Participating in Mediation
Managing your Emotions
Establishing the Property Pool
Progressing Complex or Stalled Negotiations
Reaching an Agreement
Selling Your Property
Choosing a Real Estate Agent
Preparing a Property for Sale
Divorce Property Settlement Process
Preparing For Property Settlement Mediation
1. Agree to engage in mediation
An attempt to mediate is mandatory (except in cases of proven family violence) before you can file an application to have the Family Court hear your property settlement matter. Both spouses should agree to attend mediation with the intention of reaching a resolution. This may require committing to more than one session.
2. Consider the logistics
Will you split the fees? How much time can you commit to the sessions? Deciding these factors before the mediation will help you to increase the effectiveness of the time you spend with the mediator.
3. Choose the right mediator
Make sure that you feel comfortable opening up to him/her. If one partner makes the decision unilaterally on which mediator to use, the other partner may feel disenfranchised. To avoid this, either discuss the options and make a choice together or one partner can source three suitable options with the other partner having the final say in which of the three to engage. Things to consider when choosing a mediator could include, experience and qualifications, availability, word of mouth recommendations, accessibility, cost and overall approach.
4. Make sure you are super organised
You need up to date and reliable information to make good decisions. Ensuring that you have all of the information to hand and that the values are agreed between you so far as is possible will spare both your time and money in mediation.
Ø Prepare an overall snapshot of your financial, family and personal circumstances for each of you when you came into the relationship, as well as during the relationship and since separation, a record of all your assets, liabilities, cash, real estate and superannuation. You should also include details of the contributions each of you made, both financial and non-financial during the relationship and since separation. The Divorce Resource Split Kit software offers a simple, efficient and structured solution to help you to collate all of the relevant information.
Ø You can work on the list together with your ex-partner or separately, depending on your relationship.
Ø Check with your mediator if you need original documents.
Ø Make a checklist of issues to discuss at each session.
5. Address your emotional state
Going through a separation is a highly stressful time in any person’s life. Even when it is a reasonably amicable split, negotiating the property settlement can bring emotions to the surface that derail the process. This is especially true when the property settlement also involves an element of care and financial support for children. You may benefit from counselling before you attend mediation sessions to help you work through the emotional trauma to put you in a better headspace for being able to negotiate without getting upset, resentful or confrontational.
6. Plan your Budget
Knowing beforehand what your projected expenses are likely to be, will make it easier to identify your negotiation boundaries. There are budget and cash flow projection facilities in the Divorce Resource Split Kit, or you can find budgeting templates on the web. You will need to:
Ø Draft your current budget.
Ø Draft a projection of what your budget would look like after the divorce.
Ø Be realistic.
Ø Find a family budget template online or ask your mediator for one.
7. Set goals
Once you know what you have, the next step is to figure out what you want to do with it.
Ø Try to determine what’s truly important to you, and what you can live without.
Ø Try to identify the reasons something is important to you. Is it sentimental, financially strategic or are you making decisions based on the heated emotions of the moment? If it is the latter, work hard to separate your emotional attachment and to make rational decisions that will benefit the future of you and your loved ones.
Ø Making lists helps.
Ø Decide on your bottom-line goals.
8. Learn about your rights and obligations
To get a clear picture of what your options are, do your research before you commence mediation. Ask questions, gather information, read books and articles. It is better to know the terms and implications before the divorce process. You can download a free e-book version of “The First Steps of Separation and Divorce” by applying the current code displayed on the Divorce Resource Facebook page cover image.
9. Put your concerns on the table
Before you attend mediation, consider what your concerns are and document them so that you are able to express yourself clearly without becoming emotional. It may serve you well to forward your concerns via email to the mediator and your ex-partner before attending the session.
10. Consult a family lawyer
It is useful to have sought legal advice before attending mediation sessions as to the likely legally binding outcomes you could expect if a court was to rule on your case.
Participating in Mediation
11. Arrive mentally prepared
Don’t leave your mental preparation until the last minute. You should have considered points 1 – 10 long before you reach the mediation session and have all of your documentation in order. Attend the session with a clear understanding of what you are hoping to achieve and the reasons you feel this would be the best outcome. Draw up a list of issues on which you are prepared to compromise as well as those points which are non-negotiable.
Make sure you know well in advance the location of the meeting and how you will get there. Arrive early to give you a chance to relax and collect your thoughts before the meeting. You may wish to take someone with you for support while you wait. If you don’t want to engage with your ex-partner before the meeting, wait close by the venue until just before the appointment.
