Don’t leave money on the table

money to close on homeA nagging concern that is often expressed by many home sellers is that they are leaving money on the table; in other words selling for too little. The dilemma often presented to a home seller is that if the home is priced too high, then there is risk eliminating potential home buyers; while at a lower price, there is risk selling at a less than desirable price.

Pricing a home is both a science and art. Skilled agents employ mathematical formulas as a foundation upon which to build a case for a range of sale price (the science); as well as demonstrating their ability of making price adjustments for variations in improvements, updates, as well as intangibles (the art).

But it may not necessarily be your home’s list price that can set you up to leave money on the table. Examining how your home is marketed, as well as your motivations and reasons for selling may reveal a weakness in your negotiation position as a result of convenience.

Selling a home can be disruptive to your daily life; and the prospect of having people, whom you’ve never met, traipse through your home can be unsettling. The typically limited and highly targeted private placement or pre-listing marketing may offer the convenience of limiting buyer traffic to your home, but its appeal is sometimes promoted to increase the potential of the agent receiving both sides of the commission.

Before you agree to a marketing plan that promises exclusive home buyer targeting; consider that many experts make the argument that you can leave money on the table when limiting your home’s exposure to potential buyers. In a world where everything and everyone seems electronically connected, you can increase the buyer pool by taking advantage of every reasonable marketing opportunity (including the internet and local listservs, and electronic bulletin boards, and other acceptable marketing tactics).

The process of selling a home can also be emotional and time consuming; more so if you’re divorcing and selling marital property, or selling your parents’ or grandparents’ home (sometimes because of a move to an assisted living facility or to settle an estate). The convenience of a quick sale can be very tempting; but can also set you up for selling for too little. And if the home is in need of repairs, updating, and renovations, the pricing can be unclear and inaccurate adding to the pressure for a quick sale.

You might even be considering responding to an ad promising a fast home sale without real estate commissions, repairs or home inspections – which is alluring to be sure. However, consider that many of these operations are seeking to purchase homes at a fraction of retail value minus repair costs.

Unfortunately, there is no “real time” measure to determine if you’re selling your home for too little; and some home sellers often lament in hindsight selling at a lower price out of convenience. However, a little homework and investigation can at least better your negotiating position. Ask questions and understand the purpose, benefits and limitations of a private placement or pre-listing marketing. Additionally, you can get pricing guidance from a market analysis, obtained from at least two (three is better) neighborhood real estate agents. And finally, weigh the pros and cons of selling out of convenience to the process of selling on the open market (listing the home in the MLS).

Original published at

© Dan Krell

Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Gauging real estate market through divorce and premarital agreements

divorce and real estateCan we gauge the real estate market through divorce and premarital agreements?

A recent news item ( from the American Academy of Matrimonial Lawyer ( appears to be good news for real estate.  The October 16th press release proclaimed that a majority of AAML members surveyed indicated that there was an increase in prenuptial agreements over the last three years.  Among the top reasons cited for a premarital agreement included “the protection of separate assets” and “the division of assets.”

According to the AAML, the increase in premarital agreements correlates to an improving housing market and overall economy.  Alton Abramowitz, president of the AAML was quoted to say, “As the financial and real estate markets continue to improve, there is a greater awareness of risk to possibly sharing these gains in a divorce…”   Mr. Ambramowitz further stated, “…The trend of divorcing spouses fighting over which one has to take possession of a devalued home and other depreciated assets appears to be coming to an end.”

Although this was an anecdotal survey that does not provide empirical evidence linking the increase of prenuptial agreements to an increasingly healthy housing market and strengthening economy; Mr. Abramowitz’s logic makes sense, and you might think his reasoning as intuitive.

However, the increase in premarital agreements is not necessarily an indication of a growing economy and housing market – but rather, there may be other anecdotal evidence explaining the prenuptial increase may be due to the increasing number of couples delaying marriage to a time when some wealth has been amassed.  The results of a 2010 AAML survey indicated a rise in premarital agreements was also attributed to couples marrying later in life.

