Leah Hadley [00:00:01]:
Welcome to Intentional Divorce Insights. I'm Leah Hadley, certified divorce financial analyst, accredited financial counselor, and the founder of Intentional Divorce Solutions. I'll be your guide through the complexities of divorce, finance, and emotional wellness. Join me as we uncover practical tips and empowering insights to help you navigate your divorce with clarity and intention.
Leah Hadley [00:00:24]:
Hi there and welcome back to Intentional Divorce Insights. I am so happy you're here. I have a wonderful guest today who's really gonna give some great insight into dealing with divorce and real estate, which I know can be complicated, and emotional, and it has all the financial issues for a lot of you. So I am thrilled to introduce Bridget Potterton. She is a top real estate broker in San Diego and specializes in, actually certified divorce real estate expert. So she has that specialty designation. She assists the family law community when there's real property that needs to be sold during the divorce process. She's only one of 250 CDREs around the entire country.
Leah Hadley [00:01:08]:
So there's not very many people who really specialize in this divorce area. So the special training and protocols can really help her to help you effectively manage through the challenging process of selling during a divorce. Welcome, Bridget. Thank you so much for being here with us.
Bridget Potterton [00:01:25]:
Thank you so much, Leah, for having me. I really appreciate it.
Leah Hadley [00:01:29]:
Absolutely. Now I know that our listeners probably have tons of questions as it relates to real estate, but I'm curious from your perspective. What are some of the biggest mistakes that divorcing couples make when they're handling their real estate decisions?
Bridget Potterton [00:01:46]:
You know, I think one of the challenges is that selling your home in a divorce is very, different from selling your home under traditional circumstances. And, I I think that it's important to understand the process is going to be different. How you handle things are going to be different. See, in in traditional real estate, I typically meet with maybe a husband and wife or brother and sister, whoever owns the property together. We make the decisions together, and we move forward. But in a divorce transaction, I am representing two parties who are on the same side of the transaction, but who oppose one another. And it it is a very different process. I think that, oftentimes, there are things that can be very frustrating with it, but I I try to work with the attorneys and the mediators in advance in order to, set everyone up for success and then set the expectations.
Bridget Potterton [00:02:48]:
You know, one one challenge that we have in this space is, let's say that one one of them one of the couple is is living in the home and one is outside the home. So we call them the in spouse and the out spouse. The in spouse oftentimes will feel so frustrated. I'm doing everything. They're not doing anything. I have to prep the house. I have to make the beds for the kids every day. And I've gotta, you know, clean the dishes.
Bridget Potterton [00:03:15]:
Everything has to look perfect. And, and they're not doing anything. Right? And so a lot of times, the, person living in the home just gets really frustrated. And then on the flip side, you have the person who doesn't live in the home, and they are so frustrated when they see the photos, or or find out that the condition that they're not cleaning up after themselves before the showings, and they're not making the kids' beds. And they feel hopeless. Right? You know, I I'm I'm gonna lose money on the sale of this house, or it's gonna take longer because it doesn't look that great. And these are challenges that typically, you know, in traditional real estate, we we don't really deal with. There there's a lot of complexities in, selling your home in divorce.
Bridget Potterton [00:04:01]:
And another common one is when you have one party who's on title. So let's say, maybe the couple bought the home together, but for whatever reason, one of them was not on the mortgage or the title. Maybe they had bad credit or something like that, or maybe one bought it in advance before they were married. And for that reason, you know, in in the family law world, they want me to come in and represent both parties. But, technically, my client is the titled person, whoever is on title. And so working with the family law community in figuring out how we can involve the parties even though they're not all on title, while still while still maintaining my fiduciary duty, to the titled spouse. It's definitely a little more complicated than than traditional real estate, but these are important things, and they're things that I deal with every day. Other things that, you know, if if we have a more, a higher conflict type of case, it's not uncommon for me to deal with restraining orders and, things that, again, in traditional real estate, we just don't think about is if you have a restraining order against one party and it's the one that's not living in the house, they can't go to the house.
