Common Sen$e: A House Divided ART WOOD
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few years ago, I attended a “Divorce This House” training and received my RCS-D designation (divorce real estate specialist). Having never been through a divorce personally, my eyes were opened wide by all the horror stories of divorce, and how things went horribly wrong. For most people, when divorce happens, it happens once, maybe twice in their life, so they aren’t divorce experts. They are rookies and don’t know all the right questions to ask. They lean a lot on their attorney or mediator to guide them, but often those folks don’t ask the correct questions either. Let’s start with a typical divorce scenario. A husband and wife have owned their house for several years but are now getting divorced. The divorce decree says the wife gets the house but has to refinance within twelve months to remove the husband’s name from the mortgage, and she has to pull out cash to “buy out” the husband’s portion of equity. Sounds cut and dry, right? Well, not this time. You see, the wife was a stay-at-home mom and had not worked in years while she was raising the kids. The alimony and child support she is now receiving isn’t enough to qualify for a mortgage, and now she must go get a job, but even that isn’t enough to qualify for the home on her own. Through no fault of her own, the wife is now in contempt of the decree because she can’t live up to the terms. The ex-husband is furious because his name is still on the mortgage, and he can’t get his portion of equity out. All this frustration could have been avoided had their lawyer or mediator had them first speak to a mortgage professional. If they had come to me early in the process, the divorce decree would have looked differently. It would have either forced the couple to sell the house, or at the very least given the wife more time to refinance, but with a finite period to force her to sell the house if he cannot refinance in that period. So, it’s the same scenario as above but in this one, the wife was indeed able to refinance after a few months, but she starts having a ton of problems with the house. The roof is leaking, the HVAC has gone out, and suddenly, she is getting water in the basement. At this point, the ex-husband has gotten his money out of the house, but the wife has $40,000 worth of repairs that need to be completed for the house to be livable. All of this could have been avoided and negotiated had the couple paid an inspector $400 to inspect the property and all the deferred maintenance would have been laid out on the table during the mediation process. A divorce decree is pretty much set in stone and for it to be changed, all parties must bear the expense of going back to court to get the agreement amended. My suggestion for anyone going through a divorce is to consult not only an attorney or mediator, but all the other professionals that can help. My short list is mortgage professional, real estate agent, home inspector, appraiser, financial planner, CPA, and insurance specialist. Spending some quality time with these folks before finalizing your divorce will ensure that your financial part of the divorce decree will be accurate and executable, so you can concentrate on the next chapter of your life.
ART WOOD (NMLS #118234) is the branch manager of The Art Wood Mortgage Team of Goldwater Bank, located at 2341 Main Street in downtown Tucker. “Tucker’s Mortgage Guy” for sixteen years, he is a former Tucker Tiger (Class of ’92), and co-founder and organizer of Taste of Tucker. Family guy, community guy, and definitely not your typical mortgage guy - it’s all that he does that makes Art Wood who he is. Contact him at 678.534.5834 or art.wood@goldwaterbank.com.
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