12. Acknowledge the other person’s feelings
Just like you, your ex-partner is likely to be struggling emotionally leading up to the mediation, (regardless of how they may be presenting themselves to you and others). It is of particular importance to consider how they may be feeling if you are the person who instigated the split and it came as a surprise to them. The other party may feel betrayed or resentful and have some emotional catching up to do.
13. Understand the concept of ‘no-fault’
Australia has a ‘no fault’ divorce policy. Therefore, all that is needed for a divorce application to be tendered is that the couple has lived separate lives for twelve months and that one or both parties consider the relationship to have broken irretrievably. There are no other grounds such as adultery, drunkenness or desertion that are taken into consideration these days and in almost all cases, you will not be compensated in a property settlement for your former partner’s bad behaviour.
14. Take your time
Take your time to understand the process and the outcomes that are being discussed. If you have specific concerns, ask your mediator for time out every now and then. Experienced mediators understand that some circumstances are complex and you may require time to consult an expert or collect yourself emotionally before you can proceed to resolution. Do keep in mind though that you are paying per hour for the mediation sessions and you should aim to utilise as much of the time as you can to make ground towards a resolution. If you get stuck on a particular point, it may be worth agreeing to disagree and moving on to something else that you are more likely to be able to reach an agreement.
15. Get legal advice throughout the process
It is important to know what your rights are and imperative to understand which issues are relevant and those that are simply not regarded as relevant in family law negotiation, even though they may be hurtful, upsetting or irritating. If you feel that your lawyer or adviser is more adversarial than you’d like to be, ask the mediator for a referral to a lawyer with a more collaborative approach.
16. Consider the other person’s point of view
If you can understand his or her motivations, you are likely to move more quickly to a resolution. Be fair to your ex by focusing on the things that are going to matter in the future for the overall well-being of yourself and your family, and not on the emotional issues that you personally are dwelling on now.
17. Tackle one small issue at a time
Even though you will have many points to discuss, don’t try to solve everything at once. Every little step leads to a solution. Effective negotiations begin by identifying all that you do agree on and then tackling the issues that are contentious.
18. Consider alternatives
Be prepared to brainstorm and discuss solutions that you never thought of before. Together with your mediator, consider alternative approaches which could accomplish what you are looking to achieve, within the scope of what is possible and reasonable.
19. Be flexible but also know what your bottom line is and remain firm
The goal is to ensure that you both come away from the process feeling heard and feeling like you’ve reached an agreement that is fair and equitable and in the best interests of any children involved. Reaching that point will invariably involve flexibility and a willingness to compromise by both sides. Please note that ‘equitable’ doesn’t necessarily mean an equal split in terms of the property settlement.
20. Don’t be confrontational
Use language at the mediation table that is non-confrontational and invites discussion. This rule applies to body languages as well. Use words such as I feel instead of I know. Stay away from generalisations such as you never and you always.
Managing your Emotions
21. Get professional help
Heated emotions, will not allow you to have the clear head you need. Find a good therapist experienced in helping people through the separation process to help you handle your emotions, accept your new realities and plan a proactive and positive course of recovery.
22. Avoid conflict.
If you feel that you are getting upset and the discussion could escalate to conflict, take a short break from negotiations or discussions with your former partner. Always put any children first and shield them from all forms of conflict.
23. Stay proactive!
It will take time and effort, but you will get through this. It may not seem like it at the time, but this too will pass. Your life will return to a new and happy level of normal. You may even find that you become an improved version of yourself. It’s especially important at this time to take care of yourself physically and emotionally.
24. Don’t let your emotions control your actions
Don’t waste time and energy in settlement negotiations around proving fault or getting revenge. The person who seeks to lay blame is unlikely to reach a resolution. It is sad, and it can be humiliating and hurtful, but you cannot change what is done. You do have a choice as to how you react to it. Trying to score points against your former partner in retaliation for how hurt you may be feeling will not serve you well.
25. Join a support group
You will soon realise that you are not on your own and separation and divorce is commonplace in our society. There is likely to be a support group available in your local area. If not, or if you would prefer to participate anonymously, there are many support groups, Facebook pages and community forums available online.
26. Learn to communicate effectively
When possible, try your best to communicate with the other party in person or on the phone. What seems like a bomb in writing may not be so bad after all when discussed face to face. If you are unable to control your emotions when you see your former partner in person, you could consider text or email to communicate. Regardless of the method you choose, stick solely to the point that needs resolution and don’t allow the conversation to get off topic and descend into blame and accusation. Respect other people’s time and do not interrupt them too often with non-urgent issues.