Bridget Potterton [00:05:17]:
So what happens when, they were kicked out of the house and they have personal property in the home? I need to deliver that property free and clear of anything at close of escrow. So how do I get them in the house when there's a restraining order and they can't be around the other person? So a lot of these, challenges come up in these types of cases, and certainly having somebody with, like a certified divorce real estate expert like my myself can really help you navigate through those challenges when you're working with your attorney or your mediator on how to proceed.
Leah Hadley [00:05:57]:
So many great points that you just made there. And even just the fact that you're so open to working with the family law attorney or working with the mediator to help them navigate through this process is just so beneficial. I'm curious what got you into this work, Bridget.
Bridget Potterton [00:06:15]:
Well, you know, about seventeen years ago, I was pretty green. I was only a couple years into the industry, and an adorable couple had hired me to help them buy their first home. They were newlyweds, and they were super excited. And they they, wanted to go and take a look at this property. So I called the agent, find out information, and the agent, who was a very seasoned, very well respected agent in my area, I called and said, you know, my clients are interested in taking a look at it. And she said, you know what, Bridget? Just so you know, it's a nasty divorce. And, husband cheated on wife. They were married for, like, thirty years.
Bridget Potterton [00:06:55]:
She found out. She threw all of his clothes out the door for all the neighbors to see, and she's giving me all the sorted details. And at the time, I kind of appreciated it because I thought, well, I guess this is what you do when you have a divorce listing. And it was an awful experience for my clients, for myself, for the sellers, for the for their agent, no doubt. There were so many delays. They were playing games with each other, and we kinda got caught in the middle. And we did finally close escrow, but not before my sweet newlyweds threatened to also get divorced if I didn't get them that house soon. And I remember thinking, I am never going to do another divorce transaction the rest of my career.
Bridget Potterton [00:07:42]:
Clearly, the joke's on me, but because now I I travel and I I speak to agents all over the country on how to work in these complex transactions. But I think what I realized looking back is while that agent made a lot of mistakes, she never should have disclosed any of that. Disclosing that, in my opinion, is actually violating our clients' fair housing, rights because familial status and marital status are protected classes, in our in our country's, fair housing laws. And so I think she was just doing the best she could. Back then, there wasn't a lot of great education, and, honestly, there still isn't. That's one of the reasons why I started teaching my my demystified class to realtors because I realized that we were as an industry, we're not handling these cases, with the with the, I guess, white glove service that they deserve. I think as not only as an industry, but I think as a society, we tend to think, oh, a divorce listing is a distressed sale, and they're not. I have some right now, I have some divorce listings, and I have some traditional listings.
Bridget Potterton [00:08:52]:
And if you look at them online, you should not be able to tell the difference of which ones are which. And my team is trained. We don't disclose what what listings of ours are just divorce or which ones are, traditional. And, and it protects our clients because they deserve the very best. And I would say that my clients who are going through a divorce, they probably need that equity more than almost any other type of client out there because everything is being split in some way. And, you know, I'm here in San Diego. It's very expensive to live here. And, we we tend to joke that we're house rich and cash poor.
Bridget Potterton [00:09:35]:
And for a lot of my clients, and I know you as you with what you do, you work with the clients throughout this process as well. But I always worry about my clients. When I sell their house, am I gonna be able to get them enough money to where they can eventually buy again? Maybe not right this moment, but I wanna set them up for success where they can because it is very expensive to live here in in California. And, you know, having equity and and owning a property is a game changer for most people.
Leah Hadley [00:10:10]:
That's such a good point. And, honestly, you know, I do a fair amount of work on California cases. And a lot of times, the equity in the home in California is the biggest marital asset. And really making sure that you're working with somebody like you to maximize the equity that you get out of the house, it's gonna be makes such a huge difference for the parties going forward, and kinda starting that new chapter. You know, one of the things you and I were talking about, Bridget, before we got started, was I see a lot of people trying to figure out what they wanna do with this house because especially people still have these phenomenal interest rates, like 3% interest on their mortgage, and they don't wanna lose that interest rate. And they're always looking for creative solutions in terms of, you know, how can we continue to maintain this house even though we're getting divorced. And a lot of times people decide to co own the house. And I know you were talking about, you know, there's some real downside to doing that.
