For agents who have clients who are going through a divorce, special skills are necessary to ensure a smooth experience
By Cara Finnegan
People often list their homes to embark on an exciting new chapter of life.
Whether upgrading to make room for a new baby, downsizing to enjoy the freedom of retirement or migrating to a new city for a big career move, these clients are often filled with optimism, eagerness and a willingness to collaborate. But not all life changes are positive.
Divorcing couples, who may be going through one of the most financially difficult and emotionally charged times in their lives, present unique challenges to their listing agents.
“In divorce real estate, we’re dealing with people who are probably very good people, but we’re seeing them at their worst. Their lives are upside down; their financial status is often wrecked,” says Diallo Stevens, CRS, associate broker of Keller Williams Gold Coast, serving New York City and Long Island, New York. “They’re afraid. And people in those situations do not behave the way we would expect them to under normal situations. The best way to handle problematic situations is to avoid creating a scenario where they happen in the first place.”
Avoiding these common pitfalls can help you and your clients through the process.
Pitfall #1: Choosing sides
In divorce real estate, perhaps the No. 1 rule of thumb is to maintain neutrality and professionalism. Giving any sense of favoritism to one side or the other could spell trouble for the transaction. “With divorce listings, you represent two clients in conflict. If one party thinks you’re favoring the other one—if there’s even a perception of bias—that opportunity can blow up in your face,” says Stevens.
How to avoid it
Avoiding this pitfall requires meticulous and carefully planned communication. “Be very careful about the information you share amongst the parties,” says Stevens. “If it’s material to the transaction, then you need to disclose it, but you better factor in the overall legal matter that’s going on.” For example, if spouse A’s new boyfriend moves into the house while it’s on the market, it may be of significant interest to spouse B. But it’s not material to the sale and probably should not be disclosed.
“You need to be a vault of confidential information,” says Brenda Thompson, CRS, CEO/managing broker of HomeSmart Stars in the Dallas-Fort Worth, Texas, area. “It’s remembering, we’re here for a reason, we’re here to be a professional and help them with a business transaction.”
For Pat Tasker, CRS, an agent for Shorewest Realtors in Wisconsin, strategies for keeping communication targeted and streamlined are imperative to conveying neutrality. “Make sure not one or the other is getting more attention or more communication. They’re already emotionally on edge going through the divorce, so you don’t need to add anything to it,” she says. “I write the same email to both parties. If they are not willing to share their emails with each other, be really careful and be sure to send blind carbon copies. The same thing goes with text messages—put everything in a group thread.”
Special Training for Divorce Listings
“Just having gone through a divorce yourself is not training enough,” says Diallo Stevens, CRS, licensed associate broker and professional real estate consultant of KW Gold Coast, serving the New York City metro area.
He recommends training for those agents who have a passion for working with these types of listings, but it may not be the end-all, be-all. “It’s one thing to have some awareness and some book knowledge, or go to a class or two,” he says. “But it’s about temperament and the question of, how much of your time are you willing to devote to this?”
Kathryn Hoffman, CRS, an agent with Century 21 Affiliated in the western suburbs of Chicago, says the complicated nature of the transactions makes her a proponent of specialized training. “I needed training to make sure I was handling things properly,” she says. “Because you don’t know what you don’t know until somebody says, ‘Here’s a situation, what would you do?’ There are just some landmines that we know are coming up, and we are trained to handle them.”
Pitfall #2: Getting emotionally involved
Maintaining this neutrality can be difficult when you’re working with people who are upset and vulnerable. “One or the other, maybe even both, spouses are going to be highly emotional,” says Thompson. “It’s OK to listen. And it’s OK to be the shoulder. You just have to remember not to get too deeply involved in the emotions beyond being empathetic. Otherwise, you’re going to alienate one or both of them.”
How to avoid it
Kathryn Hoffman, CRS, an agent with Century 21 Affiliated serving the western suburbs of Chicago, says avoiding emotion comes from staying on task. “It’s very important to not play therapist. Try to redirect their focus,” she says. “I try to refocus their attention to answering my questions. It’s about saying, ‘I am so sorry to hear that, that sounds like it’s really hard on you. Are you able to have a showing on Tuesday?’”
Thompson recommends compartmentalizing the relationship with each party and treating them separate. “It’s sometimes difficult to remember how to be empathetic without getting in the middle of it. Keep your professionalism intact,” she says. “There’s emotion every day when we do our jobs. But it is critical that you remember the goal: to get their house sold.”
Tasker, who recently experienced an emotional outburst from a client, says, “You have to be ready for anything. And you can’t take anything personally because they’re just under so much stress.”
