Buying a 'Divorce' Home Has Its Perks

divorce homeDivorce is rarely a happy occasion, but David Kaufer and his wife, Renee (pictured left) -- who are happily married -- have had more than one occasion to celebrate another couple's split. They are owners of a "divorce" home.

Indeed, the Kaufers purchased their last three homes from divorcing couples.

"We have not actively sought out homes that were for sale by couples who were divorcing, but it's worked out that way," says David Kaufer, a 45-year-old Zenwerks marketing executive who moved to Edmonds, Wash., in suburban Seattle from the Bay Area in 2005.

Buying a house from a divorcing couple has its advantages and disadvantages. Sometimes you can get a better deal if the couple needs the money and wants to sell, and sometimes "a divorcing couple could blow up a deal and you could lose your financing and your mortgage lock date," says attorney Stuart Slotnick, of New York's Buchanan Ingersoll & Rooney, who has
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experience in both real estate and marital law.

In one case, a disgruntled husband in a very ugly divorce turned on all the faucets in the house the night before the pre-inspection on the closing date and flooded the house, he says.

"Buying from couples who are divorcing is a huge advantage because you have all the leverage," Kaufer says. "One or both of the parties is usually superanxious to sell the house and just be finished with the process. In all three cases when we bought houses from couples who are divorcing we got our houses well below asking price -- even during the overheated markets."

Kaufer says he even got a good deal on a "killer desk set" and some other furnishings from the sellers who wanted to dump items so the spouse wouldn't take it in the divorce. "We got the desk set for something like $25 because the wife wanted to dump it. And we got some nice rugs and a couch from him for something like $100 [because] she had picked out the items."

Judith Weiner, a north suburban Chicago Realtor, says that buyers can sometimes get good deals on homes sold by divorcing couples because they just want to be done with each other already. But in some bitter divorces, she says, the process can get tied up and the home never sold despite multiple offers.

In one case where she represented the sellers, Weiner, whose Coldwell Banker office is in pricey Highland Park, Ill., says she brought three contracts to one set of sellers. The husband, who was living in the house, said no each time, even to a full price offer. To boot, she says, "The house was a mess. He never kept it clean. It was difficult to show. He always put up obstacles for selling it. The wife had been living in a rental. She needed the money to move on and get on with her life. He went ahead with the whole selling thing just to stall her until she couldn't do it anymore and then she gave up."

But it's not just husbands, sometimes the wife can hold up the deal, too, says Miami-area Realtor Andre Shambley. In a case he dealt with, the husband and wife had separated and put the home on the market for the amount the wife wanted, which was much higher than its value, Shambley said. When he brought in buyers he had them insist on an appraisal contingency. As he suspected, the property appraised under what was initially offered. "We figured the wife would come to her senses [and accept a lower amount], but she still was not willing to budge. Subsequently, the deal fell through."

Experts who talked to AOL Real Estate say that it can be advantageous to buyers to know up front if they might be dealing with divorcing sellers. There are ways to find this out, and then steps you should take when looking to negotiate a contract with a divorcing couple. Here are some of their suggestions.

Ask Your Agent

"If I had a buyer and I suspected by walking through the house there was a divorce I would ask to the agent, 'Is this an amicable divorce?'" It makes all the difference, Weiner says.

Kaufer says the agents told him each time when he simply asked, "Why are the sellers moving?"

But listing agents really shouldn't reveal this information, says Weiner, who adds that when she is the listing agent she tells her clients to try to mask the reason by making sure that clothes of both genders remain hanging in the master closet.

Look for telltale signs.

Dead giveaways are when there are family pictures on a table or wall, but none have the husband, or the couple together. Or, pay attention to what's in the closets. If you don't see any men's clothing, you kind of think something is wrong, especially when there is evidence of children in the home, Weiner says.

Expect delays, but put a time limit.

Some of the experts we spoke to have seen couples where each has his or her own real estate agent representing them in the sale, as well as their own divorce attorneys and this can really slow down the flow of communication to the buyers.

"The buyer may need to give the sellers a little more time to respond to the offer," says Pam Roderick, a Minneapolis-area real estate agent with Prudential Lovejoy, who says, as a divorcee herself, she understands the stress these couples go through "Buyers don't know if the situation is amicable or if there are attorneys involved that each one must contact."

She adds, "It is a good idea to give deadlines for responses so you keep the process going forward. Make sure everything is in writing and signed by both sellers."

Do they have one spokesperson?

If you're dealing with a couple heading toward splitsville, see if they have just one representative to speak on their behalf, whether it's the real estate agent, a real estate attorney or a receiver. If the sellers or the court empowered someone to make the final decision for them should they disagree, then you can relax.

"You don't want the husband and wife to have their own lawyer in a real estate deal," says Steve Glassberg, a New York real estate attorney. "I represented a buyer where the sellers had two lawyers. I was getting mixed signals from each." When it came to money back for repairs or on what date to close, "One said yes and one said no. It was difficult."

In some contentious divorces, the court will appoint a receiver to handle the negotiations and accept an offer, says Curtis Harrison, a Dallas-area divorce attorney who often represents home sellers. "Generally those types of offers go through fairly quickly because the receiver has the discretion to accept an offer."

Do your research and you decide.

Not sure if the house you fell in love with is being sold by a couple going through a divorce? A little footwork makes the difference, say the experts. If your agent hasn't heard through the grapevine or by directly asking the sellers' agent, do a little footwork of your own.

Before you put in an offer, ask the neighbors if they know why the sellers are selling. Someone is likely to spill the beans.

Also many states list divorce filings on state websites. Find out the sellers names from property records and cross list it with divorce filings to see if the couple recently filed for a divorce.

If you do find out that the sellers are going through a divorce, "Don't assume the seller is playing games. They are usually doing the best they can," says Roderick, who has represented many divorcing sellers. "It is definitely more stressful on these type of sellers than the normal home sale."

But if negotiations seem to be deteriorating, "Always have the strength to walk away because sometimes you may have no other choice," says Shambley.

Sheree R. Curry, who has owned three homes and sold one due to divorce, is a three-time, award-winning journalist living in the Twin Cities who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been with AOL Real Estate since 2009 and seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.

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