California Divorce – Selling Your Home At A Later Date
Tim: I skipped one of our four. I missed see the slides. Sell at a later date.
So if I had four options. You had another about the rental. That was good.
So sell, refinance, keep existing mortgage, sell at later date or rent it out. We have people doing that.
But selling at a later date, we have folks that having their primary residence or a vacation home –
Connor: I’m so sorry!
Tim: …or a rental of some sort, that they’re making rents on. Okay, let’s say, it’s a rental or any of those types of homes.
And either the values not there or they want to hopefully go up in value so they can sell. So we have a specific circumstance with a client, vacation house, they make rent.
It’s like an Aspen or something like that Big Bear, I don’t know. And they rented out and they make money up but they sold, there’s not enough value. They overpaid for it back when real estate is blooming.
So they want to wait several years before they sell it. That was the agreement. We’ll continue to share the rents and ends the property together but we don’t want to sell it because it’s going to be at lost.
So they short sale it. They don’t want to ruin their credit. So that’s it.
Another option is to sell at a later date. And usually you have to make sure you have enough language in your Divorce agreement, that doesn’t leave us so open-ended that you can’t go to court and say, ‘It’s time to sell.’
Tim: It has enough language to have some enforceability. So it can’t be totally open-ended.
So you need to say something to the fact of like in this case we said, within five years the parties will meet and confront on a yearly basis to determine their appraised value for purposes of selling, not to cover the fees and so forth of selling the property and without a loss.
So that way if you get to that point and it’s there. And the other party said, ‘No, I just want to keep it. You can go back to the court and say, ‘No, this is what we agreed to.’ and get the court intervene.
Connor: Yes, I think that sell at a later date thing even though and I totally get that scenario. It’s tough.
I mean how do we know? Again just like back in ‘06 and ’07 shared properties are going up hand over fist like money was free.
And been practically wise but the whole general consensus even from some really brainy financial advisers out there was its trend was going to continue but it didn’t.
Connor: So it fell off. Sell at a later date, tough. I know any agent would always be there for their client.
And if in fact that’s what they decided to do in a future, they would. But again you have to ask yourself where are we going as a market?
Where are we trending? What possible obstacles would there be in the future? It’s a tough scenario.
Tim: Yes. I mean it sound as already a negative equity. And it was going to be a short sale now.
And let’s say it doesn’t go up in value. And they sell it five years later. And at least they’ve got some rents I suppose or—
Tim: Let’s give it a quick sale than throw it away, I’m sure the plus is that maybe they get out of it break even right.
Tim: Okay! Because in today’s market and you’re asking people to basically an agent to say like the stock market.
Yes, they think the house is going to keep going up or down. I mean you’re really taking chance there.
Connor: Yes, that’s a trade line, right? So somebody called a real estate agent on the phone and says, ‘Is it a good time to buy?’
‘Yes! Buy right now!’ That’s the typical way it’s done.
Unfortunately, right now in Santa Clarita Valley, here’s some truth, we’ve seen prices being flat for the last couple of months.
And it doesn’t look like the prices are going to continue to go up.
Connor: It would give an appearance right now because now we’re getting more and more inventory. We’re seeing a lot of price changes.
So this is something to ask that agent, ‘Where are in the market?’
Connor: ‘Is there a buyers market?’ We’re still in the seller’s market. But that trend is now shifting because of the excess inventory we see more days on market timeframes.
We see a lot more properties having their prices changed. And those changes are positive or negative they’re actually reducing.
We don’t see the actual sales prices changing. But again that will eventually happen if we keep on the trend.
There’s no new buyers that come out in to the market wanting to purchase at the current levels. There’s no other place where to go.
Tim: The whole evolution is so interesting in the transition from equity growing and home prices going up to how buyers and sellers realizing, ‘Why is my house is on the market too long?’
And then buyers saying, ‘Well, I noticed that there’s price reduction.’ so everyone just kind of sits on the fence.
Tim: There’s like this delay.
Connor: Correct. And so that’s where we’re saying right now. A lot of buyers they’re waiting. And we have a plethorawe’re working with.
They’re just waiting. And I get that. And we have sellers. The biggest question today from a seller is ‘When am I going to move?’
‘Okay, so I want to upgrade from this house. Is there going to be a house for me?’
It’s not to that point where I could say, ‘100%, yes!’
Connor: And then the other question ‘What do I do if I sell this?’ We should make this sale contingent on me finding the home of choice.
And so then that becomes a tough scenario for a buyer when there are 50 other houses.
Tim: And you kind of tie up three different people, right?
Connor: Yes, so then the other buyers so ‘I don’t want to ride this far. This house is contingent. I’m finding another house.’
Tim: And now will I be contingent on them buying one.
Connor: Oh, real deep! And then it’s like a house of cars.
Connor: You go through the whole thing. And it could be 10-20. I mean infinite numbers deep one person in there that’s contingent, they give the whole thing done.
Connor: Yes, It’s very interesting.