Leah Hadley [00:11:10]:
I wonder if you would share that with our audience.
Bridget Potterton [00:11:13]:
Absolutely. So co owning a house is very understandable. I you know, I'm a mom, and, god God forbid, I hope I never go through a divorce. But if I did, I I wouldn't wanna give up my house. I get it. Nobody wants to. Right? You have that emotional attachment. But when you're trying to untangle your financials from the other person, it can be pretty risky to to keep the house.
Bridget Potterton [00:11:41]:
Now if one of you is on title and the other one is not, then that might be okay. But what if one of you is on title, but you're both on the mortgage? Then you're both technically financially responsible for the house even if you're not on the title. So I think it's it's important to understand the the differences. On the mortgage, let's say that the person who's staying in the home agrees. Okay. Let's keep the house till the kids turn 18. Right? That's a really common one, till the kids move out. But what if you're both on the mortgage? And what if one of them stops paying the mortgage and you don't know about it? And, yeah, there's there's certain things you can do to to sort of protect yourself from that to a certain extent, but it's still a problem.
Bridget Potterton [00:12:32]:
The other thing is liability. Let's say that, you're the outspouse now, and you're still on the title. You agree to stay on title till the kids are 18, and then you're gonna sell. And let's say you have a pool, and somebody comes over and trips and falls into the pool and drowns, and now you're getting sued. You haven't been to the house in three years, and yet you're the owner. You're just as responsible as the person living in the home because you're you're on title. And so while these cases may these scenarios may seem extreme, this kind of stuff does happen. What if it's what if it's an investment property and you think, oh, well, neither of us even are tied to the property, but we've got that low rate and we're making money every month.
Bridget Potterton [00:13:15]:
Well, what if the same thing happens there? What if you get sued from something that happens with a tenant? You know, you're both you're both responsible. There's a lot of responsibility that comes with being a homeowner. The other the other scenario would be financial. Let's say, on the flip side, let's say that one of you takes takes out an equity line of credit, on the house. Now there are, again, certain barriers in place, but it's not a catchall. So I would say that in in general, from a liability standpoint, it's not a great idea to coown the property with your spouse for an extended period of time. If there's a way for one of you to do a buyout, and I know, Leah, you and I were talking about you maybe having a certified divorce lending professional come on and chat about it. They can tell you a lot more about it than I can, but what the options are for a buyout or to assume the loan.
Bridget Potterton [00:14:15]:
Most loans are not assumable, and it's not like you just hand over the loan and it's, it's an assumption. It's a lot more complicated than that. But sometimes, under certain scenarios, you can do a loan assumption, and they get to keep their they get to keep their rate. But that is more, more the exception than than the rule, I would say.
Leah Hadley [00:14:39]:
Yeah. I'm wondering how somebody like yourself can help navigate situations where one of the spouses just isn't cooperating in the selling process? Like, is there something that you're able to
Leah Hadley [00:14:52]:
do or help with?
Bridget Potterton [00:14:56]:
So, most of my, listings are assigned either from an attorney or a mediator, and they will typically give me a heads up if one person is not on board. I have had somewhere one party wants to attempt to do a buyout, and so I tell them, don't waste your time with me right now. Go try to do a buyout with a lender. And then if it doesn't work out, then you can come back to me. So, typically, I try to encourage them to exhaust all other options, before doing this. Now here's what I have discovered in in years of doing this. Oftentimes, the delays happen because of something else, some other extenuating circumstances. For example, if they're still in court, fighting over maybe child custody or another property, rarely is the reason that they say they're delaying the sale of the house actually having to do with the sale of the house.
