Avoiding Real Estate Pitfalls Caused by the "Final Agreement"

Updated: Feb 13, 2019

I have been a Realtor® for 25 years, but for the last decade my expertise has been working with homeowners who are divorcing. Yes, it is challenging, but extremely rewarding. Each transaction provides new information to share with my clients, the public, or fellow Realtors®.

I wanted to share a cautionary tale to help divorcing women avoid the costly pitfalls that one of my clients experienced. This particular transaction started out smoothly as both parties appeared on title, agreed to sell the marital home, and the Final Divorce Decree was written giving one party the ability to make all decisions regarding the sale of the home.

The action of giving one party the sole decision-making role, is usually put in a Final Agreement to prevent one party from creating road blocks to the sale of a home. It is most effectively used when there is an apparent lack of cooperation between the parties, as observed by the judge. The judge then requires proper stopgap documents be put in place. Apparently, in this case, the high level of conflict between the parties went unrecognized and the necessary document was never prepared.

One of the party’s attorneys contacted me to handle the sale and after meeting separately with both parties, they agreed that I was to be the listing agent. The Listing Agreement was prepared, and the professional stager and photographer were scheduled.

Our forward motion came to a screeching halt when one party (guess which one), flatly refused to sign the Listing Agreement, which promptly stopped the listing process. In any real estate market, time is always of the essence and a delay often stalls a sale, brings a reduced price, and definitely increases anxiety.

The stopgap action to prevent this scenario requires that a Power of Attorney or Quit Claim Deed be signed at the time the Final Agreement is signed, designating a decision maker for the sale of the home. This allows the decision maker to legally move the process forward. Without one of these documents in place, a loophole is created for one party to intentionally derail the sale of the marital home, which is exactly what happened with this transaction.

In this case, it triggered the need for post decree litigation to have these documents created. This created more attorney fees, conflict, and a lengthy delay to listing the home during prime selling season.

Yes, this strategy is commonly employed, so please be informed to avoid this pitfall. If you are selling your home as part of a divorce settlement, and one party is designated as the sole decision maker on the sale, please be sure that the Final Agreement includes either a Quit Claim Deed or a Power of Attorney. Either of these documents will confirm the authority of the sole decision-maker to orchestrate a timely sale, and avoid any interference in the process by the other party.

This turned out to be just the tip of the iceberg with this transaction, but that’s a story for another day!

If you have questions about real estate or legal issues, be sure to post them in our online divorce support community forum and learn from the experiences of other Wildflower Women.

Let's Talk

Joan Rogliano

Wildflower Group, LLC

(303) 667-5485

4 West Dry Creek Circle, Suite 100

Littleton, Colorado 80120

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