Additionally, the link between the concept of delayed family formation and an enduring sluggish housing market was cited by Ben Bernanke, in a February 2012 speech given to the National Association of Homebuilders.  The speech identified economic concerns and a decline in family formation as reasons for the decreased commitment to home ownership.

Furthermore, counter-intuitive results from a recent study found that divorce rates drop during housing slumps and recession; but the notion that divorce rates are higher during prosperous times may support the most recent AAML survey that premarital agreements could be an indication of a healthy housing market.  Abdur Chowdhury’s 2013 study (’Til recession do us part: booms, busts and divorce in the United States, Applied Economics Letters, 2013, vol. 20, issue 3, pages 255-261) analyzed data from 45 states between 1978 and 2009 to find that “divorce is pro-cyclical.”   During a recession, Chowdhury believes that there is a “new appreciation for the economic and social support that marriage can provide during tough times.”

Supporting Chowdhury’s results, Melanie Lawder (Divorce Rates Lower During Recession, The Marquette Tribune, 2012) reported that divorce rates dropped to 16.9 per 1,000 married women (from 17.5 per 1,000 married women in 2007) during the Great Recession.  Lawder also quoted a study by the National Marriage Project at the University of Virginia indicating “29 percent of Americans aged 18 to 45 believe the recession has deepened their commitment to marriage.”

Although there may be numerous reasons for divorce rates to drop during difficult economic times, the recent increase in prenuptial agreements can certainly be viewed as a positive sign for housing; it may be that there is an increasing perception of the value of real estate, which people seek to protect.

by Dan Krell
© 2013

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Disclaimer.  This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice.  Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction.  Using this article without permission is a violation of copyright laws.

The challenges of selling a home while divorcing

Of the many challenges you might face while going through divorce, having to leave your home is not only emotionally disruptive, but has the potential to create short term havoc as well. Imagine not only having to pack and move your personal possessions, but also having to cater to strangers traipsing through your home on a regular basis.

Because selling a home during divorce can sometimes offers additional pitfalls, choosing the correct Realtor® as well as arranging a thorough home sale agreement with your ex-spouse may minimize the emotional stress and grief, as well as possibly avoiding additional conflict. As always, I need to remind you that I am not an attorney, and if you’re going through or thinking of separation/divorce, consult your attorney for legal counsel.

Of course you want to choose a listing agent with sharp real estate acumen. However, consider additional agent attributes such as facilitator, active listener, as well as being discreet. Most top real estate agents are good facilitators, being able to move a transaction from an offer to close; but in a divorce situation, the listing agent should not only address the buyers side in negotiation, the agent needs to be able to facilitate the transaction by bringing both ex-spouses together.

In what may seem to be a skill that is scarce these days, active listening is not only hearing what you may have to say but is demonstrating you are understood. Not unlike a counselor, the agent with active listening skills is able to recap a conversation and be able to actively address your concerns during the home sale.

To thwart unwanted lowball offers, the listing agent must be also be discreet. Home buyers may sometimes mistakenly equate a divorce related home sale with a distressed property, and subsequently present an offer that is below market pricing. Additionally, the listing agent must remember that they have a fiduciary responsibility when representing all the sellers of the property and not should not favor one side or attempt to cram offers through.

Having a thorough home sale agreement prior to listing is not always realistic, it’s not unusual for an agreement to be reached after the sale. However, giving consideration to other sale related issues in addition to disbursing the sale proceeds can facilitate a sale. To assist in making your transaction and transition smoother, consider the disbursement of escrow accounts, payment of left over bills, property damage and removal of your spouse’s possessions.

The mortgage and water bill escrows are sometimes forgotten during a divorce sale. When your mortgage is paid off, the mortgage company will refund any remainder of the escrow account that was used to pay your insurance and property tax. Additionally, the remainder of the escrow that is collected at settlement to pay the final water bill must be disbursed as well.

An ex-spouse’s personal property can sometimes linger, making the home appear cluttered and creating challenges to staging. Arranging to remove personal property prior to listing may assist in showing the home at its best. Additionally, agreements as how to handle escrow shortages and any property damage that occurs prior to settlement may also prevent potential closing issues and delays.

