Buying from a Divorcing Couple – Potential Pitfalls

The main drivers for properties coming to the market are traditionally the 3Ds – Death, Debt and Divorce.

Debt is playing less significant role as low interest rates mean that property owners are less likely to find themselves unable to pay their mortgages. Death is more low-key as there is a growing trend for homeowners in their

Death is more low-key as there is a growing trend for homeowners in their latter years to pass the property on to family before they die, or sell up and downsize dramatically after their family move away. Smaller properties are often retained as investments rather than sold by inheriting family members.

The 3rd D, however, is gaining a wider definition.  Divorce is increasingly common, but the same challenges apply even if wedding bands weren’t exchanged, if a couple who own a property jointly split.  Furthermore as initial home-ownership has become so expensive, there has been a rise in friends and family members pooling resources to buy together to get on the ladder – and when one person’s circumstances change, not everyone involved might be on the same page.

Stacks advises that understanding sellers’ motives is an important part of the buying process and can often influence the success of negotiations and transactions. Unpredictability is the key word when dealing with divorcing couples. Property transactions are rarely completely straightforward, and when separation is involved, there is a whole range of additional complications. For instance:

• The desire to sell may not be bi-lateral. One party may be less keen to sell than the other and will be looking for reasons not to. They may be obstructive in the viewing process, and may be giving conflicting instructions to the selling agent and/or their solicitor.
• The decision to sell may be reversed. One partner may raise enough equity to buy the other out; or there may be a reconciliation.
• The property may be significantly overpriced. In a separation situation, the vendors are looking to replace one property with two, and the realisation that half the money gets less than half the house being sold, makes vendors sometimes wildly optimistic in their valuations.

There may be uncertainty right up to the last moment. A higher offer may be particularly attractive to a divorcing couple; there may be a change of mind; or one party may simply decide to spoil the deal out of spite.

 Stacks’ advice to purchasers who think they may be dealing with separating vendors is to:

• Try to establish the true situation. Ask the agent straight out; if they know, they should tell you. If they haven’t been informed, you can often pick up reliable signs yourself when viewing – it’s quite easy to spot signs of one party having either moved out completely or partially. The master bedroom and bathroom offer the best clues. The female party will often talk openly to another woman, so if you get a chance to talk sympathetically to the vendor, do.
• Remember you’re dealing with two separate people, not one vendor. Don’t assume that the message you’re getting from one vendor is the full picture.
• If you decide to buy, go for a quick exchange and press the deal hard at a sensible level. The more protracted the negotiations, the greater the opportunity for a change of heart.
• Be straight yourselves. If you move the goalposts on timing, price, or any other element of the deal, it may just push the vendors over the edge. You are dealing with people at a very emotional time in their lives, so sensitivity on your part will, to some extent, prevent the trauma that vendors are already suffering from the break-up of their partnership from spilling over into the buying/selling process.
• Assume that the transaction will be complicated and that there is a greater than normal chance of the deal falling through. KEEP LOOKING, and keep your options open. If it’s imperative that you’re in the new house by a certain date, be careful.

If you have lost out due to any of these scenarios, or perhaps you are coming out of a split yourself,  is it time to consider whether hiring a professional property expert such as Stacks could save you time, money and heartache?
We are always happy to offer advice over the phone, so please just call.