Divorce is one of the most challenging transitions in life, and real estate decisions play a crucial role in the process. A successful divorce settlement often requires collaboration between multiple professionals, including family law attorneys, Certified Divorce Lending Professionals (CDLPs), and real estate agents who specialize in divorce. Together, this team ensures that divorcing clients make informed, strategic real estate decisions that align with their financial and housing goals.

This post explores how real estate professionals and family law professionals can work together with a CDLP to create better outcomes for divorcing clients.

Why a Collaborative Approach Matters

1. Ensuring a Smooth Real Estate Transaction
   • Divorcing couples often need to sell their home, refinance, or transfer property titles.
   • A CDLP collaborates with realtors and attorneys to align financing with the divorce decree and prevent post-settlement issues.
2. Avoiding Common Pitfalls in Divorce Real Estate
   • Many divorcing clients face challenges such as title issues, financing roadblocks, and unrealistic home valuation expectations.
   • Working together, attorneys, lenders, and real estate agents who specialize in divorce can avoid legal disputes, delays, and financing denials.
3. Protecting Both Spouses’ Financial Futures
   • A realtor can help set realistic pricing and market expectations.
   • A CDLP ensures that financing aligns with both parties’ long-term housing and financial goals.

Case Study: A Divorce Sale in Bloomfield Hills

Scenario:

A divorcing couple in Bloomfield Hills needed to sell their $750,000 home and divide the equity. The wife planned to purchase a smaller home, while the husband wanted to refinance and keep an investment property they jointly owned.

Challenges:

• Document Signing: The marital home’s title was jointly held. Both parties were required to sign and agree to the listing agreement with their realtor, and the purchase agreement, upon acceptance of an offer. Divorce is sometimes contentious, and getting signatures from uncooperative parties can be exceedingly difficult.
• Emotional Roadblocks: The couple had disputes about listing price and sale timelines. These roadblocks can impact the homes’ availability to be shown to prospective buyers causing undue stress to the sales process.
• Financing Hurdles: The wife needed pre-approval for a new home, but initially her spousal support income was not going to begin until the month after the sale of the home.

Solution:

As a Certified Divorce Lending Professional, I:

1. Coordinated with the Realtor and Attorney: Ensured there was a plan in place to obtain the necessary signatures required for the sale to limit delays.
2. Helped the Wife Qualify for Her New Mortgage: Since we needed to use the spousal support income to qualify, we needed to be ultra-aware of our timelines. I educated all parties on the mortgage guidelines related to support income and it was agreed that spousal support would begin immediately upon final judgment of divorce. The shortest amount of time support can be received to be eligible to be used in mortgage qualifying is three months for FHA financing, conventional requires six months. In this case, without temporary orders for support, and the help of the realtor, she was able to negotiate 60 days of occupancy post sale, the first 30 she rented from new owners and the second 30 were free. It took 30 days to list and close on the sale of the home. You see where this is going. 30 + 30 + 30 = 90. Now we have 3 months of receipt of support, and we closed on her new home without her needing to move twice.
3. Helped the Husband Refinance the Investment Property: The husband decided to move into the investment home and make it his primary residence. We proceed with a limited cash out refinance for him as his primary residence. Since the mortgage industry considers spousal support obligations as a transfer of income and not a liability, we were able to deduct his spousal support obligation from his income vs counting it as a monthly liability, giving him a much more favorable debt to income ratio.

Outcome:

• The home was sold slightly above market value with no delays.
• All documents post-divorce were signed and executed in a timely manner.
• The wife secured financing for a new home.
• The husband successfully refinanced the investment property in his name as his primary residence.

This case highlights the power of collaboration between real estate professionals, attorneys, and a CDLP in creating a smooth transition for both parties.

Why This Matters for Divorcing Homeowners in Michigan

• Strong Housing Market: Michigan home values continue to rise, making informed real estate decisions critical during divorce.
• Unique Legal Considerations: Michigan is an equitable distribution state, meaning property division must be fair, not necessarily equal.
• Seasonal Market Trends: Divorce real estate transactions must be timed carefully selling in winter may take longer, but refinancing is usually pretty quick in the winter months before homebuying season gets underway.

Call to Action

For Divorcing Clients:

Navigating real estate during a divorce can be overwhelming. Whether you need to sell your home, refinance, or buy a new property, I can help ensure the process aligns with your financial and legal goals. Contact me for a free consultation today.

For Family Law Professionals and Realtors:

Are you working with divorcing clients who need real estate guidance? Partnering with a Certified Divorce Lending Professional ensures smooth transactions and prevents post-settlement issues. Let us work together to provide seamless solutions.