Join us for our live event as we sit down with Certified Divorce Real Estate Expert, Laura Rumford, to discuss why real estate is an important discussion in any divorce, and living arrangement options to consider as you navigate this big transition.
If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.
To learn more about how Laura can help you, you can visit her website: https://laurarumford.premierepropertygroup.com/
Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.
Join us for our live event as we sit down with Certified Divorce Real Estate Expert, Laura Rumford, to discuss why real estate is an important discussion in any divorce, and living arrangement options to consider as you navigate this big transition.
If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.
To learn more about how Laura can help you, you can visit her website: https://laurarumford.premierepropertygroup.com/
Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.
Intro:
Welcome to Modern Family Matters, a podcast devoted to exploring family law topics that matter most to you. Covering a wide range of legal, personal, and family law matters, with expert analysis from skilled attorneys and professional guests, we hope that our podcast provides answers, clarity, and guidance towards a better tomorrow for you and your family. Here's your host, Steve Altishin.
Steve Altishin 0:28
Hi everyone, I'm Steve Altishin, Director of Client Partnerships at Pacific Cascade Legal, and today we have Certified Divorce Realtor, Laura Rumford, to talk with us about why buying or selling real estate should not be an afterthought in a divorce. Hey, Laura, how you doing today?
Laura Rumford 0:28
I'm doing great. Thank you, Steve. And I appreciate you inviting me to join you today.
Steve Altishin 0:38
Oh, this is gonna be great. So before we start in, why don't you just sort of tell us a little bit about yourself, and you know, how you came came to be to this particular sort of spot? Well,
Laura Rumford 1:07
Well, yeah. So as Steve said, I am a certified divorce real estate expert. And very broadly, what that means is that I'm not only an accomplished realtor and principal broker, I have also sought out a very specific designation called a cdre, certified divorce real estate expert, which sets me apart as somebody that has gone the extra mile, and I'm constantly working on even expanding my knowledge and my skills, specifically in the divorce realm as it pertains to real estate. If you're wondering what my accent is, by the way, I'm from South Africa I've been in the United States have since 2006. And you asked me as well, what brought me to wanting to study to be a cdre? Well, personally, very personally, I went through a divorce myself in 2018. So I understand firsthand, the process and what's involved. In addition to that, I, when I lived in South Africa, I was a chartered accountant in this country, it's called a CPA. So I have an in depth knowledge of numbers. And I really, really understand how important it is for us to take care of our financial, state of affairs, and how important it is for people to make wise financial decisions, especially at this juncture in their lives. It's a really big, emotional time. And we need to be mindful of making good choices. So I hope that brings you a little bit of understanding,
Steve Altishin 2:35
Oh it's perfect, you're perfect for this. Because, you know, as much as anybody, you know that divorce is inherently stressful. I mean, legally, financially, emotionally. And, you know, I imagine that when you need to decide where you're going to live afterwards, the strain is like, just ramped up. So you know, what can you say to a person who is in a divorce or even contemplating divorce, about buying and selling their house at this time?
Laura Rumford 3:08
Well, absolutely, it is a very big stress in life. And it's not to be underestimated. That's the first thing that I really want to, first of all, praise you for taking the time to listen to this, and recognizing where you're at right now, it's a particularly stressful time, you're not only dealing with the emotional side, you're also dealing with financial design, you're dealing with a lot of administrative tasks. And on top of that, all, you're dealing with the legal side of the divorce process, it maybe the first time probably is the first time you've ever been in a litigation situation. So that's a huge stressor. And then on top of that, you're not sure where you're going to live, whether you're going to stay in your home or move, you're probably taking care of administrative things like changing your bank account, maybe changing your personal name. And if the kids involved, likely that's adding a whole new dimension of stress, where you're not sure, if they don't know yet about the divorce, you don't know how they're going to deal with it emotionally. And you also have uncertainty around how they're going to respond to potentially moving homes. You might have a lot of emotions tied up in your marital home. Maybe the kids were born when you live there. You know, and again, that uncertainty, just as as a little point that I looked into stresses, and the home's raw stress inventory, actually lists divorce as the second biggest stressor in our lives, potentially affecting our physical health. The first stressor is the death of a spouse. And the second to that is divorce. And then very high on that list. And on that scale, are also things like a major change in your financial situation, and moving home. So you're putting all of those things together into one bucket, and trying to navigate it all at once. And that's enormous.
