Top 10 Real Estate Mistakes People Make When They Get Divorced

December 13, 2022

Divorcing is rarely an easy experience. Dealing with contentious spouses, protecting the emotional lives of the couple’s kids, figuring out an equitable separation of assets… Divorce is tough on everyone involved. Add to it the underlying trauma of losing not only the security of being in a relationship but also the loss of some—or all—of the possessions that defined the couple’s way of life, and one can begin to understand the importance of partnering with professionals who will support and protect the emotional and financial lives of each divorcing spouse.

Because there is so much upheaval happening in nearly every aspect of a person’s life during divorce, certain key components of success are often overlooked or outright ignored, especially where the house is concerned. This is why it’s crucial to have the right team working neutrally to protect the home’s equity and, hopefully, allow each person to walk away from the relationship as whole as possible. With that in mind, let’s talk about the top ten mistakes couples make with their real estate when they get divorced.

The top ten mistakes divorcing couples make with their homes

  1. Letting emotions get in the way
  2. Going straight to court without a plan
  3. Not partnering with a CDRE
  4. Becoming too attached to the house (and its perceived value)
  5. Inaccurately estimating the home’s value
  6. Being focused on winning
  7. Sabotaging the sale of the home/Seeking revenge/Refusing to cooperate
  8. Being a pushover
  9. Prioritizing advice from friends over the attorney and the CDRE
  10. Not understanding the nuances of the current real estate market

Let’s go over each item in more detail.

Letting emotions get in the way

Once a couple decides to divorce, they’ll need to change their mindset in several ways. The first way will be to reframe their relationship with the things they own. Whatever emotional connections the couple has with their possessions will need to be severed, and the physical items reframed in their minds as assets—assets that are now elements of a business transaction. This detached mindset should help to keep the process moving forward and avoid excessive stress as the couple discusses the distribution of personal items. Divorcees can reestablish emotional connections with their stuff after the divorce is final.

Going straight to court without a plan

In California, the court system will weigh heavily any agreements the couple brings with them to the divorce proceedings. If the couple can agree on who gets what before going to court, it can save them thousands in attorney’s fees and reduce the time it takes to close their divorce case.

Not partnering with a Certified Divorce Real Estate Expert (CDRE)

Most people look at divorce from only one side of the relationship. A CDRE, on the other hand, establishes rapport and builds trust with both parties so she can effectively represent the home and mediate any other potential issues within the relationship that might compromise the real estate aspect of the case. Neutrality is the key to success here, so this type of specially trained professional will work transparently with all parties involved in the case, even testifying in court if necessary.

Becoming too attached to the house and its perceived value

A home’s value is somewhat subjective. Sellers think their home’s value is equivalent to how much they loved living there and how many upgrades they performed, but the reality is that values are mostly dependent on what buyers are willing to pay. A common trap today’s sellers fall into is pricing their home at height-of-pandemic prices, then refusing to budge when buyers won’t bite. Divorcing couples need to remember that their fond memories are their connections to the home, not prospective buyers’. And any upgrades they made to the property may not be in line with the tastes of the current buyer pool. An experienced real estate agent can prepare the home to meet the demands of present-day prospects who are actively searching for homes.

Inaccurately estimating the home’s value

Divorcing couples often ask for a Fair Market Valuation to establish their property’s value and calculate the equity they’ve built in their homes. What they don’t seem to realize is that fair market value only takes into account part of the picture. Without considering several additional key metrics, a miscalculation of true equity is almost guaranteed. Here’s what to look for when calculating the equity in your client’s home. Further, couples should plan to have the home pre-inspected before listing it on the open market or engaging in a buyout, so they can appropriately gauge whether the value should be adjusted to allow for necessary repairs or even sold as-is.

Being overly focused on winning

Relationships often turn acrid during divorce, and in some cases, spouses can be so competitive that they hurt themselves and their children in the process of trying to hurt one another. Ironically, if the individual members of the splitting family are going to have a fighting chance of making it through the divorce financially whole—or as close to it as possible—they’ll need to put down the boxing gloves and start protecting as much equity as they possibly can.

Sabotaging the sale of the home/Seeking revenge/Refusing to cooperate

One way divorce real estate can seriously affect a divorcing couple’s financial situation is when one spouse attempts to sabotage the sale of the home. A CDRE works neutrally with both parties to help to prevent that scenario from becoming reality—and in extreme cases, where one spouse simply won’t cooperate, the CDRE can step in and testify in court.

Being a pushover

On the other hand, neither divorcing spouse should let the other run roughshod over their wellbeing. A CDRE can help here, too—at least where the house is concerned. Again, working neutrally with both parties and their attorneys, the CDRE’s primary focus is capturing and protecting as much equity as possible in the couple’s home. She doesn’t favor one spouse over the other, she favors the house.

Prioritizing advice from friends over the attorney and the CDRE

This one needs no explanation other than to say that every divorce is unique. Whatever a friend experienced during their divorce will likely not have the same context or nuance that any other couple is experiencing, so it’s critical for each spouse to enlist the help and support of knowledgeable professionals—and follow their advice.

Not understanding the nuances of the current real estate market

Real estate markets are fraught with twists and turns, especially in high-value states like California. For this reason, sellers need to partner with an experienced real estate agent who is active in their area and knows the latest mindset behind buying behaviors at any given time. Attempting to predict what the market will bear is generally difficult, but without an experienced partner by your side, it’s utterly futile.

In closing…

I’ve been a licensed real estate agent in California for more than 18 years, and I’m also a CDRE. My job is to help couples and their mediators, attorneys, financial analysts—the whole divorce team—to protect the equity in the marital home.

Being a CDRE means I’m also specially trained to provide real estate guidance and support to the courts when they need expert testimony or documentation to support their cases.

If you’re going through divorce—or you’re representing someone going through divorce—call me. I’ll be happy to offer guidance or even take the real estate aspect of the case off your plate.

650-550-8646

Shannon Rose
CDRE, SRES, CDPE, CLHMS, GPS
DRE# 01422955
Los Gatos, CA
1-650-550-8646
DivorceRealtor@RoseGroupRE.com

BAY AREA DIVORCE REALTOR®

SHANNON ROSE/ROSE GROUP
DRE #01422955

KW BAY AREA ESTATE
DRE #01526679

16780 LARK AVE.
LOS GATOS, CA 95032

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