Bridget Potterton [00:15:56]:
It it usually has to do with some other piece that they can't control, and so they feel like they can control this piece. And, oftentimes, for me, it's just involving the attorneys and the mediator when I need to to ensure that we continue to move forward. That does happen. I I did have a, a listing that was referred to me. This was a couple years ago from an attorney, and she didn't wanna sell. She did not wanna sell. She was very nice. We met.
Bridget Potterton [00:16:27]:
We kinda talked through the whole process. And, her attorney said, you know, Bridget, she decided not to use you, which is surprising. Normally, when there's a certified divorce real estate expert like me involved, I typically get the listing and I asked her, why do you think that is? And she said, well, I know why. It's because my client wants to delay the process and you have too good of a system, and she doesn't think she can get away with it with you. I love honesty. Right? Right.
Leah Hadley [00:16:58]:
Oh, that's fantastic. Yeah. So what are you seeing, Bridget, right now in the current real estate market and how is that impacting divorcing couples?
Bridget Potterton [00:17:08]:
So I would say the biggest change in the last couple years has been, the interest rates going up. And one of the challenges with the interest rates going up means that a lot of times, people that are going through a divorce and and were planning on doing a buyout can no longer afford to do a buyout because, like you said, they have a 3% interest rate. One of them has to go out and try to qualify for a, you know, 7% interest rate or maybe 6.75. But even still, it's it's not even that simple. If you have a lot of equity and you're let's just say they're splitting it evenly. So we'll say the house is worth a million dollars, and they have a loan for, for 500,000. Now the the, here in in California, like I said, remember, we're we're cash, poor and house rich. So oftentimes, they'll refinance the house and pay the difference off to the person that they're buying out.
Bridget Potterton [00:18:11]:
And so that means you have to go from a $500,000 loan to probably around 700, 7 hundred and 50 thousand dollar loan to pay the other person out, and you just went from a 3% to a 7%. So your payment likely doubled. And, oh, and now you're down to one income. Right? Because you're getting divorced. So that's the the biggest challenge I would say is, it's unfortunate, but I've had several several cases assigned to me in the last couple years that I know they would have preferred to do a buyout. And because the rates were so high, they just couldn't swing it. And that's heartbreaking. I don't I don't take any joy in that.
Bridget Potterton [00:18:50]:
And, unfortunately, I don't see the rates coming down significantly anytime soon. And so I think that's gonna continue to be a problem. There are some banks that will allow you to do assumable loans or certain types of loans like a VA loan, which is typically used for our active duty military and veterans, that are often assumable. But there's a lot of little like I said, a lot of little caveats with it. So it's not just a simple transfer over. There there's a lot that has to be, agreed to and a lot that has to be done in order to, qualify for those, and they can usually take a little while to do an assumable loan. The banks are, in general, are not that motivated to try to help a divorcing couple keep that loan because the bank doesn't want you to keep that loan. They want you to move up to a 7% loan.
Bridget Potterton [00:19:42]:
Right? What's the motivation? So I I would say that that is, a big problem, right now. And then, on the flip side, in general, from for most parts of the country, with the exception of maybe Austin and a couple other cities, we're still in a seller's market. The market's not as hot as it was before, but, still very much a seller's market, which is helpful for, helpful for my client selling. We're not seeing a lot of short sales, a lot of distressed sales. I I have had a couple, but for the for the most part, in in the last couple years, we really haven't seen many. So despite the fact that you, you know, you may be devastated that you have to sell your house, it's a pretty good time to sell. Especially if you bought before 2020, you probably saw a massive amount of appreciation in your house.
Leah Hadley [00:20:38]:
Yeah. It's a really good point. And then, of course, I hear the other side is, you know, yes. We can sell, but then we can't turn around and buy, because of it being a seller's market and, you know, all of the challenges that come along with that. It's just a tough it's a tough topic to deal with when it comes to divorce, when people are splitting up the real estate and deciding whether or not to keep the home or to not keep the home and what that next chapter is gonna look like. Right? Because you already have everything in your life changing from, you know, your day to day experiences, your financial life. Everything is changing, and a lot of people just really wanna hold on to the stability of staying in place in the home that they know.
