Relationship breakdowns are hard on everyone and particularly so if there is property involved.
During such an emotional time, financial missteps can be made which may have long-term implications.
So what are the biggest property mistakes people make when a relationship ends and how can you avoid them?
Trying to sell under the radar
In the heat of a relationship breakdown, people can act irrationally.
Sometimes they’ll even try to sell their joint asset under the radar so their soon-to-ex partner is kept out of the loop.
Of course, this is pretty much guaranteed to backfire, especially if both parties are owners of the property because an agent can’t legally sell it without the approval of everyone.
Rushing to sell
The urge to move on quickly can spur exes to hit the fast-forward button on a sale.
But launching into a speedy off-market sale isn’t necessarily the best way to go, particularly when the market is hot and a four-week auction campaign could yield a much stronger result.
While it might difficult to achieve in times of emotional turmoil, it is always best to not rush a big decision like selling real estate.
Disclosing the break-up to potential buyers
Most successful property investors understand that the “d-word”, that is divorce, can result in some bargain-basement buying opportunities.
Often the sellers are rushing to sell (as I mentioned above) or the property is already half-empty after one party has vacated the premises.
When the fridge, washing machine and half the clothes in the wardrobe have been cleared out, it doesn’t take much for buyers to work out that something is amiss.
When selling property, it’s always important to have it looking its best, so if you need to hire furniture to hide the fact that a separation or divorce is under way then I would suggest you do so.
Also, make sure you provide advice to your selling agent about your desire for your personal circumstances not to be disclosed to potential buyers.
That way, no one should know that the property is being sold to complete a divorce settlement, or similar, and you’re more likely to achieve a good sales result.
Buying a new house too quickly
After the property has been sold, it’s equally important to not buy another one straight away.
Again, real estate is not something that anyone should make hasty decisions about.
I recommend taking time to reassess your short- and long-term housing needs, especially if you have children involved who may be staying with you from time to time.
Renting may be an ideal interim option, especially when contemplating a move to a new neighbourhood.
Not paying your fair share of the bills
We all know that there can be a fair amount of animosity during a relationship breakdown, but that doesn’t mean that your financial responsibilities also disintegrate.
It might be tempting during a divorce dummy-spit to stop paying the mortgage and the bills but such a strategy is unwise.
Not only do rates show arrears, banks can also become involved with the sale.
A mortgagee sale is also far more stressful than a divorce-driven sale and can often drive down the sale price down even further.
It’s clear that the emotional turmoil of a break-up is hard enough to handle, but as these tips have shown it’s important to not make it even harder for you to move on by making bad financial decisions that can linger for much longer than they ever needed too.
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