27. Get support from your family and friends
These people are bound to be your strongest supporters. Don’t forget to thank them periodically! Also, try not to be too self-indulgent. Remember they have their own lives and problems to deal with as well.
28. Calm yourself
Take steps beforehand to ensure you attend mediation or any other meetings with your former partner as emotionally and physically composed as you can be. Try controlled breathing exercises, mediation, regular exercise and adequate sleep to help you with this.
29. Separate your property settlement negotiations from your ego
Be honest with yourself. Do you need the things you’re fighting for, or is it just that you do not want your spouse to have them?
30. Engage in two-way communication
Refrain from defending yourself by “shutting down” others while communicating. Mediation is a negotiation process. Negotiation requires conscious listening, compromise and civil communication.
Establishing the Property Pool
31. Identify all marital property
All marital property is subject to equitable distribution.
The marital property sometimes referred to as the balance sheet or the property pool is the total list of assets, liabilities, household goods and personal items of material value plus any superannuation held by the couple at the time of settlement negotiations, either jointly, or in one spouse’s name. This is the list of items that will be divided during the property settlement process.
Sometimes couples can agree to distribute property owned separately before the relationship to the original owner where the other spouse has no claim, but most often, even property held independently before the relationship is eligible to be split between you and your former spouse.
32. Learn about the family law principles regarding property distribution
Save time and money by gaining a good understanding of the basic family law principles relating to property distribution before you commence negotiations.
The court follows 4 steps to reach a decision:
Ø Identify the asset and liabilities available to split
Ø Consider the contributions made by both sides (financial and non-financial) before and during the marriage and since separation
Ø Consider other factors such as earning capacity, the age and health of each person, ongoing living expenses and implications of the care and financial support of children
Ø Consider whether the financial agreement is fair and equitable.
When an agreement is reached, or property orders are made, you may be asked to transfer or sell property.
Depending on your asset pool, contributions made and the ongoing needs of both people, you may be asked to:
Ø Split superannuation
Ø Pay a lump sum of money to another person within a specified time frame
Ø Pay periodic payments to another person for a specified length of time.
33. Understand the concept of fair and equitable distribution
The court often orders the sale of real estate and a fair and equitable division of net sale proceeds. Equitable distribution doesn’t always equate to an equal distribution to each party: It means that the court would look at a variety of factors to determine a ‘fair’ distribution taking the current circumstances, contributions, resources and future needs of both sides into account.
34. Who gets the family home?
There is no principle of family law stating that either one of you is entitled to keep the family home, sentimental holiday home or investment real estate. Whilst it may be desirable to do so financially or sentimentally, you may be forced to sell real estate and divide proceeds if a equitable agreement cannot be reached by one party transferring the title to the other for an agreed value. In reaching your agreement, consider the impact of selling and moving away from the area on your children. Is it better for them to stay in the family home until, say, after the exam period is over? A factor that is difficult for many people to digest is that family breakdowns usually mean an initial lowering of the standard of living for all parties and a large part of that relates to affordability of accommodation. While it can be an emotional decision, it may be in your best interests to relinquish the family home.
35. Establishing real estate values
To proceed with property settlement negotiations, you will need to work with agreed values. Be aware, the value of the asset is not what you paid for it but the current market value at the time of your negotiations. There are several ways to arrive at valuations for real estate:
Ø an appraisal from several real estate agents to determine an average
Ø independent expert valuer
Ø bank valuation
If you would rather choose just one real estate agent, or one independent property valuer, to avoid any accusations of a conflict of interest or biased valuation, one party might identify several that would be suitable, then the other party chooses which individual to engage.
Refer to points 81-90 for tips on choosing a real estate agent most suited to valuing and potentially selling or renting your property. You may elect to engage one agent to do the initial valuation and then a separate person later on down the track to market your property.
If you are unable to establish agreed values on the property pool, consider attending mediation to assist you in this process. You must attempt mediation to try to settle property division before you can lodge an application to the court for intervention.
36. Identify mortgage balances
To gain an accurate snapshot of the net asset base available to split, you will need current balances owing, along with any fees associated with early termination, transferring or refinancing of mortgages that you have over real estate.
37. Share property and financial information with your spouse in writing
There is usually a cost associated with attaining valuations and balances of your assets and liabilities. As you will inevitably have to reach a negotiated split from a single agreed balance sheet, you will save time and money by openly disclosing detail to each other during the process instead of competing with each other to retain information, or by leaving one party to attain valuations only to be then disputed by the other party.