Leah Hadley [00:21:25]:
So it's a tough issue.
Bridget Potterton [00:21:27]:
That's a really good point. And this might be very, unpopular opinion being me me being a realtor, but I often encourage my clients not to buy a house right away anyway. Yeah. And and that might seem odd because, obviously, I believe in the power of of homeownership. However, you are dealing with so much. You have so many decisions to make about your divorce, and, you know, divorce probably is taking a lot your divorce is probably taking a lot longer than you ever imagined, and you're overwhelmed, and you're emotional. And I I worry that sometimes people don't make great decisions when they're feeling like they're pushed up against a wall. And so I often encourage them, you know, can are you in a position where you can go stay with family for six months or go rent something, inexpensive for a couple months.
Bridget Potterton [00:22:26]:
Just get your just get your head together. Don't go run out and buy something unless you can afford to buy something very similar to what you just are selling, which, unfortunately, in most cases, that's not the case. But, it it it just seems like it's if they're gonna be buying something, hopefully, it's gonna be long term. And maybe if they take six months to a year to kinda get their bearings straight, they'll be in a better position to be able to buy.
Leah Hadley [00:22:53]:
Yeah. I I absolutely agree with that, Bridget, that a lot of times making that big financial decision when all of these changes are going on, people don't necessarily make great decisions. And where I see people losing money on real estate is when they buy and then sell much sooner than they had initially thought that they would. Right? Because then you have all of the costs associated with, you know, the real estate transaction and the loan and all of that. Whereas if you're gonna stay in a property for a period of time, then we see people really growing their their net worth through real estate. And so being in a position to know, I feel confident that this is a home that I'm gonna stay in, is so important in making that decision.
Bridget Potterton [00:23:38]:
Absolutely. Absolutely. I mean, it's it's it's all emotional. Right? There's so many emotions, and sometimes you just find yourself may maybe making a a bad decision. And I I would hate for my clients to buy something and regret it later. You know?
Leah Hadley [00:23:55]:
Yeah. Yeah. So this has been a great conversation. I really appreciate you taking the time to talk with me, Bridget. Where can people find out more about you? And then I'm also wondering if there's a place they can find out more about the CDRE and maybe somebody local in their area.
Bridget Potterton [00:24:12]:
Absolutely. So, you can find me on my website, comehometoSanDiego..com, and, you're welcome to reach out to me if you have any questions. You can always reach out to me too if you are going through, a divorce and you need a CDRE in your area. You can also go to the alumni institute and, Google that, and there's a directory of CDREs around the country, and you can find somebody in your area. It is an incredible, space. It's certainly an honor to help people who are going through a very vulnerable time. And CDREs were specially trained, as third party neutrals. We also are trained to, be expert witnesses.
Bridget Potterton [00:24:59]:
So sometimes I have to go to court and testify on for various reasons with regard to the sale of the home. And, it is a very unique space. It is, like I said, it brings me a lot of, I don't wanna say joy in that sense, but, you know, in working with couples that are not getting along. But there is a lot of gratitude that I have, in being able to help people navigate this very, very difficult transition.
Leah Hadley [00:25:29]:
Well, and I can tell by the way you talk about it that, you know, it must be very personally rewarding. And, it is such an important, time to have a somebody with your expertise to really help on the team. And I always remind people that, you know, divorce really is a team sport. That, really having the right people in your corner can make that transition so much easier. And so keep that in mind. Having a CDRE might be somebody that you wanna add to your team. Thank you again, Bridget, for being on with us today, and I will see you all next week.
Leah Hadley [00:26:06]:
Thank you for joining me on Intentional Divorce Insights. It's a privilege to share this time with you. I hope each episode offers valuable guidance to navigate your journey. If you find our content helpful, please leave a review to help others discover the benefits of intentional decision making in divorce. Until next time, take care and continue to embrace your path with intention.