Pitfall #3: Counting on a windfall
On paper, divorce listings can be enticing. After all, clients are motivated to move, and the sale could result in two separate buyers. But beware of being overly eager to close the deal. “A lot of agents will say, ‘Oh, I want divorce listings because they have to sell.’ No, they don’t. They may sell, they probably should sell, but it may take a long time, and it may not work out at the end of the day,” says Stevens. “And if the agent goes in and says, ‘Hey, I’m going to get at least two commissions on this. Maybe I’ll get three when the husband’s ready to buy,’ we may be creating a situation where there’s a lack of trust, … and failure to build that trust can cause all sorts of issues.”
How to avoid it
For her part, Hoffman focuses on the sale for her clients and does not get involved in becoming their buyers’ agent. “I will bring in somebody else to help them find that next house,” she says. “I want to make sure they understand I’m working for them to get the home sold and to move forward.”
Thompson compares the toughness of divorce listings to short sales. They both require patience and the realization that the reward comes from helping people in a tough spot. “I feel the most satisfaction out of being able to take care of someone, help them through whatever might be a difficult situation and get them on to new things,” she says.
Stevens says this means focusing on what’s best for the client, even if it means losing the sale. “If they want to keep the property, if there’s a way to do that, then I want to help them do that. That might sound counterintuitive because I don’t get paid. But it’s about establishing trust and credibility, and doing the right thing.”
Pitfall #4: Not doing your legal homework
Failure to do proper discovery early in the process can be problematic, especially as divorcing clients could be in a precarious financial situation and may not be upfront with disclosure. In some cases, legal complications such as restraining orders and bankruptcies can affect progress. “The agent needs to understand, are there orders in effect that impact how that agent can do their job?” says Stevens. “Maybe the mortgage hasn’t been paid. Maybe other creditors are putting liens against the house. You need to know if they have the equity and the legal authority to complete the sale.”
In addition, state laws around community property can be complicated and affect each partner’s interest in the sale. “Agents need to know whether both parties need to be involved in the listing of the current property, and the purchase of a new property. You want to know the rules, know the laws and know how to handle that. Because that could be a huge pitfall,” says Thompson.
Hoffman says being keenly aware of clients’ financial situations is another key area to research, and the financial stressors of the past year, including job loss and underemployment, have complicated matters.
“I can’t say how huge this has been on divorcing. Many times, a client’s first question is, ‘How can I stay in my home?’ And it goes back to financing. There are more in-depth questions there that you need to ask, but gently so,” she says.
How to avoid it
“I have a system and a process that is designed specifically for divorce real estate transactions, designed to get the information that I need, so that I can prevent those kinds of issues,” says Stevens. “So if it is a restraining order, we’re going to talk about it ahead of time. I’m going to communicate with both spouses and educate them on the rules of the road. And if you do that, then these things don’t tend to escalate or explode.”
Part of the complication lies in not getting the full story from clients. Hoffman says you shouldn’t just take clients at their word and must do your homework. “It’s trust, but verify,” she adds.
Experts recommend that agents partner with the divorce attorneys early. “If an agent doesn’t understand the legal process and how it fits into the overarching situation they’re going through, an agent can easily find themselves in big trouble,” says Stevens. “If the attorneys and agent partner early, lots of these landmines can be avoided, minimized or at least mitigated.”
Still, working with attorneys isn’t cut and dried. “Attorneys don’t necessarily always want to partner with the agents. So developing the credibility in the eyes of the attorney is very helpful,” says Stevens. “They’re playing a game of chess, and the house is just one piece of it. So we can’t expect they’re always going to play the game the way we would like them to play.”
Love in the Time of COVID
While initial data showed that COVID-19 may have caused rising divorce rates early in the pandemic, recent findings show that rates actually fell in 2020 to a 50-year low, according to research from Bowling Green State University’s Center for Family and Demographic Research.
The pandemic has added layers of complexity to every real estate transaction, including divorce listings. “People have kids, they have jobs and maybe they’re working from home. It’s hard enough to move, before you layer on the divorce and COVID,” says Pat Tasker, CRS, an agent for Shorewest REALTORS® in Wisconsin.
Beyond the difficulties of in-person meetings, setting up safe showings and holding open houses, the pandemic makes it harder for people in conflict to work together. “COVID is a very easy excuse [for one party] not to cooperate,” says Diallo Stevens, CRS, licensed associate broker and professional real estate consultant of KW Gold Coast, serving the New York City metro area.
However, COVID has also created some opportunity. “I did a divorce sale a few months ago,“Stevens says,” and because the market had such pent-up demand, I was able to sell the property for much more than it would have normally been worth.”
For more pitfalls to watch out for and tips to properly represent both clients, check out the recording of the Agent Beware – Divorce Ahead webinar on CRS.com/catalogsearch.
Photo: iStock.com/mofles
