Marysville and Columbus Real Estate and Community News

Nov. 14, 2022

Hope Is Not A Strategy

Sign that says property value with a house and coins

Property Value Status 

 

Property values are in a state of correction. The Fed Chair Jerome Powell has not minced words when relaying the Federal Reserve’s intentions to basically give a 10-20% haircut on property values via interest rate hikes (that show no signs of stopping). 

 

It needs to happen. The market could never sustain spikes in values going on forever — it’s unhealthy. 

 

And none of that feels good or fair to a divorcing homeowner who can’t qualify for a buy-out because rates are so high, and they’re left with no other option but to sell. After all, where will they go? Rents are sky-high and interest rates make purchasing another house an impossibility for most. 

 

I wish I had a silver bullet solution. Unfortunately, I don’t. The reality is that the best that we, as hired professionals, can do is to be as informed as possible and advise our clients on how to mitigate the damage. 

 

What we do know is the house holds much of a family’s fortune, and tens of thousands of dollars can evaporate with a misstep. In a divorce, the resistance of one party to sell can have a big impact on its desirability, and therefore, its value. Tackling this market requires a strategic approach. I’m afraid that those who choose to deny the facts and hope things will get better soon will look back and wish they’d acted sooner.

 

5 Tips To reduce Loss of Home Equity

 

Here are five tips that will reduce the amount of equity lost during this market downturn:

  1. List Sooner Rather than Later: The wheels of justice turn very slowly, and many cases are rife with delay tactics to list. In a market like this, time is money. This is the time to cut losses and get the house on the market before there are further rate hikes and we slip into a recession. 

  2. Be Realistic on Price: In a divorce, both parties have to agree on a list price (absent the Court making an order) which can be a struggle. In a changing market, price reductions are often necessary, which reopens the tense pricing conversations and requires possible hearings if they cannot agree. While the conflict is going on, the value continues to drop. Listings should be priced 2-3% below the lowest active comps in a declining market. The sooner that happens, the sooner the tourniquet can stop the bleeding. 

  3. Mind the Condition: When an in-spouse doesn’t want to sell, they are often not motivated to keep the house in “model-perfect” condition. Everything from smoking weed in the house and keeping it an unkempt mess, to having the other party’s belongings piled in the driveway getting rained on, “compromised condition” is a common occurrence in a divorce listing. These things only add to the deterioration of value. We need to be very clear about expectations of the property condition, because nowadays, buyers have a lot of options and usually buy what “feels” good. Properties that don’t feel good get low-ball offers.

  4. Cooperate with Showings: Every single showing in today’s market is like a coveted treasure. In divorce listings, requests to show are often ignored or declined. This simply cannot happen. Our standard is 90% of all showing requests are to be approved within an hour of receiving the request. If showings are routinely declined, the listing should be placed on hold until the issue is rectified. Otherwise, days on market rack up and the house becomes stigmatized among the Realtor community.

  5. Offer a Rate Buy-Down: These have made a comeback. A buyer who is quoted a 7% interest rate can benefit from a seller contributing funds to buy it down to 4 or 5% through different loan programs that some (not all) lenders offer. Sometimes these buy-downs only last a few years, but it can mean that a buyer can afford to pay more for the house to arrive at the payment they can afford. So if your client comes to you upset, and says, “My Realtor wants me to pay for the buyer’s interest rate,” know that this can be a very savvy negotiation tool, designed to ultimately save the clients money by preserving some of their equity. 

 

Posted in Divorce Help
Oct. 13, 2022

Living in Plain City Ohio

A sign stating the village of plain city ohio

Getting to Know Plain City, Ohio

Situated along Big Darby Creek, Plain City is somewhat unique because it's located in two counties. It's also a village, not a city as its name would imply. Residents enjoy Plain City's small-town feel and proximity to Dublin, Hilliard and Columbus, all of which offer a wide variety of employment opportunities, indoor amenities and recreational spaces. Read on to find out what makes Plain City so special.

History of Plain City

Native Americans lived in the area for hundreds of years before being driven away by white settlers during the War of 1812. Although Native Americans left during the war, it wasn't until 1818 that Isaac Bigelow decided to establish a new town at the site. Initially, the site was called Village of Westminster, but as it grew, the name was changed to Pleasant Valley.