38. Sort items into categories
List your assets and liabilities into groups such as such as real estate (and associated mortgages), cash, vehicles, household items with assigned valuations.
39. Calculating possible outcomes
Remember the aim is to create a snapshot of your financial situation from which to negotiate a property split that is within the range of what the court would deem to be fair and equitable, without the costs, time and stress involved in pursuing orders through the court. Aim for possible outcomes that will see children well cared for and accommodated in suitable accommodation when spending time with either parent. Essentially, a result that will allow both of you the best chance to survive financially into the future and one that most meets each of your needs and is in the best interest of all parties, particularly any children of the relationship.
40. Allocate property split and costs
Make an attempt between yourselves to decide how any real estate might be divided and transferred and whether there will be any costs associated with doing so before seeking expert assistance. This will give you a better point to start from in negotiations than going in cold. If you can do this together, great! It will save you time and fees. You may save on stamp duty if the property is transferred by Order. If you can’t manage to sit together civilly to discuss the split of property, one party can make a written offer (without prejudice) based on the asset pool you have determined and present it to the other for consideration and counter offer.
A without prejudice offer can’t be held against you in the future. It is merely an attempt to reach an agreement, which if not accepted falls away.
Progressing Complex or Stalled Negotiations
41. Look for alternative paths forward
If you have been unable to reach an agreement after considerable negotiation, it may be beneficial to reassess your original position. Have your expectations, your earning capacity, your emotional state or your anticipated costs changed since you documented your original position? If they have, perhaps there is some room to compromise after all.
It is important that you are working from current valuations. If your negotiations have dragged on for a considerable time, have the valuations of real estate, business interests or other material items fluctuated to such an extent that a revised valuation would alter the possible outcomes? Be reasonable about this. Markets do fluctuate, but in real estate, that often occurs over a period of years rather than months. The time, cost and opportunity lost in the process of revaluation then coming back to the table to negotiate an agreement, may not be worth it in the big picture.
42. Protect your property investment and future borrowing capacity
You may need to seek legal or financial advice to secure your property until your property agreement is finalised. If you have serious concerns that your former partner might try to hide, sell or give away property you may benefit from legal advice about seeking interim orders to transfer the property or to place a caveat on the property. There are cost and ongoing consequences with both options.
When a property is financed, it is vital that repayments are adequately serviced so as not to default and jeopardize your investment or your credit rating.
43. Financial advice
Consider the benefit of consulting with a neutral and independent financial expert who may provide you with more creative ways to split your assets and restructure mortgages, which could save you money or be more tax efficient. This is especially viable when sophisticated financing structures, joint ventures, Capital Gains Tax, or other taxation considerations apply. An independent and neutral finance expert working for both of you may provide alternatives that preserve more net wealth for both you and your loved ones. Modelling options with an expert, which may involve entering into a separate business agreement with your ex-spouse for a period of time to maximise the profit potential of real estate investments, rather than an immediate financial split, could provide the breakthrough needed to reach a property settlement agreement.
44. Family Dispute Resolution (FDR)
Financial Dispute Resolution (FDR) with a private, independent registered mediator or a judicial officer of the court could be the next step when negotiations break down. FDR is a process in which a neutral facilitator helps people affected by separation or divorce to resolve property disputes with each other. The aim is to reach an agreement as an alternative to going to trial.
Family dispute resolution may not be appropriate in your situation if:
Ø there is family violence or risk of family violence
Ø there are particularly complex financial, business or real estate structures which require expert witness input
Ø there are severe and ongoing parenting issues
Ø one person refuses
Ø one of the parties suffers from mental illness or a drug or alcohol abuse problem.
45. Legal process
It may be that yours is one of the few cases which will not be resolved without court intervention. Familiarise yourself with the procedures of the Family Law Courts in your State and the associated costs, to determine whether or not you are prepared to pursue the matter or revisit the negotiating table.
46. Time limitations
Some couples choose to apply for a divorce before they have settled on a property split. In this case, there are time limitations on property settlement through the Family Court. Married couples must apply to the court for a property settlement application within 12 months of the divorce order being granted. For de facto couples, the time limit is two years after the date of separation. After this period, you must make a special application to the court to hear your matter.
47. Substantiate your claims
Identify the areas of disagreement and prepare to defend your case by collecting all of the ‘relevant’ information to support your case theory. You will need this level of detail regardless of whether you choose to pursue private mediation, go to court with representation, or file as a self-represented litigant.
