In today’s episode, I have a candid discussion about real estate and divorce with two real estate experts from Fairway Residential. Bob and Bobby Flynn answer the burning question, Should I keep or sell the house? They provide key considerations divorcing couples need to think about regarding their joint real estate. They also share the common mistakes to avoid and give us tips on what to look for in an agent. Listen in to discover answers to your real estate questions.

For more information:

Robert & Bob Flynn

REALTORS® Fairway Residential

Robert: (858) 775-3079

roberthflynn@fairwayresidential.com

Bob: (619) 600-0999

bob@fairwayresidential.com

100 E San Marcos Blvd #400. San Marcos, CA 92069Robert & Bob Flynn

REALTORS® Fairway Residential
Robert: (858) 775-3079
roberthflynn@fairwayresidential.com
Bob: (619) 600-0999
bob@fairwayresidential.com
100 E San Marcos Blvd #400. San Marcos, CA 92069

India: Welcome to the divorce recovery podcast. My name is India Kern. My intention is to encourage and guide you through the valley of divorce. It doesn’t matter what stage you are in because we all need a little help navigating the road from married to divorced. I’ve been there and I know how it is so sit tight, listen up and enjoy the podcast. Today we will be discussing real estate and divorce. I have two expert guests, Bob Flynn and Bobby Flynn Jr. who are going to bring clarity around real estate issues that can be complicated during divorce. They are a father and son real estate team focused on helping divorcing couples make the best decisions regarding their joint property like the family home. Bobby has an MBA with a focus in real estate from Michigan, has bought, rehabbed and sold dozens of San Diego homes and has invested throughout the country in real estate for himself and investors. Bob Senior brings decades of experience as a lawyer and a mediator. They own and operate Fairway Residential in San Diego. So welcome Bob Senior and Bobby to the Divorce Recovery Podcast. Thank you for being here.

Bob Flynn: Thank you for having us.

India: So as you know, divorce is already incredibly difficult. And then to make the decision to keep or sell the house just piles on the stress to an already stressful situation. So let’s begin by unpacking what can be a complicated issue. So from your experience, what are the key considerations divorcing couples should think about regarding their joint real estate? With the overall question being, should I sell?

Bob Flynn: So probably these questions fall into should you sell and when and to get their there you have to kind of analyze it. There are reasons to keep it. Bob, what are they?

Bobby Flynn: Sure. So when I think about reasons to keep the home within the context of the divorce, I can break them into two different categories. And in fact, I can break down the reasons to sell your home into two categories as well. They’re really financial decisions or personal decisions. So a financial reason to keep your home might be, let me make up hypothetical circumstance. Let’s imagine you have a divorcing couple with four children and you live in Carlsbad and you may choose to keep your home within the context of the divorce because you want your children to stay in the same school system and you want to see them graduate, whatever the benchmark might be, elementary school, middle School, high school, that would be a shared educational goal that you and your divorcing spouse have. And under other circumstances, perhaps you could sell the home and move into a rental, but with a larger family in this example, it might be hard.

India: Right.

Bobby Flynn: Similarly, sometimes people, couples will decide to keep their home within the context of a divorce because there’s a social network there. They feel like they would lose if they lived in another neighborhood. So these are reasonable considerations. And I think the more a divorcing couple can focus on their shared goals that they had for their family when they were together, the easier it is to try to at least try to think about these issues in, in logical terms.

India: Right, right. Of course. Tell us some reasons. Like, so you talked about reasons to keep it. Now let’s talk about like reasons to sell it. Tell me some information about that.

Bob Flynn: So your reasons to sell are largely the same topics as the reasons to stay in the house. Um, with some additions. So again, financial and personal, uh, issues are, are implicated. It’s easy to stay in the house if there’s no financial worry. So couples that are flush with cash don’t have to worry about it and the decision to sell is really easy if people don’t have cash and they need the equity in the home to move on and divide and get going. Um, the reasons to sell the property. If one way of looking at it is your kids, you want them keep them in that school system and all that. At the same time you may want to move on. These are not real estate person questions. These are somebody else in the process.

India: Like starting fresh, right?

Bob Flynn: Starting fresh. I’m personally a big believer in cutting losses and starting fresh in everything. And in a sense of is true in the case of divorce. Um, but, um, so they may need the cash to divide the things people have to anticipate too are credit issues. So if one spouse stays in the home and the other spouses, um, in, in effect paying for part of it or involved in it or maintains an ownership, either spouse’s credit issues can affect the other spouse, um, in the home. So a judgment credit or could attach the property.