Steve Altishin 5:00
It's crazy. And I'm coming into the to end, I've got, again, all these different stressors, including numbers, you talked about being a numbers person, and I'm not a numbers person. And so there's there's that going on. There's the kids going on, there's where am I going to live going on? And so maybe, can we just start also with some options that might be available for someone in divorce, you know, that, you know, with their new living arrangements, you know, maybe permanent type, maybe temporary type. But if I say, Where do I go from here? What can I do? What what kind of things? Can they do? Where are some options from living arrangements?
Laura Rumford 5:44
Absolutely. And as you say, the financial side of things is a big component, but also the emotional well being of kind of trying to visualize what your future may look like. Now, while the financial side is going to impact that, here's some things that I've seen people doing and my perspective on them. Every single situation is different. Every single relationship is unique, and every single divorce is unique. And so only you can really answer how these things resonate with you. But I have seen people continue to cohabit, sometimes for a very short period of time, sometimes for a long period of time. And again, this is going to depend on how you and your soon to be ex, how you're able to navigate that, whether or not this works for you, I would think that long term, this is definitely not going to be a great arrangement. Especially if in the future, you'd might not want to think about it, but perhaps is a new partner that comes along. So this really should be thought of as a very short term option. And it's often done just because of the financial logistics and trying to just navigate what you're going to do next. The next option I've seen is something that you've probably heard bandied about called nesting, that's when to partners, especially when kids are involved, the kids stay in the home. And instead of the situation where the children pack a bag and navigate each week, between those two homes. This is where the children stay in the home. And the partners rotate out possibly each week, it may be to a location such as a an apartment that they've rented that each of them rotates into, sometimes it's to a parent's house or a friend's house. And again, this I see is a very short term solution. And it's not really a solution. Ultimately, the kids are going to have to navigate this. And as hard as that is, they'll do pretty well mine. Personally, mine did really well, in the long run. But the problems I see with this are Imagine that you are really frustrated with your partner, because he or she is particularly messy, they leave the clothes on the floor, then it washed it dishes, they don't pick up after themselves. And that's really been a frustration for you. Well, now picture that you are rotating potentially into this space each week, on top of all the other stuff. So you may be moving into that shared apartment where they've left a horrible mess for you. And then you move back to the home and the kids bedrooms are a mess and stuff is left everywhere. And you're constantly picking up after them even now in post divorce or during the process of the divorce. So again, whilst a lot of people think this is a wonderful solution for the kids, it can bring a lot of added trauma to the parents lives as a short term solution. Then the next one that we often hear is called an equity buyout. And this is where one spouse I'll call it, the spouse decides they want to stay in the marital home and the other spouse agrees to move out. And then there's a Shared Equity in that home that they've accumulated over the course of their marriage or time that they've owned the house. And so there are various different ways to arrive at Net equity. But an equity buyout essentially involves removing the out spouse, the person that's moving out from title and also removing them from the mortgage. So that's something that I'll dig into a little more further on. But it is important that they're not only removed from title but also removed from the mortgage. And then the other two options are selling the home and potentially renting for a while a lot of people don't want the permanence of buying a new home right at the outset of their separate life. They want to figure it out. But there are a lot of people who've lived in an area that they familiar with, and very happy with and perhaps they have children that go to school in that area. feel very comfortable buying a new home right away. So those are kind of the options for your living arrangements from from my experience, and maybe there's some creative ideas out there that I haven't seen yet. But that's about that's about all I've come across right now.
Steve Altishin 9:47
A lot of options, a lot of great information there. And so you're beginning to consider these options we're going to start looking at you know, okay, how do I avoid valuate these options, and I'm maybe looking at from a again, sentimental point of view, a emotional point of view or a point of view of what's best for my kids point of view. But you're also looking at it from, like you said, one house, two people. And that's where numbers can come in. And so once you know, what sort of things do you evaluate, or help them evaluate when they're looking to make that decision? What am I going to do with the house?
