Selling a house after divorce agreement – Sell Louisville house fast

Selling a house after divorce agreement – Sell Louisville house fast – Simply Sold

 

Hey guys. Thanks for joining me today on this episode of the simply sold podcast today. I have a special guest. His name is Clark Baird and Clark is an attorney who has several years of experience in family law and has been a solo practitioner for a long time. He’s a great guy has a lot of experience in this field and I just thought it would be a really good opportunity to talk today, and we’re going to be talking about the topic of divorce and real estate. So, I hope you found this episode helpful, and here’s my conversation with Clark.

Hey Clark, how you doing? Man, I’m good. How are you doing today? Doing great, man. Well, may I want you to go ahead and tell us a little bit about yourself? Tell us about your background and kind of what’s what brought you here today? First of all, I want to thank you for inviting me out. So, I am a lawyer licensed here in the state of Kentucky.

I’ve been practicing law now for 11 years. I’m a solo practitioner, which means I have my own practice. Awesome.  We have an office here in Louisville, Kentucky. So, when I first started practicing I did predominately almost all family law in which I still do now, but also over the years have developed other areas my practice that we do.

Criminal defense and also civil litigation and I enjoy it. That’s awesome. Yeah, very cool, you know, so, you know today we have the topic of divorce, you know, and in real estate, you know, a lot of times we come across this, you know, we’re buying a house, or we are selling a house many times.

We’ve done lots of transactions over the past couple years and bought lots and lots of houses and we keep coming across people and who are in either in a divorce that come out of a divorce or they’re about to go into a divorce. And so, a lot of you ladies have a lot of questions regarding, you know, what happens to my house or what should I do?

And I had a thought, you know, what better idea would it be than just to bring an attorney on here and talk about you know, what people can do, you know to either salvage their relationships or their home and stuff like that. So, Let’s talk about just like divorce and real estate 101. I know this is not a fun topic.

It can get really messy but let’s try to help people out and maybe ease some of their pain and what they can do for their families in this situation and see what we can do. Sure. Absolutely and yeah real estate is a pretty big issue that we come across in divorces. The reason why is, that in Kentucky, a married couple, both parties have a marital interest in a house, whether it’s the house that they reside in or it’s a rental property.

They might own some sort of commercial property both people in a marriage have a marital interest in the property and that applies even if the property was purchased before the party’s got married. So, let’s suppose that the wife owns a house and then gets married and then husband and wife live in the house for 20 years.

The husband still has a marital interest in that house. Now, you know, we don’t have to get into the specific particulars of what the law is, but you know the things about like. If mortgage payments are paid during the course of the marriage or if improvements are made during the course of the marriage on a house that was purchased premaritally then there’s a marital value that’s accrued in that house.

Is there like a time limit? Let’s just say hypothetically that you get married and six months later you divorced. Is there a limit there or is it like boom once you’re married? Boom, once you’re married because for instance let’s suppose that you’ve been married a month and your husband dies.

Then the wife has a dowry which called a dowry interest in the property. So, there is by law certain interest that arise as soon as the parties get married. It’s really, I mean now. On a short-term marriage, the marital interest might not accrue to any amount of significance, right? But let’s suppose you get married and the husband or the wife gets $100,000 bonus at work or wins $100,000 in the lottery and then they pay off their mortgage. Well, even though they’ve been married a month. Now, you know that house has a huge amount of marital interest in it.

Yeah, the portion that’s not marital is whatever portion. Is paid prior to the marriage? Okay. Yeah, that makes sense it. Is it similar to this is we don’t want to go down this hole but is it similar to other states? Many states have this kind of a marital interest, as some people may not be listening exactly in Kentucky.

Right? So, a lot of states do, every state has to address this issue, in California is called a community property state. So not every state does and that’s why you know, I had today had a person asking me about the laws in Ohio and I’m like, you know, I’m not licensed in Ohio. So, I don’t really know the specifics.

Some of the laws are in general very similar, but you know, that’s why you should always. Talk to you know, a licensed attorney in your area for specific questions about what the law is and how it might affect your situation but in every single state when people get married there’s a marital interest in that property even if they’ve only been married for a short period of time.

So, let’s say that somebody you brought this up, you know, they’ve been married 20 years or ten-fifteen years. However long they’ve been married and they. They decide that it’s best for them to get divorced and they own a property, you know, so what are some of their options within that property?