Although proactively arranging for all pitfalls in the divorce sale is not always realistic, consulting with your attorney can help you navigate through the obstacles.

by Dan Krell
© 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

A lot’s at stake, proceed with caution

by Dan Krell © 2008

Separating? Divorcing? Separation and divorce can be one of the most challenging experiences anyone can endure. Even when you decide to work things out amicably, things can become contentious and difficult; disagreements seem to be at the heart of divorce, right? If you haven’t consulted an attorney yet, you should do so to get advice and assistance on the splitting of assets (including your home) and the tax liabilities you may incur.

Splitting couples often do things in haste out of anger, fear, and sometimes (mental) exhaustion. Getting to the nitty-gritty, there’s a lot at stake; making impulsive and rushed decisions can be reckless- especially when it comes to the disposition of the marital home. Before you make a move, explore the options available to you to protect your assets and your financial investment in your home.

Divorce agreements vary with the requirement to sell the marital home. Some separating couples agree to sell immediately, while others agree to sell after a number of years (allowing one spouse to stay in the home). Depending on when your agreement requires the sale of your home, you could owe additional taxes. The tax laws are complex (consult your accountant), however filing jointly would allow you to claim up to $500,000 in real estate capital gains without being taxed, while filing individually only allows you to claim up to $250,000 real estate capital gains without being taxed.

When it comes time to sell your home, finding a Realtor who has experience with divorcing couples can make the sale go smooth. Before hiring a Realtor, interviewing several can give you an idea of their communication skills and experience. It is wise to hire a Realtor who is neutral and can work with you and your spouse; hiring a Realtor because they are a relative or friend often creates or adds to the spousal discord, which deteriorates communication at a critical time.

Misunderstandings and bad feelings between you and your spouse can undermine the home sale by interrupting communication between all parties. To facilitate a smooth sale, everyone (you, your spouse and your Realtor) should agree on the communication methods to inform each about aspects of the sale, as well as the process to show the home and the preferred method of contract negotiations. By laying the groundwork prior to listing the home, everyone knows what to expect and how the sale process will be executed.

Pricing the home realistically can eliminate a lengthy time on the market. It is good practice for your Realtor to present an analysis of the local and neighborhood market to you and your spouse so as to agree in pricing the home.

Your Realtor should always be discreet about your domestic affairs during the sale. Domestic situations, such as divorce, are not material facts about the home and do not need to be communicated to home buyers. Keeping discretion about your domestic affairs can limit bargain hunters’ “low ball” offers.

Planning and counsel can lessen the overall impact of separation and divorce by exploring your options. If you have a home and are divorcing, consult with your attorney and accountant before agreeing to listing and selling the home.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of March 31, 2008. Copyright © 2008 Dan Krell.

What happens to your home in a divorce?

What happens to a family home in a divorce?

When divorce is imminent, people tend to worry about the children’s future, how to treat the mother-in-law who was so nice (lucky fellow), how their friends will react. Of course, these should be at the top of one’s mind. There are many concerns to worry about.

Beyond family concerns, finances and real estate are important also. Figuring out who gets what and how much can get messy, antagonistic and litigious. That is why an attorney should be consulted on these matters.

But what about the marital home? There are various options and outcomes. Sometimes the agreement is amicable.  However, there are many times where spouses disagree and rely on their legal counsel.  Sometimes, the court steps in and appoints a trustee to determine the disposition of the home.

It’s common for one party to offer to buy out the other’s interest in the home.  But in doing so, coming up with the money may be a challenge.  “Cash-out” refinance and home equity lines are sometimes a solution if the spouse meets the lender’s underwriting guidelines.   Of course, if the home has no equity, then relying on a cash-out refi may not work.

Selling a home is emotional and stressful. Selling a home during a divorce can compound the stress.  It’s important to be as objective and fair as possible when making decisions about the marital home.   If you are selling your home, hire a professional Realtor who is objective and adept in handling such sales.  Consult with an attorney on matters of separation and divorce.

by Dan Krell © 2005
Copyright Dan Krell 2005.