Laura Rumford 10:36
Absolutely. And I'm often speaking to people early on in the process. When they're still considering divorce. Sometimes they come to me confidentially for some advice on their options. And I always welcome those opportunities to assist people in trying to decide what their options are. Also, I will give attorney referrals or couples choosing me due to my designation later on during the litigator process when they've already decided what they want to do. But in all those instances, there's a few key things that people need to have a handle on. And one is, do they know what their house is really worth? All too often, I see people finding a settlement agreement, just based on a Zestimate or Zillow estimate or Redfin estimate, or these, these computer generated valuation models. Now, they're pretty smart, these valuation models, but they're not human. And so when you have a human being going in and actually seeing the house and walking through it, they can get a perspective on the actual condition of the home, the actual circumstances in that neighborhood, etc. Does it back to a busy street, etc. And there's three different kinds of acronyms or valuation type scenarios that we see typically, and just want to get a bit of a latch onto those one. Most people have probably heard of called a CMA, also called a comparative market analysis. Now, these are typically performed by real estate professionals, when somebody is considering listing a home, or even if they're representing a buyer in the purchase of a home, they want to see that they believe that there's value for the offer that's being made. So a real estate professional will go and look at the house, they'll take into account all of its significant, comparable factors like how big it is, again, the condition of the home, where it is the kind of neighborhood maybe the schools factor in and the actual location is there, a park nearby, etc. And they'll look at comparable properties kind of geographically close to that home and see severe circumstances they may have to look broadly if it's a very specific exclusive kind of residence. So they'll we're having an estimate of what they think the market believes that house will sell for, and the tivity. A CMA is a range of value with an opinion on where perhaps that property should be listed at the outset. Now, a BPO, also called a broker price opinion, is very similar to a CMA. But it's normally used in a different scenario typically prepared for a third party, like a judge, or the IRS, or it may be prepared very often, when a lender asks for it during a distress sale, such as a foreclosure or short sale. And this isn't typically a more in depth analysis, it's still not an appraisal, which is the last one I'll visit. But when I perform a broker price opinion for clients, especially those going through divorce, I will prepare that by going and visiting the home walking through the home actually recording pictures of the home because sometimes one spouse has not even been in their home for a number of years. It all depends on the circumstances. And I prepare that in a way that I have a great deal of knowledge about the situation or speak with both of the spouses about the home etc. and I provide a neutral opinion on where I believe the market would would say the house should be listed or what the likely selling price is. appraisals, on the other hand, are where a licensed appraiser will come to the home and they will not only look at the home, they will also measure it accurately for square footage, they will look clearly at various different aspects of the home, they will go into the attic space in the crawlspace. Those are not things had to as a realtor. And an appraiser is usually used to establish value as it pertains to a mortgage the lending process when somebody is purchasing a home, because the home is seen as the collateral for the loan that that lender is going to be giving out. So an appraiser is the only person actually licensed especially in Oregon, to define value, exact value. A realtor will bring their knowledge of the market and be able to give a very good opinion on lackey selling price, but it appraises lessons to give value.
Steve Altishin 14:55
I really love that. Especially when you're your broker Your opinion because, like you said, you talk to people before they even maybe get a divorce. And you can, you know, give a pretty in depth opinion that they can use when and if they do. But if you get an appraisal a year before the divorce in pay for that, then maybe you're going to have to go ahead and get another one, you know, then so I like the idea of having some options in anticipation, because a lot of this is about, you know, it's not an afterthought. It's a, you know, get your ducks in a row. And so that kind of helps. And that leads to kind of another question that people I think, aren't completely sure about, although it seems, is worth it's worth this. So that's what I'm getting. But there's this thing, equity position. And so can you talk about what that difference is? And why what the house sells? Where is it necessarily what you get?
Laura Rumford 16:02
Exactly. So you know, there may be a lot of costs to establishing that selling price. And those are, perhaps the house needs a new coat of paint, perhaps it is in desperate need of a new roof. And we can navigate all of those if there's no money to do it, we can find solutions. But there are significant costs. So we need to be aware of what the likely costs are going to be to sell that home. As well as the costs of actually the the escrow and sales process. Realtors don't come cheap, they don't come free. And so that's a cost of selling the home. And also there's closing costs and escrow costs and various different things. So not only that, there are liens attached to the property almost in every single case. And those liens could be most likely there's a mortgage, that has to be paid off. And it needs to be paid off at a foreign point in time. There may be property taxes that are due, there may be spousal support judgments, things like that. And they may also be home equity lines of credit, sometimes unfortunately, they are liens that perhaps one spouse is not aware of. And so, you know, one of the things I bring us as the knowledge of that with the knowledge of that as a cdre is I have in an escrow process, I have my title company run a preliminary title report, very early on in the process, as soon as I get a listing, because I want to be sure that there's no curveballs, there's no, you know, last minute nasty surprises where somebody thinks they're going to get 300,000, I need to find they're gonna get 100,000 I don't want that to happen to my clients, I want them to know. So yeah, that's, that's really the answer your question, I hope?
Steve Altishin 17:47
Oh, I love that in that kind of gets to, well, okay, this whole mortgage thing, and I just want to get that out of it. And so Doug can just sign something and then and then I walk away. And I don't have to worry about any of that anymore. Or does that actually what happens?
