The Four Ds of Selling Real Estate Regardless of Interest Rates

There's a lot of talk about people staying in their homes and no one wanting to sell because rates have gone up. No matter what some situations always prompt people to at least consider selling, and those are the way to a listing agent's heart. I'm going to uncover a little bit more about each of those reasons why these people typically decide to move and sell a home regardless of what interest rates are. And they all happen to start with the letter D.

The first D is diamonds, typically implying an engagement or marriage. According to NAR (National Association of Realtors) in 2021 single females made up 18% of home buyers and single males made up 9% of home buyers, which combines for 27% of all home buyers. 

I think many of us that have been single versus in a serious committed relationship can admit that our priorities change a little bit. Maybe as a single person, the extra room upstairs was less of a guest room and more like Carrie Bradshaw's dream closet from the Sex and The City movie, or maybe you didn't have a man cave but had an entire man house filled with beer signs, sports memorabilia, and kegerators.

Once we know that we need more than just extra drawer space and room on a bathroom counter, the thoughts about moving to a place that is more of a new home together can certainly be appealing especially as you factor in more than just your own commute time to work or proximity to more friends and family. The good thing about this is that it's a great time to also evaluate many other things in the relationship such as values, finances, and overall lifestyle ideas about how you plan to spend your days and nights. 

The second D is diapers, meaning there's a child on the way or maybe already here. Any parent knows that kids will change your whole world whether you'd like to admit it or not. Yes, you can still do hobbies and things but no matter what age they are they seem to take over your whole house no matter how much of a minimalist you might be. 

From an article in Parents, "Colleen Rustad loved her future home in Petaluma, California, at first sight, from the towering pine trees to the sleek kitchen cabinets. Then she and her family moved in. "As I was unpacking on moving day, I realized that the striking design features that caused my heart to skip a beat were going to be hugely impractical to live with," says Rustad. The lowest kitchen shelf was 6 feet off the ground, which meant she needed a stepladder to reach things and her 5-year-old couldn't retrieve his own plate. While the house's location at the top of a hill seemed appealing initially, it made teaching the kids to roller-skate a truly terrifying experience." 

If kids have you thinking that your current house is not a good fit, what questions should your realtor help you through?

  1. What is an ideal floor plan for your family?
  2. What do you want in a neighborhood or area?
  3. What type of yard do you want, if any?
  4. What are you looking for in a school district?
  5. How much time do we have?

The third D is Divorce. I think of divorce, as the D club none of us really wanted to be in, yet here we are, I know from firsthand experience. Everyone deals with divorce differently but no matter what it is stressful, scary, and alone. According to a June 2022 article from Homelight, "Divorce ranks as life’s second most stressful event, and decisions over what to do with the family home drive some of the most heated disputes between couples parting ways. Beyond the emotional ties to a particular home, sharing real estate comes with an intricate maze of legal strings that have to be sorted out before the dust can settle. It’s a bit more complicated than, say, splitting up the wedding china. However, with over 630,000 divorces recorded annually, you’re not the first to face the tricky divorce real estate questions keeping you up at night."

Homelight goes on to say that First and foremost, you need to know how the divorce home is valued, and how your equity in the home will be split.

According to Cornell Law School, the courts will divide your assets under one of two basic schemes: community property or equitable distribution.” Michigan is an equitable distribution state, which means the property acquired during the marriage will be divided fairly and equitably based on factors deemed by the courts looking at factors like how much each spouse earns currently, the earning potential of each spouse, and the value of a spouse staying home or raising the kids, to name just a few. According to Marco Brown from Brown Family Law: Utah Divorce Attorneys who’s helped nearly 4,000 divorcing couples, regardless of which type of state you are in, “The home being purchased during the marriage and doing a 50/50 split happens in 95% of cases.”

The fourth and last D in this series is death. The death of a loved one, friend, neighbor, or associate in most cases is never an easy time for those involved regardless if the death is expected or unexpected. As dismal as it may sound an expected death does offer more time to help set up assets to transfer more easily, while an unexpected death can cause a few more hurdles. 

A good estate attorney can typically help in both situations and I'm happy to refer any clients to one if needed. From a 2022 article from The Balance, "Estate planning can be a complicated process with numerous factors to be considered and decisions to be made. All of those factors boil down to one common denominator: how your property is titled. Understanding who owns what is the key to creating a good estate plan. Even the most sophisticated and well-thought-out plan will fail if you don't understand how your property is titled. It might pass directly to beneficiaries by operation of law, or it might require probate.

Property is titled according to one of three basic concepts: sole ownership, joint ownership, or title by contract. Assets can only be titled in one of these three ways, but each can include one or more variances. Like anything legal-related, the above outlines three ways, but here are two more ways that property can be held that are different than the three previously mentioned. Joint ownership without the right of survivorship is typically referred to as owning the property as "tenants in common." Two or more individuals own a specific percentage of the account or real estate, but not necessarily equal shares. One individual might own 80%, while a second individual owns 20%. Joint co-owners can pass their shares to beneficiaries under the terms of their wills or other estate plans in this type of deed. Probate would be necessary to transfer the asset. "Title by contract" refers to assets that bear a beneficiary designation that names an individual or individuals to receive them after the owner dies. This type of title includes bank accounts or investment accounts that have a "payable on death," "transfer on death," or "in trust for" beneficiary designation.

Just like divorce, a death requiring these types of decisions can be overwhelming and it is very important to make sure you have the proper resources to help such as an attorney, therapist, and realtor to help navigate all of the steps. 

Whatever you or someone you know might have for a reason to sell, I'm happy to talk through each scenario, refer to other professionals I know and trust and help accomplish your goals with your best interest at heart. 

Posted by Ariel Christy on
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