What can they do? If they let’s say that they can. Come together and make a decision about their real estate. What are some of their options? You know, obviously you have a realtor, you know realtor involved with obviously, you know, that someone has to be timely, you know, I can be very time consuming to sell with the realtor.

Sure. Yeah, so well, okay. Well, first of all, there’s not always realtor involved for instance. One of the big issues the kind of the preliminary issues is, is the house paid off? Or is there still a mortgage, you know a debt on the property because for instance if a house is paid off then the wife could say you know what I’m moving out.

I don’t want the house you can keep it and then simply quit claim. The property to the husband. Okay, and that’s just basically saying hey, I’m going to give you my interests. It’s a legal way that a person conveys all their interest in that property to the other person. Okay. So then at that point that other person is the sole owner and has all the legal interest in the property and the other doesn’t and that’s if somebody just says hey, I’m done.

I want to walk away, right, in any even if there is a mortgage out on a property a person can convey, quit claim their interest in the property but there’s still the debt. So, you know, as you know, as a real estate investor, you know, the house there’s the house and the legal interest and then there’s the debt so there’s the note.

Yeah. So, for instance, one party can be on the Note but not the other party, right? So, let’s say husband and wife can both be on the deed of the house, but let’s say only the wife is on the Note, right? So, they’re so it’s their different issues. So, a husband can quit claim their interest in the house.

But if let’s say both parties are on the note you can’t get yourself off the note by quit claiming away your interest. Yeah, you’re still there that our said that does not go away. That is what does not go away. So, I’ll tell you a common problem that we run into when selling a house during a divorce is the debt right?

It’s a lot easier if the properties paid off. Oh, yeah one party can give the other party the property or they can just sell it and split the profit and that part is very inexpensive. It’s very easy, very inexpensive, you know talking about a hundred two hundred dollars.

Yeah, really simple through an attorney is really the quit claim process. quit claim deed. Yeah. I mean like a small filing fee because it needs to be filed in the county clerk’s office in any state where you whatever County you live in and then, you know pay lawyer a hundred fifty bucks to draft it and then that’s it.

So that’s probably the very easiest way to deal with just giving your interest to another person when you want to sell your house in a divorce. That’s step number one and that can be done with or without a financial, you know repayment like, for instance, I can in a divorce, you know, I can say okay. I’m going to give you $50,000 you waive your you quit claim your interest in the house to me.

I keep the house. You keep the money and we go about our separate ways. Yep. So that’s really the easiest scenario when selling a house during a divorce, but when you have a debt on the house then it complicates things because you got the bank absolutely because you have to be able to satisfy the bank and the payments and so let’s go there.

So, let’s say we have a scenario where you have a single income family, you know, you have a single head of household and they earn the most money in the home and that person decides to leave. They don’t want any interest in the home and then the other party loves the house, or they can’t afford to stay there and then you’re now you’ve fallen back in payments.

We see this a lot. This is a very common or both parties are working. It doesn’t really matter the financial part there, but you get people who walk away now that people can’t afford the house. However, that plays out and their life, you know, what happens then with somebody who can’t afford those payments in their starting to get behind what could they do then?

Right, so first of all, in a divorce it is statistically proven that divorce leads to a reduction in the standard of living of both parties because whereas once you have a single-family household, whether you have one income earner or two, the thing is you have one set of bills.

So, the fact that you have one set of bills and then you separate and now you have two sets of bills for two households. So, the ink so the standard living always goes down no matter what but we this is a very common situation that we run into when selling a house in a divorce and it can be a major obstacle or problem in divorce in general.

So, and there are different ways it can be solved, but let’s suppose that you have the main income earner move out and they don’t care about keeping the house and you have the say the stay-at-home parent who wants to keep the house, but they don’t have the finances. So, there are different options right one option which I’ve seen done and I’ve had a client do as he moved out.

He made all the money and he quit claimed his interest in the house to his wife and she didn’t work, and he kept his name on the debt and he just paid it right which now that was against my legal advice. Because the problem is, is that I think if you’re a credit agency or a bank and you’re looking at this man and looking at his finances in terms of what his credit is and are you going to loan him money or not?

