Selling the family home after separation

Selling the family home after separation: the challenges for home-owners, real estate agents and home stagers

When spouses decide to separate, joint family assets are usually liquidated and divided.  The family home is often the most valuable asset that needs to be addressed.  However, of all the assets, the home is the one that often carries the most sentimental value and triggers the strongest emotional response.  In many cases, the separation is not mutual and, in those instances, the spouse who did not initiate the separation may not be willing to vacate or sell the family home.  Neve Rajendram with Re/Max Hallmark Realty sees this happening with greater frequency.  She has witnessed separating spouses resisting a sale of their home and citing reasons such as not wanting to undergo the upheaval of downsizing and changing residences, changing the children’s school or settling into a new community. Rajendram admits that these are all valid reasons to not want to sell the home.  She has also observed spouses opposing, delaying or obstructing the sale because of feelings of hurt and anger.

“Getting the spouses to agree on a listing price is challenging because they can let their emotions dictate the sale price instead of listen to the recommendations of their agent”, says Rajendram.

However, real estate experts are not turning away business because of a divorce sale. Rajendram states that agents like her make an informed business decision when assisting separated spouses.  She first interviews them together or separately to ensure there is comfort, respect and sensitivity and then establishes a formal sale process with both spouses signing off on such terms.

Steven Benmor, a certified specialist in family law, states that in some cases, one spouse may wish to purchase the other spouse’s interest in the family home. Benmor states that with any joint asset, because both spouses are the legal owners, neither has a superior right to purchase the asset from the other.  Thus, in cases of a jointly owned family home, if one spouse wishes to remain in the home and purchase the other spouse’s interest, the spouses must agree on a process to determine its value and buy-out.  Benmor admits that in most cases it is simple.  The spouses retain an accredited real estate appraiser to perform an analysis of comparable homes in the neighbourhood, assess their sales history, adjust for differing characteristics such as lot size, garages, square footage and the condition of the structure, in arriving at an expert opinion on the market value of the home.  This often is the best evidence of the value of the family home which the spouses can use to negotiate a buy-out.

But what happens if one spouse does not agree with the appraised value, or even multiple appraisals?  Benmor says that some spouses believe that the only way to determine the true market value of a home is to expose it to the public marketplace of potential buyers.  In major cities throughout Canada, homes have been sold for prices far above the listing price due to competing offers to purchase from desperate buyers.  Some realtors who are competing for new business may make exaggerated representations to home-owners to “get the listing” with promises of a high sale price.

Cris Lam, senior family law clerk for Benmor, explains that in the field of divorce, it is not uncommon for the spouses to distrust one another and harbour suspicions that any agreement that is negotiated is unfair and otherwise favourable to the other spouse.  This emotional state makes it easy to be persuaded by a real estate agent who is eager to obtain a new listing by promising a sale price much higher than its appraised value. Lam says that in these cases, the otherwise simple process of an appraisal and buy-out is replaced with divorce lawyers, litigation and judges.  Lam has observed tens of thousands of dollars spent on motions to compel the sale of a family home, including contested hearings on who the real estate agent should be, whether monies should be spent on repairs and improvements and if costs are to be incurred for staging the home.

“Home-staging can make a big difference in the number of offers made on a home, the final sale price and the speed of sale” says Erin Lazer, owner of SpaceStyle Home Staging, Organizing and Design. Lazer’s objective is to assist the spouses to avoid the impression that the home is a “desperate divorce sale”.

By using expert real estate professionals and good counsel, the sale of a family home, even in the higher conflict divorce cases, could be achieved with much less cost and aggravation than caused by a court-ordered sale. 

Editorial Note:
This article was originally published in 2015. The legal and practical challenges of selling the family home after separation remain just as relevant today. With high property values and continued emotional complexity around shared assets, professional guidance from lawyers, realtors, and home stagers continues to make all the difference.

Steve Benmor, B.Sc., LL.B., LL.M. (Family Law), C.S., Cert.F.Med., C.Arb., FDRP PC, is the founder and principal lawyer of Benmor Family Law Group, a boutique matrimonial law firm in downtown Toronto. He is a Certified Specialist in Family Law, a Certified Specialist in Parenting Coordination and was admitted as a Fellow to the prestigious International Academy of Family Lawyers. Steve is regularly retained as a Divorce Mediator/Arbitrator and Parenting Coordinator. Steve uses his 30 years of in-depth knowledge of family law, court-room experience and expert problem-solving skills in Divorce Mediation/Arbitration to help spouses reach fair, fast and cooperative divorce settlements without the financial losses, emotional costs and lengthy delays from divorce court.