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Posted in Community Pages
Oct. 11, 2022

Divorce - Impact of Child and Spousal Support on Loan Approvals

Gavel with divorce written on the image

What is the Impact of Child and Spousal Support on Loan Approvals

When you combine Divorce with Mortgage qualifying, the challenges for a successful outcome increase dramatically. Factor in external economic changes like fluctuating interest rates and housing values, and the complexities intensify.

So what is the impact of child and/or spousal support on residential mortgage loan qualifying?

Let's begin with the basics...regardless of divorce, mortgage approval guidelines (at least partially) center around the proposed new cash-flow for the Borrower(s) who is (are) applying for the new mortgage loan. We use a term called Debt-to-Income (DTI) ratio to measure this angle of scrutiny.

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Posted in Divorce Help
Sept. 21, 2022

Divorce's Impact On Property Condition and Values

image of a house with a crack and a band-aidDivorce's Impact On Property Condition and Values

Parties going through a divorce are often in survival mode-financially, emotionally and mentally. For those of us who work in the field of divorce real estate, we are often balancing client bandwidth with maximizing their property's financial potential.

Several things play into this, including the level of conflict, any pressing timing issues, such as delinquent mortgage payments or any impending moves (job transfers, change in school districts, custody arrangements) and then of course-the order. While it can be tempting to furiously rush to agreement in the halls of the courthouse or request the court make an order that the property listed "forthwith, as is," there can be a pretty substantial price tag to these decisions. 

While no one wants to unnecessarily allow the listing to languish, there is usually a financial benefit to taking a few weeks and using that time to get the house from "lived-in" condition to "market-ready" without breaking the bank.

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Posted in Divorce Help
Sept. 6, 2022

The Matt Araiza News on Assault and Its Affect on Joint Property Ownership Post Divorce

united states supreme court building

Rape, Allegations, Landlords, Liability and Joint Title Post-Divorce Potential Pitfalls

Have you ever had a case where the parties deferred the sale of the real property, or they remained on title together after the divorce was over?

If you’ve been following the former Buffalo Bills punter, Matt Araiza’s, gang rape case, there’s a big lesson hidden within it. 

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Posted in Divorce Help
Sept. 1, 2022

What you need to know about divorce equity buyouts Part 4 (Preparing to move when you have sold your equity)

man standing on coins

What you need to know about divorce equity buyouts Part 4 (Preparing to move when you have sold your equity)

You have given up your equity and there’s nowhere to go… YET !

No doubt, buying a house is usually easier than selling a house. It is common to have a strong emotional attachment to your home, especially if you've lived there for a long time and have created memories. There is no one-size-fits-all solution, but there are some steps you can take to find adequate housing in your fresh start.

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Posted in Divorce Help
Aug. 26, 2022

What you need to know about divorce equity buy-outs: Qualifying to keep the house (Part 3 of 4)

man standing on a stack of coins

Divorce and Mortgage Financing for Your Current Home

Divorce and mortgage financing issues are commonly controversial in divorce cases, especially when one spouse is reliant on divorce income for mortgage qualification purposes. It is critical to determine whether the spouse wanting to buy out the other qualifies.

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Posted in Divorce Help
Aug. 18, 2022

What you need to know about divorce equity buyouts - The basics (Part 2 of 4)

man and woman standing on money

What you need to know about divorce equity buyouts - The basics (Part 2 of 4)

An equity buy-out is a process of acquiring the equity ownership of an existing legal owner of real property. If the other spouse agrees to it, they must give up ownership of the home in exchange for the money.

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Posted in Divorce Help
Aug. 17, 2022

Why the Forbearance Program Changed the Housing Market

Why the Forbearance Program Changed the Housing Market | MyKCM

When the pandemic hit in 2020, many experts thought the housing market would crash. They feared job loss and economic uncertainty would lead to a wave of foreclosures similar to when the housing bubble burst over a decade ago. Thankfully, the forbearance program changed that. It provided much-needed relief for homeowners so a foreclosure crisis wouldn’t happen again. Here’s why forbearance worked.

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Posted in Market Updates
Aug. 11, 2022

What you need to know about divorce equity buyouts - The basics (Part 1 of 4)

a man standing on coins with a womanOne of the numerous deliberations that divorcing spouses have includes whether to keep the house or to sell it?  At this point there are a few things one needs to understand before considering buying out a spouse. Let us begin with the fundamentals.

What is equity and what is divorce equity buyout?

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Posted in Divorce Help