What they see as they see a large debt owed with no income coming in. Well, what he should have done is what’s called “a wrap”… a wraparound mortgage.

Now, I’m not a realtor. I’m just investor in this is kind of like what he should have done to protect his own interests in the property is called create a wraparound mortgage where he still has a mortgage interest in the property. This is what you should do always consult your attorney. I’m not an attorney but this is what I think should have been done to protect himself as to create a wraparound mortgage basically meaning that.

He has a mortgage interest in the property himself. It’s the same value as the other mortgage. So there’s basically two mortgages on the property. But that way if something crazy happens, he still has interest it’s a mortgage interest in the property. So consult an attorney on that, but more than likely that’s probably what he should have done if he’s going to that way if something crazy happens he at least gets the house back right even in your correct, or he could have simply you know, I guess forced her to refinance or sell the house because what if what could have happened?

Is that what if she just. What if he wants to go get a new mortgage somewhere else and there’s no this lady could have paid him rent or something like that and look like he has income coming in that way. It kind of zero balances out for him. Debt-to-income issues could come in, right

Basically, the way he structured it or again, which I told him not to do was to me it looks like you just have a giant credit card debt. When you have credit card debt you don’t have an asset to show for it. So, to get rid of it you have to file bankruptcy, right and so he didn’t have a deed or have any interest in the house. He just had this huge debt.

So, like you said a wraparound mortgage would be one way to deal with it. Another way, oftentimes when we come in this situation is the party just simply has to sell. Because there’s sometimes where neither party sit by themselves individually can afford to keep the house and so in those situations, you know, you bring in a realtor or you can have an investor come in and purchase the house when you sell a house in a divorce.

There are advantages actually to having an investor like yourself come in when you want to sell your house in a divorce because oftentimes parties, when they’re in the divorce, they want to get divorced and they want to get it over with and they want to separate. Oftentimes they can’t agree on a realtor, they have a hard time agreeing on the sales price, you know who gets the even splitting 50/50 becomes a real problem sometimes for people.

So, if you can get an investor to come in and throw cash on the table and get it done right now then not only does it expedite the divorce, but it also gives those people quick cash that they can use to restart their life. So, there’s plenty of people when selling a house in divorce will use a realtor but there are definite advantages to using someone like yourself in the situation.

I’ve seen so many situations where people just want to walk away. They can’t afford their payments and they just want someone to either take over their payments even to where it works out well for all parties and they don’t, number one they don’t ruin their credit by walking away and just losing the home.

I mean how many times have you seen that happen… A lot. I’ve seen it a lot. I’ve seen bankruptcies and things like that in divorce, and people just choose to walk away from the house when they don’t really have to do that. There are a lot of great solutions for people. You know, that that’s one of the biggest things in this industry like the real estate industry is like there are options.

You don’t have to, if you can come together and kind of mediate these things and go to mediation or talk to an attorney or find an investor to either purchase your property and figure out how to work well together, you know, that that’s probably the best solution is not just walk away and everybody loses.

You know, that’s not good. Right? Well, it’s so unfortunate, we find so often that people live beyond their financial means and so they’re already in foreclosure by the time they actually get into the divorce. So, you know financial problems can in fact oftentimes be a driving factor in a divorce.

 

Let’s talk about that. They’re in foreclosure there in that scenario right now. They’re sitting here listening to this and they are in foreclosure. They’ve missed a year of payments, you know, I can say this because we just bought a house this way.

Somebody was behind for a whole year. There are 12 months behind in their payments and they had been divorced and you know, they had been all of these things and they just wanted to walk away from this property. So, the most recent purchase I made of a property was this scenario and this person basically had kind of said they had thrown their hands up in the air and said, hey, I’m done.

I’m done. I’m going to let the bank have it back. You know, we stepped in they contacted us, and we were able to buy this property save them a form of foreclosure. Get this home paid off and they were able to walk away with a substantial five-figure check, which was amazing considering that a little bit prior.

They had, you know settled for nothing, you know, and I would say that this is a pretty common thing is that people who they’re back in their payments, you know, you don’t have to just lose, you can salvage and start over there can be a fresh start.

Like the solution that you offered your seller Beau, is that his credit I mean, so when that house is paid off, you know that is a huge credit advantage. That’s really can increase your personal credit rating which again in a divorce are in these situations. The people need credit, everybody needs good credit.