Unknown Speaker 18:12
Well, this gets back to what I referenced a little earlier on. And a huge problem I see very often in divorces, is sometimes people will come to me a little too late in the process. And they may already have a judgment that says something like spouse, x will be removed from title and spouse, a will, will remain on title and remain on the mortgage and spouse x will be removed from the mortgage. Well, there's only there's not very, it's not very easy to remove somebody from the mortgage, whilst one spouse can sign off on title Yes. The contract between the lender and the parties on that mortgage, it's a private contract, the court cannot dictate to the mortgage company that they should remove somebody from the mortgage, the only way to do that is either through refinancing completely, which is not always as favorable as we'd like it to be right now the interest rates are higher than they were and a lot of people are in the load 2% or 3% mortgages. And sometimes people think about assuming the loan, I'd caution you that that is extremely difficult. It's very, very, very slim chance sometimes somebody can assume the loan. And then there's another instance where people sometimes say, I'm going to move out of the house. And I'm just going to stay on the mortgage because I don't care Do you can you can have a title I'll sell a mortgage or or you can refinance in the next couple of years. And that might sound like a good solution for some people, but the party that's moving out essentially becomes what are referenced as divorced from their spouse, but married to the mortgage. They can't really move on because they are still there. are jointly and severally liable for the payments on that mortgage, even if the spouse that's staying in the house is making all the payments, it's still going to reflect against the credit report if the spouse misses a payment, and it's going to hinder them from potentially moving on and buying a new property, because that's going to reflect on their debt obligations when a lender comes to qualifying them for a new loan.
Steve Altishin 20:21
And the kind of upshot of that then becomes, well, what do I do? I mean, how do I know if I can afford to even stay in the house? What do I do to figure that out? Or on the flip side? Can I afford to buy a new house? I mean, that has to go into something that they need to know. Because it depends whether they're going to sell, buy or stay.
Laura Rumford 20:45
Absolutely. And those are financial things that need to be looked at. Really early on in the process. Please, please talk to me early. And I'll put you in touch with a qualified divorce lending professional, a certified divorce learning professional, who can help you navigate some of those questions as regards what you can potentially afford for the future? Or can you afford to buy your spouse out looking at your present financial position? In almost it most scenarios, one has to anticipate that if you are currently living in a home together, you're likely outlook for the future is going to be a smaller home, it makes logical sense because you have two incomes. And now you're only going to have one income. I personally went to a house half the size, less than half the size when I went through my divorce. And I don't want to discourage you. But I also want you to think about what you can truly afford and a lender professional can help you navigate that can help you look at the specific new income flows you may have with possible spousal or child support, factor those in and there's a seasoning period required for those. That's what I say talk to me early. There's there's I believe a six month period required, where you can show that that income is actually coming in to you. So yeah, another big thing to think about is if you are wanting to stay in the home, and very often that's a very emotionally charged decision and understand. But do be cognizant of the fact that if you're in a large home, you're moving to a single income, large home equals large expenses. And do you think about carrying all of that on your own a smaller home is likely to cost you less, and possibly set you up for more successful financial future?
Steve Altishin 22:23
Yeah. So I gets to sort of the the nuts and the bolts question. What do you say? And I know, every situation is different, but because eventually they're going to ask you this question, Should I sell the house?
Laura Rumford 22:37
Absolutely. And I cannot answer that question. But I can certainly give guidance and counsel based on my experience and my knowledge of real estate. But basically, you've got three options on the table. One is you keep the house, maybe you keep the mortgage, and you both stay on both. I don't think that's really viable in the long term. It might be a very short term solution. But I think you need to think beyond that. The second is, maybe to buy out your spouse, as we talked about an equity buyout, and again, talk with me, I'll put you in touch with a divorce lending professional, who can help you navigate your options in that regard. And perhaps that's a good solution for you. And the third option is possibly to consider listing and selling the house. And both of you making a completely fresh start, whether you are moving into rentals, or temporary accommodation or buying a new home and making a completely fresh start. The most important thing and the I think the title of this event was why the home and real estate shouldn't be an afterthought. And it's really important that even though you've got to navigate super important things like the children and spousal support, and, and all of that real estate is very likely your singular largest asset that you've accumulated, maybe retirement will trumpet but very often your singular largest asset, and so it's going to have a very big impact on your financial outlook and your financial future. So again, I can't overemphasize, talk to me early in the process, get me involved early, so I can help guide you through that.