India: Like a lien? Can you unpack that a little bit because I don’t quite understand how that works.

Bob Flynn: So a, if there’s a civil litigation against anybody, it be would after a jury verdict or a trial with a judge result in a judgment and then a lien can be imposed. And attachment is another word for it. But you could have a mechanics lien with somebody doing work and there’s a dispute. So if the spouse who’s not in the house as a problem like that, but he’s on or she’s on the house title.

India: That’s a problem.

Bob Flynn: That’s a problem. Similarly, however, the, uh, credit activities of the spouse in the house can affect the credit of the other spouse. So these are the ties that tie people together perhaps unnecessarily.

India: Right.

Bobby Flynn: An IRS lien could come into the picture and an IRS lien is a classic. Sure. Um, maintaining the house is another big issue. Who …it can lead to disputes, it can lead to poor maintenance and, um, no, none of these things are critical, I mean in and of themselves. But there will have to be taken into consideration.

India: Of course, of course.So what about when to sell? Like in the divorce process, is there a, like when do you suggest selling the house if they decide to do that?

Bob Flynn: I know I’m a realtor, so, and I’m in the business of selling houses and Bob is too, but, uh, so, and I’ve already expressed my idea that things should be decisive, but when is, um, when you’ve made that determination really that you shouldn’t stay in the house, that it should be liquidated. It’s easy if you need the equity.

India: Sooner rather than later.

Bob Flynn: Sooner rather than later. Um, there is a tax consideration that, anybody involved in this should check with their own CPA about, but, uh, there’s a $500,000 exemption in effect from a taxable income for the gain on your home. Under certain circumstances, it can be lost, it can be lost to the spouse who moves out of the home to because of different rules. So it may be if there’s a, there’s enough equity really important to sell it during marriage rather than more than a couple of years after marriage.

India: Right. That’s what I was wondering. If you do it during that process before you’re legally divorced.

Bob Flynn: It’s much better to have $500,000 tax free.

Bobby Flynn: It really helps with a fresh start. Right.

Bob Flynn: It does help with a fresh chapter.

India: Yeah. Yeah. Yeah. So another question, does it make sense to hold it jointly with your ex?

Bob Flynn: That’s kind of, um, the same question. Um, I remember if some lawyer giving a lecture one time on different kinds of joint, uh, activities, joint trusts and stay out of expensive joints is, uh, what the theme of that was. So here, um, everything gets cleaned up if people can move on, selling the property sooner rather than later. It helps them move on. But they may need to stay there and they may need to keep a joint property for a while because of children or it could be a, Bob mentioned a, the situation where you want them in the neighborhood because of the kids and the schools. But you could have seniors who, um, one of them is handicapped in some way and needs that condo as fitted out. So, um, everything’s very dependent. Real estate agents can do three things to help, but all the big issues and are for other people, for the lawyers, the um, uh, financial advisors and things like that. What are the three things we can do Bob Jr.?

Bobby Flynn: Well, but before I get into that, I would just advocate, we feel like as realtors that specialize in divorces, we need to communicate not only with both spouses, sometimes individually, but with many of the people that are helping them make these decisions. So as early as possible, we try to be engaged in conversations with them, with CPAs, financial advisors, mortgage brokers to help parse these different issues that we’re breaking down.

India: Right. And it helps Bob Senior that you were a mediator and well, you still are a mediator and a lawyer. So you have that experience behind you. Does that come in handy?

Bob Flynn: It comes in very handy because it’s hard to believe you don’t think of lawyers as patient, but mediators are, mediators are very patient and so learned a tool. And we try to keep, both of us do try to keep everybody on track and we stay on our side of the field. We’re just doing one little job. This is a big situation for the couple in the family. And what we tried to do with the outset is provide a service that would include giving, the parties a really sound market analysis so they know what the property’s worth and uh, our view of where the market is and what the good get and a net sheet too which gives them after expenses what that equity would be, and then they take it to their lawyers and their financial advisors and make their own decisions.

India: Right, right. Can you tell us what are some mistakes to avoid?

Bobby Flynn: With respect to selling your home within the context of a divorce?

India: Yes.