You’re going to start over at some point. You know, it may not be right now at this moment, you know, you may be listening to this and say hey, my life is over. I’m you’re going through the worst time in your life. You know, you know, I get it. I understand. Yes, that you may be going through hell right now, but there is going to be light at the end of the tunnel.

You’re going to make it out. You’re going to be okay and you’re going to need to say hey I need help right now. I would say to you right now wherever you’re listening to this at that there is hope and that you don’t have to give up and that you should fight for or let someone come in and fight for you.

There is hope and you don’t want to just destroy your credit just because you’re upset somebody else, right? And you know, I fight for my clients and often times my clients are at this emotional point and divorces difficult time. So very difficult life situation, so I have clients and because they’re just kind of crushed, you know, their spirit is crushed. They are just ready to wave the white flag and surrender and give up and I’m like, no, you know, look you feel this way right now, but in two years you won’t feel this way and so you need to try to really maximize your position right now when selling your house in divorce.

You don’t need to just give your real estate away, you know to the other person you need to obtain the financial advantage out of the situation not take advantage of the other person but get what’s fair and equal for you. Often times you will have both parties stay on, you know, the mortgage and the deed and one in the one party will live in the house and that is, for me as a divorce lawyer in Louisville the worst situation because divorce is technically is called dissolution, right you’re dissolving the legal bonds of the marriage, right?

Not just emotional, but the legal and so my thing is is that I want my clients to have that separation. Any ties that remain between the two parties are potential areas of conflict and so to minimize future conflict you want to sever as many of those times as possible now, obviously when you have kids you can’t do that, right?

You want to try to resolve it to because if you don’t do what you’re saying right now Clark, eventually 10 years from now, 15 years from now, you will have to contact that other person because they will have to sign off on the sale of that house. That’s right. no question about it. It’s going to have to happen.

I will tell you something funny and this is going to sound bad because I’m a lawyer. So, you know, I myself went through a divorce and so I when I’m sharing here today with your audience is not just professional but it’s also from personal experience and the lawyers that represented my ex-wife and I were supposed to draft a quit claim deed because my wife, my ex-wife was going to quit claim her interest in the in our house to me and I was buying her out. Okay, so I made the mistake of assuming that was properly done and then years later when I was doing a transaction and I needed to do some things with my house lo and behold my ex-wife’s name is still on the house.

And this was four years after the marriage. So, you know, luckily her and I have a good relationship and she signed the paperwork the quitclaim deed and it was not a problem. But again, you know those type things happened, there are situations where husband and wife will separate and maybe even get divorced but for whatever reason either their lawyers don’t do it or they just simply won’t do it, and then like 10 years later, you know, wife dies and husband’s name is still on the house and he gets the house even though they’ve been separated for 10 years.

So you want a clean break, right, I mean especially in all legal and financial situations you want that clean break. It gives a person the chance to start over and it eliminates potential problem areas for the future. Yeah, and I would say when you’re talking to investor companies, you know when you’re ready when you are vetting people who can purchase your house. Number one, make sure that they have the financial means to do so and do so fast. That’s number one. Make sure that they’re a professional, reputable company that uses attorneys because man, you don’t want to do a like a backroom deal. So to speak and like have people sign it’s not over your home or you want to make sure that it’s done right.

So that way you can walk away, you know if you’re trying to dissolve this marriage and sell a house in a divorce, or and walk away peacefully as you can make sure it’s done at an attorney’s office and or a reputable title company. And now that’s something I would definitely recommend making sure the people who are purchasing your house have the means to do so.

You know, it’s something really really important when you’re trying to sell your house. You know, it brings up another question for me is you know, as we’re wrapping this up, you know, you have people who are at the beginning, they’re about to get divorced or they’re in the process of separating.

They found this episode somehow and they found this in they’re thinking about selling their home. They want to sell their home. They need to sell their home. They have to sell their home. What steps do you think that someone needs to take… both people understand that they need to sell the house.

What’s the first thing that they should do… what’s step one? I think they should approach an investor like yourself. The reason why is because when parties are considering divorcing and they’re in that situation oftentimes and have a difficult time communicating with each other. They have a difficult time agreeing on things. The one thing that the parties are going to have to agree on if they’re going to move the real estate is the price. Get an investor in right away because then you don’t have to argue about who to go with. When a professional home buyer like Simply Sold comes in and tells you what the potential value of your house is, then it’s hard to argue about that when you have a neutral third party come in and provide good data for both parties to look at.

