Michael Gaddis, J.D. of Michael Gaddis, J.D. Realty Group recently appeared on “The American Dream” hosted by Craig Sewing (COX & Time Warner Channel 4 Saturday Morning at 10am) to discuss selling homes for homeowners in the middle of divorce, probate and/or default. Michael Gaddis, J.D. is a unique real estate professional located in San Diego County (serving both San Diego and Orange Counties). Not only is Michael Gaddis, J.D. an accomplished real estate broker, he is also a licensed California attorney and NMLS licensed mortgage broker (CEO of Frontier Loan Group, Inc.). Michael Gaddis, J.D. brings a unique perspective when discussing issues related to real estate, especially, when more “involved” or complicated situations exist, such as divorce, probate and default.
On “The American Dream” Michael Gaddis discusses the psychological issues that are involved with selling property while in a divorce, probate or default. Typically, while the marketing and sale of real estate in these situations is the same as a traditional sale, the complexity of representing sellers in these situations due to ancillary issues can be challenging to the average real estate professional.
Representing sellers involved in a divorce can be tough. In addition to the normal real estate transaction there are extreme emotions and attorneys involved. Sometimes sellers cannot agree on anything. Obtaining an agreement from both sides can be challenging even for the simplest of issues. The key to representing sellers involved in a divorce is being “neutral”. A real estate professional must make it clear from the beginning that the real estate professional is there to help sell the property and nothing more. Sometimes sellers like to vent frustrations and are looking for support for their positions. Real estate professionals typically spend a lot of time communicating with sellers during the sales process. In situations of divorce, the real estate professionals time demands are doubled due to the fact that everything will need to be conveyed twice. Sometimes this time can be misconstrued by one or both sellers as establishing a bond above and beyond real estate representations. The sellers might feel comfortable talking about the legal aspects of their divorce with the real estate professional or speaking derogatorily about the other seller. Real estate professionals must stick to the middle ground and not start a precedent by listening to concerns not related to the real estate transaction. Additionally, there are times when real estate professionals will be discussing the real estate real estate transaction with the attorneys involved in the divorce proceedings. Having a real estate professional experienced with conversing and coordinating with attorneys can be extremely valuable.
Probate offers a different set of challenges than a divorce or default situation. Probate involves with death of a loved one. The representative of the beneficiaries is responsible for coordinating the sale of the property. However, probate can be much more involved than a divorce and/or default situation. Many times the real estate representative will need to provide support and guidance for getting the property ready to market. The property might be suffering from deferred maintenance which, if not properly addressed, will result in a lower purchase price. Real estate professionals handling probate sales might also have to assist or provide guidance to the beneficiaries representative on how to handle personal items remaining in the house (furniture, clothing, etc.). Another potential issue related to handling probate real estate transactions pertains to any existing loans on the property. Sometimes the loans will become delinquent so the real estate representative must be experienced in communicating with lenders as well as be familiar with laws related to foreclosure.
Sellers in default can also be challenging. These sellers might be suffering from severe emotional distress and facing imminent foreclosure. Real estate professionals assisting sellers in default need to fully understand the default process in California and be intimately aware of the importance of filings such as “Notice of Intent to Accelerate”, “Notice of Default” and “Notice of Trustee Sale”. Many of these default situations are Short Sales which means that the seller owes more than the property is worth. Short Sales are complex and can be very involved. Sellers should definitely seek out a real estate professional experienced in short sales.
While Michael Gaddis, J.D. did not have enough time during his segment on “The American Dream” to get into detail about any of these issues, Michael Gaddis, J.D. did convey that sellers seeking to retain a real estate professional to handle the sale of their property in any of these distress situations should be selective on who they choose to represent them.
Click on the video at the top of this article to see Michael Gaddis, J.D. on “The American Dream”.