Bobby Flynn: I can tell you this. We, we will sometimes list property for sellers where they want to hire, they’ve chosen to hire us even if we don’t have a personal relationship. Perhaps because we don’t have a personal relationship, there’s a shared understanding that our goal is to help both of them sell their house for as much money as possible. And we’re not the friend of one party versus the other. In terms of common mistakes. It’s really pivotal that a realtor established from the outset the best means to communicate with both parties because we’ve had clients going through a divorce where on a weekly basis we’ll get on a conference call with both of them and provide them with an update. But we have other clients where the divorce is perhaps so litigious and contested that we’re basically flipping a coin to decide who to call first with updates and questions as we work through negotiations.

India: And are they on the same page?

Bobby Flynn: Yeah, absolutely.

India: That’s got to be super tough.

Bobby Flynn: I think the third mistake is though there might be, um, a difficult situation in the background, making sure that we shield the public from what’s going on with our clients. We never want buyers, agents or buyers to have any sense at all that we’re nothing but a united front. So it’s our job to present that united front and to represent our clients is very strong sellers.

Bob Flynn: It’s amazing how often you can look in the MLS and see a listing that says, uh, getting divorced, a need to sell.

India: Oh, do they say that ?!

Bobby Flynn: Occasionally. Highly motivated,

Bob Flynn: Highly motivated,

India: Now would you recommend saying that?

Bobby Flynn: No, never, never, under no circumstances.

India: Why? Why?

Bob Flynn: Well, first of all, it’s the privacy of the individual. The whole point to, for example, mediating and resolving disputes outside of court too, which is a part of, sometimes the process is to maintain your privacy, your confidentiality, but it really impacts the price. So if the goal of the real estate agent is to achieve the best dollar result as realistically, quickly as possible, then to tell people that, uh, hey, they really have to sell. That’s like saying, oh, took a job in Nebraska, has to get there.

Bobby Flynn: Bring any offer.

Bob Flynn: So you want real estate agents who are comfortable with the entire process legally and also comfortable with the idea of confidentiality and privacy like Bob said. And um, otherwise it’s malpractice.

India: It is of course, that makes sense.

Bob Flynn: Sometimes you don’t have to put it in writing, but you know, a lot of real estate agents have open houses and properties. And so what’s going on here or the conversations, good buyers agents will call the seller’s agent and they’ll, they’ll push to find out what’s going on. And I’m telling you, it’s like talking to granite with us. You’ll never, well they moving on to where.

Bobby Flynn: It’s the right time in their life to sell.

Bob Flynn: They love the house. What do you think of the house change the question.

India: Right? So what can you leave the listeners with? A take-away?

Bobby Flynn: I think the biggest takeaway is if you’re interviewing a realtor, um, within the context of a divorce, you want to listen really carefully about how the realtor’s going to communicate with you and with your spouse and if that communication style is going to be customized to the circumstances of your divorce. I think perhaps what most realtors are not prepared for is that, the, the work involved in helping someone sell a home within the context of a divorce is really amplified because everything ends up, oftentimes, everything ends up getting negotiated out multiple times, not only with the buyer, but also between the spouses.

India: Right, right. Good point.

Bob Flynn: Right. They can agree at some point. Sometimes we were brought in so early that they haven’t agreed to sell the house because there’s other things going on. Like it could be with your children to it, but at some point when they agree to sell the house, nothing should be done that would negatively impact their common goal and as at least as they expressed it. But it happens. So you have to keep going back and forth.

India: You have to have patience.

Bob Flynn: Patience, that’s it. That is it.

India: Oh, well I want to thank you so much for being on the podcast. I also want the listeners to know how to get in touch with you, so please share that information.

Bob Flynn: So our website is www.fairwayresidential.com and you can always reach, uh, either one of us at bob@fairwayresidential.com, uh, in the direct phone is 858-775-3079. And thank you very much for doing the work you’re doing for people facing this situation.

India: Of course, well, again, thank you and I’m, I know this can be difficult for everyone involved, so it seems to like you are both doing a great job at mediating and getting this real estate, this very complicated situation, you are somewhat bringing some clarity and simplifying it. So again, thank you so much and listeners, thank you for tuning in and all their information will be on my webpage and on the podcast page. So if you didn’t get it now, just look there and you’ll find all their information. So thanks for listening and have a beautiful day.