Steve Altishin 24:08
But makes such sense. The need for a realtor who knows how divorces work? Seems like it is so important, especially if you are ordered to or agree to sell the house and then you both go your separate ways. Because the initial question that obviously I think is on people's mind, well, who's going to be our real estate agent? I mean, we can't have the same real estate agent we're gonna get divorce can wait. I think they may be kin.
Laura Rumford 24:43
Well, yeah, I would typically come on board in a few different ways. One is by mutual agreement of the spouses. The other would be maybe an attorney will refer me on to the case and sometimes I'll be court ordered as specifically as an expert on the case to list and sell the home It's important to understand that, whilst my background apart from being a financial background, my background as a principal broker and an accomplished realtor, real estate transactions where divorcing is involved are not the same as traditional real estate, I still practice traditional real estate as well. But these are situations where you have two parties that are potentially in litigation against each other, potentially, not even talking to each other. And there's a lot of potential animosity, it's not always the case. But you know, there can be conflict from year to year on the spectrum. And sometimes it can shift during the course of the of the transaction. So my job and my training have qualified me to really bring neutrality and a lack of bias to the table, no matter what the circumstances are, my job is to sit in the middle as a third party trusted neutral that both parties can communicate with, and not even have to talk to each other if they don't want to. And there's a couple of significant differences between traditional divorce real estate, like I said, animosity, potentially, you've got one spouse that really doesn't want to sell and is uncooperative throughout the process. And I've been court ordered, I have to follow the orders of the court to sell the house. Well, I've got tools in my toolbox to navigate that, potentially, there's only one spouse on title, but they both have a vested interest in the equity of the home. My job again, is to navigate that for the benefit the mutual benefit of both of those parties. And I have answers and solutions for those scenarios. We may also have one spouse who's trying their damnedest to sabotage the sale, they don't want to sell the house, they love the house, why should they move. And so I've, I've been trained to deal with those scenarios, I've been trained to recognize and understand pitfalls, potentially, during a divorce sale, and get ahead of the ball on those things. I'm also familiar with the divorce process. And so I know how and when to keep the attorneys or the mediators abreast of what is going on without over communicating. Because I know as much as we love our family law attorneys, that they don't come cheap, it's hard, it's not cheap. And if I'm over communicating with them that's costing you money. So keeping them abreast as they need to know, bringing them in if they need to be brought in giving them enough information to move forward with your case, but not involving them in the minutiae of of what's going on to keep your costs as low as possible.
Steve Altishin 27:27
And that's, you know, so important in what you know, because what happens a lot in divorce cases is that the sale gets delayed over and over and over again. And generally. The problem is that one person doesn't trust the realtor. And the other one does. And so it just goes round and round. And so being able to trust one realtor can make that house so much faster. Yeah, absolutely.
Laura Rumford 28:09
And that's my job from the outset. If one spouse contacts me, I let them know right away that I am neutral. And my first point of contact with the clients typically is a telephonic or Zoom intake call with those clients to ask them individually and singularly various different questions so that there's nothing hiding in the murkiness and nothing I'm not aware of, you know, in divorces, Sadie, there can be things like restraining orders that I need to be aware of as well. And an interest realtor might not be aware to even ask those questions. So you know, if there's a restraining order in place, I need to be certain that I am abiding by the requirements of that restraining order. And most importantly, again, I cannot over emphasize being neutral.
Steve Altishin 28:53
All those little things, the how can one of the spouses come to the house to help show that there go through straight from coming to the house, I mean, all those kinds of things. Wow. Unfortunately, we are out of time, we blew through 30 minutes, that was fast, was fast. And I really want to thank you for being here to talk about this subject of buying real estate, not as an afterthought, or thinking about it after the divorce has been decided and everything has been decided. But getting in on it early, so that you learn more, you know more and you can make better decisions even during your divorce. I just think that's a tremendous help for people. So thank you so much.
Laura Rumford 29:39
Thank you very much, Steve. I don't know if you want me to share any of my contact you do. Oh, I can possibly just give you a website as well as my phone number. If you can visit www.pd ex divorce. Our e.com PDX divorce realestate.com PDX Divorce our e.com and my number you can call me or text me 503-927-8770. I hope I'll be a good resource for you. And I hope that I've given you a few answers and not opened up too many new questions. But if they have, then call me and we can talk through that.
Steve Altishin 30:19
I love that all answers, create new questions. But then there are more answers, so I like that. So thank you for being here and everyone else, thank you for joining us today. So, if anyone has any questions about today's topic, you can also post it here and we can get you connected with Laura, or you can connect with her directly. Either case, you can get a hold of her. So everyone, until next time, stay safe, stay happy and be well.
Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.