in order to maximize its value? Can they be undertaken with reasonable dispatch?
What is the status of the financing? Can this continue? Who is going to continue to pay the mortgage? In fact, if it’s not paid will the mortgagee be selling your property at “fire sale prices”?
Both parties need to be informed and up to date on all the issues. If the market conditions are poor, then some alternative strategy is required.
In many circumstances, when liquidation is required, all properties end up being sold at inappropriate times and for the wrong reasons. This all arises due to the fact that the parties are not speaking. It’s costly to have two lawyers communicating on your behalf and often it’s untimely. In other words, by the time a proper answer is provided it’s too late.
First, if the parties get along sufficiently well, they should employ the services of a realtor to advise them. If they cannot agree on one realtor, then the next best thing is to have two realtors employed by the same broker provide them with advice. The third choice is to have two independent realtors co-list the property. That can work, provided the realtors are able to work together.
Another option is to secure the services of a real estate consultant. This person will be a realtor, but will be retained simply for the purpose of providing advice to the parties. This individual will not “list” the property.
The reasons I mention these approaches is quite simple. On far too many occasions, I have seen both parties refuse to speak to one another and at the same time have their joint assets erode substantially in equity. This happens in a sense by accident because no one is paying attention. And, even if one party is paying attention, it takes two to resolve the dispute.
No one pays the mortgage, taxes, insurance, maintenance and then disaster sets in. The market is flat or going soft and no one lists the property for sale. Rather than price it quickly for sale, it is listed far too high at a rather unrealistic price. It sits there unsold, and the prospective purchasers begin to wonder what’s the matter with the property. Really, the only problem is poor communication between the owners. Cottage properties are sold in the Fall, homes miss the Spring market and investment properties are sold after the tenant moves out. Basically, these are all issues in bad timing. Without a plan, bad timing occurs naturally.
So, even if you do not get along with your spouse, agree to get some good real estate advice early. Hire a real estate mediator, if necessary. Resolve that part of the dispute NOW, you can always fight about the money later.
Brian Madigan LL.B., Broker