The 3D's

Hank plays golf in an after-work league with a Today Real Estate colleague. When they retired to the 19th hole for refreshments last week, talk naturally turned to the current real estate market.

Our colleague suggested that the market is currently stuck in the 3D’s: death, divorce, and debt.

Death

As Cape Cod realtors, we can be all too familiar with this aspect of our business. It’s common to receive a call from family looking for help in marketing Mom and Dad’s home after they both have passed or the remaining partner has moved to a more appropriate living situation.

Some families find the decision to sell easy. Others wrestle with the issue for months. Even years. Too many memories. An often well-meaning notion that the family will keep using the home as a vacation get away. But, in the end, most decide to market the house.

In the meantime, the property remains outdated. It may have been well maintained, but the gold carpets, flowered wallpaper, and olive green appliances can be a drawback when selling. If the family is large enough, there’s also a good chance that an out-of-state sibling will have an over-inflated view of its value.

Our advice? Whether the decision is to sell immediately or wait, it’s best to get an unemotional assessment about the property’s worth from a real estate professional as soon as respectfully possible.

Divorce

The divorce rate in Massachusetts is one per every 1,000 inhabitants. With a year round population of about 220,000, the Cape certainly has its share of marriages breaking up. (Not including the people who have second homes here.)

There are several options when dealing with real estate when a couple is divorcing. These include:

Agree to sell the home on the open market and divide up the proceeds;

One spouse buys out the other, thereby owning the property outright;

Maintain mutual ownership and turn it into a rental property;

In the case of a second home, agree upon a schedule for both spouses to use it.

The first two options depend on both parties agreeing on the property’s value. So, the earlier a real estate professional is involved in the process and a list price agreed upon, the easier it could be for all.

Keep in mind that attorneys can function as real estate agents. If yours offer to sell your home or says they know someone who can, interview them as if you were deciding on an agent. Ask them about how many homes they’ve sold. What’s their marketing plan? Are they available for showings? You want to be sure to get top dollar for your property.

Debt

Given the amount of equity most homeowners currently have, using it as a way to get out of the red and into the black can be an option.

But, according to the financial media website Invesotpedia, there are pros and cons.

On the plus side, interest rates for home equity loans can be significantly lower than rates on many other types of debt. If you are able to afford only a fixed amount every month, taking out a home equity loan to pay down your balances can help you settle debt more quickly.

But, if you can’t make payments on your equity loan, you could lose your home in foreclosure. Of, if for some reason your home’s value decreases below the balance on your home equity loan and mortgage, you may be unable to sell your home or move. 

Selling your home, paying off the debt with the proceeds, and moving to a more affordable situation could be the best move to get you back on your feet. While realtors can help market your home to be sure you get top dollar, you should seek advice from a financial professional on what’s the best decision is for you.

No matter what course of action you take, it’s imperative to address the reasons that got you into difficulty in the first place.

If you find yourself in one of the 3D’s, we’d be happy to provide our thoughts and ideas. Please contact us at 508-360-5664 or [email protected].

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Hank has been awarded the Senior Real Estate Specialist designation from the Senior Real Estate Specialist Council, which is affiliated with the National Association of Realtors. Being awarded the designation indicates that the recipient has a clear understanding of the very specific needs of buyers and sellers over 50.

This is especially important on Cape Cod where many of our buyers and sellers are in the “older demographic.”

Mari and Hank

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