Many people have no idea what they owe, you know, you need to know if there are liens on your house…and a good investor can tell you that too A good investor will know that right away, but you also want to know that as the potential seller. You need to know what your position is before you even start talking to a realtor or investor.

You need to know, what is the value of the house? What do we owe on the house? Are there any other debts besides the mortgage on the house? Now, is the house in foreclosure, if so, you know, what are we going to do? Is it in litigation? If somebody doesn’t know if their houses in foreclosure, how would someone know if their houses in foreclosure? What do you think? Someone should know? Well, they should know because if their house in foreclosure, then there’s been legal notice provided by the bank and there is a legal action against the property and against the owner.

So you should have been served with the complaint. You should have been served with some sort of legal documentation and when I say served, In most states, there are certain legally required forms of service. So it can either be in person or by certified mail or it can even have a bailiff or some law enforcement agency serve you with the paperwork, but there should be something like that. So there’s really no excuse for a person to not know that their own property is in foreclosure.

So to wrap it up and saying this is that. So one of the things that we can offer as an investment firm is that no matter what scenario you are in if you have a home that is it needs massive repairs, you know, you need a lot of repairs. You got a house full of stuff or you know that there are lots of scenarios that someone could be and maybe the house is in not a great area, or maybe it’s a fantastic area and it’s a very expensive home and it’s a lot to deal with.

You know something that we can do we have the means and the funds to do that. We do this all the time. This is our full-time job, as you know, and we have those means to do that and so don’t hesitate if you’re listening to this podcast right now to reach out to us. One thing I will say to if you’re listening to us right now is that you know, don’t hesitate just to get an opinion we’ll definitely give you an opinion on what you should do.

You know, if you’re listening to this, you’re about to go through a divorce or going through a divorce, or you’re thinking of selling your house in a divorce, maybe we meet and our company Simply Sold is not the right choice for you, but what I will always tell you is that we will definitely point you in the right direction. Maybe it’s best that you choose a realtor, but maybe as you just want to walk away and you need someone to buy your house as is today and you need to walk away in three days. We can make that happen. And that’s something you know, so Clark, you know, how can someone contact you if they’re in this the Ohio Valley area as we call it around here, you know, how can people communicate with you? Maybe they have a legal problem that they need to talk to you about or divorce, family issues, or even selling a house during a divorce. How can people contact you?

Well, you can always call my office. We have a full-time office staff. We answer the phone 24/7. Sometimes it goes to voicemail on occasion. But we check our voicemails day round Night round. So anytime you can call the office, our phone number is 502-583-3388.

And also, of course, email do check my email. Unfortunately 24/7 my wife will complain about that. And so you can always email me. My email address is Clark@JClarkBaird.com, I’m always happy to try to answer a question. you can also visit my website at www.JClarkBaird.com

Selling a house during a divorce - Clark Baird

For someone on a legal issue if I don’t know the answer the same thing. If I don’t know the answer, I will try to point you in the right direction or to the right person who can help you, but you know, there’s no stupid question obviously and the best thing is to always consult a professional. Seek out the help like you said, Beau.

Don’t just surrender walk away because it’s actually you’re not solving whatever your problems are. You’re actually making them worse and there are professionals. Like lawyers or like investors who can actually help you even in these most difficult life situations. Absolutely, man, you know that I want our listeners to know that you know, there is hope now there’s definitely help in the situation that you’re in. I don’t care if you’ve got a house destroyed by kids or people have a robbed you.

I mean, there’s probably not a situation that I haven’t seen. In all the transactions that we’ve done and just know that there is hope, there is something that if you’re listening to this right now that there are great attorneys out there that will guide you in the right place. They will guide you to make the right decision and that you can consult a professional home buying company like ourselves and we would love to serve you at this time. If you’re going through a divorce, and youve thought about selling a house during a divorce, or you’re about to, you’ve come to the right place.

There’s no shame in calling and talking to one of us. Lots of people go through it and we want to be here at the closing table with you.

simply sold lousiville - Selling a house during a divorce

– Beau

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