Advice for Realtors

You’re a realtor for a divorcing client and you’ve just signed a Listing Agreement for a great home in a neighborhood that sells itself. You’ve sold here before, and you know that houses here will go under contract within days of listing. Like magic, you list the property and an eager qualified buyer makes a good offer. The inspection report comes back clean and you can just about smell the commission check. This is going to be the easiest close of the year.

Ask Married Clients 3 Questions Before Listing

Working with Divorcing Parties

Your client calls you and mentions he and his wife don’t agree on the details for sale. And you start getting that prickly feeling that this deal might go sideways.

This doesn’t have to happen to you. A realtor for a divorcing client just needs to take extra precautions. But, you just make these 3 questions part of your listing routine.

1. Are you in a pending divorce or about to begin the divorce process?

2. Have you consulted with your divorce attorney about your plans to sell?

3. Is there a Standing Order in your divorce case that prevents you from selling this property?

Question 1: Are you in a pending divorce or about to begin the divorce process?

The real estate title rules and marital property rules are not the same. In the real estate title world, the record title holder is generally the owner. But in the divorce world, a spouse can have an ownership interest in real estate even if her name is not on the title. A spouse can also have an equitable or ownership interest in property owned by a business entity. (Read more about marital property here.)

What does that mean as a realtor for a divorcing client? It means that your client may have clear record title and still lack the legal authority to sell, especially if he is in the middle of a divorce. And you, as the realtor may find yourself in an uncomfortable position.

Question 2: Have you consulted with your divorce attorney about your plans to sell?

If you know that your listing client is in the middle of or contemplating a divorce, confirm that he has consulted with his divorce attorney about listing or selling the property. Regardless of whose name is on the legal title, the real estate may be a marital asset. Marital assets can be awarded to either party in a divorce, regardless of legal title. 

Question 3: Is there a Standing Order in your divorce case that prevents you from selling this property?

Almost every county in Georgia issues what is called a Standing Order in its divorce cases. Generally, the purpose of the Standing Order is to protect children and assets while a divorce is pending. The Standing Order will almost always include language like this:

You shall not sell, encumber, trade, contract to sell, or otherwise dispose of or remove from the jurisdiction of the court, without the permission of the court, any of the property belonging to the parties except in the ordinary course of business.

What does that language mean? It means that your client could be subject to contempt of court if he tries to sell a piece of property without permission from the Court. It also means that you may get stuck with a listing you can’t market or a deal you can’t close if things go sideways.

Importantly, a title examination will not uncover either the pending divorce case of the Standing Order. Title standards do not require the examiner to check for pending litigation, and Standing Order are not recorded in deed records.

Best Practice:

The best practice as a realtor for a divorcing client would be to get the divorce attorneys for each spouse to get a consent order from the Court permitting the listing/sell of the property. At a minimum, you should get written confirmation from both your client’s divorce attorney and the spouse’s divorce attorney giving the okay on the listing.