48. Decide on the available options for reaching a final resolution
If FDR with a trained and registered mediator, or judicial officer in the family court, is not appropriate for your situation, there are other avenues available to you, which may involve legal representation for one or both parties. There are alternative options, and a collaborative approach between the lawyers aimed at keeping you out of the court system may serve you better. Investigate the collaborative family law associations near you or family lawyers who might agree to privately mediation between the parties.
It is becoming increasingly common for the courts to deal with litigants in person. This means an individual who presents their own case to the court without legal representation. If you choose to self-represent, you must be confident that you will be able to competently complete all of the necessary court documentation and represent yourself well under pressure.
Using lawyers to negotiate on your behalf privately may be faster and easier than lodging an application to court as a self-representing litigant but there will be professional fees due. If you are represented, you can focus on settlement rather than the litigation process, and you don’t have to engage directly with the court system or your former partner. Once you hire a lawyer, there is a tendency to lose some control over the process. Even though it is up to you to instruct your lawyer, often the direction and pace at which the case progresses rests with them.
49. Revise your Will and Estate Planning
A Divorce Order will make your Will null and void. However, this is not the case if you are only separated. You should carefully consider how you would like your property interests distributed in the event you were to die before a property settlement was finalised and update your Will accordingly. Unless it is specifically stipulated otherwise, a Will made during separation will be voided when the divorce is granted.
50. Finding a lawyer
If you feel you would benefit from legal representation, thoroughly investigate your options. Are you eligible for Legal Aid? If you pursue your matter through court, will you need a barrister in addition to a family lawyer? By engaging a lawyer, and pursuing your case through the courts, you are likely to incur significant costs. Anecdotal evidence suggest that most people end up spending more on legal fees than they were originally quoted. Scrutinize the costs of engagement letter from your lawyer to ensure you have thoroughly considered the potential cost of doing so, versus the benefits, before you proceed.
Most family lawyers are familiar with financial issues, and asset classes usually associated with family law property splits. However, if your issues involve complex financial or legal matters involving third parties, complicated real estate or business contracts, joint ventures, caveats, council planning issues, international jurisdictions or other complex transactions, you may benefit from engaging a lawyer who specialises in commercial, real estate, contract law, wills and estates etc.at the outset, rather than a family lawyer.
Reaching an Agreement
51. Record your agreement
Whether you reach a deal by yourselves, by consent with the help of mediation or through the Family Court, it’s vital that you document the terms. If you are amicable, you could choose an informal verbal or written document. However, you are strongly advised to make your agreement legally binding by engaging a lawyer to draw up a private financial agreement or by lodging a consent order to be approved by the Family Court. Financially binding agreements are not available to the public for scrutiny whereas a consent order sealed by the Family Court may be. If your case were to be determined by a Magistrate, court orders would be drawn up and lodged with the Court.
52. Legal advice
While not essential in lodging consent orders, it is advisable for each of you to seek independent advice from a family lawyer but it is a mandatory step required to make a private financial agreement legally binding. Some lawyers offer a free one-hour consultation, and this will be useful to determine whether or not you have a rapport and can rely on them to advise on ensuring the agreement is enforceable rather than encouraging you to renegotiate the terms. You should not expect a lawyer to write up or scrutinise a legally binding financial agreement during a free consultation. It is possible to lodge an application for consent orders without the assistance of a family lawyer, however you may benefit from their input. There will be filing fees associated with making any application through the Family Court.
53. Interim funding
Be sure to make provision for the distribution of funds to meet living expenses for each of you and to service utilities and the upkeep on real estate, until you have finalised your property settlement. Decide whether funds will be divided between you into private accounts, deposited into a shared bank account, or into a solicitor’s or managing real estate agent’s trust account to service costs. Do not allow mortgages or other real estate related expenses to lapse.
54. Make your own decisions
Ensure you understand any documents you are asked to sign and have not been coerced into accepting a settlement or take on the ownership of real estate or other assets or liabilities that you cannot afford to service, or otherwise believe to be unjust and inequitable.
55. Reduce your costs
Be aware that there are fees associated with filing applications and orders with the court, appearances in court, in addition to the professional fees of lawyers and barristers. Congratulate yourself if you are able to reach an agreement! You have reduced the financial and emotional costs of further legal proceedings. Settling on a compromised agreement in a timely fashion minimises your lost opportunity costs by freeing up your funds and energies to pursue opportunities to rebuild financially independently to you former partner. Ensure you maximise this financial and emotional cost-benefit throughout the process of formalising and effecting the undertakings in your agreement. Work together to provide the documentation and take the actions necessary to avoid unnecessary filing, legal services or late lodgement fees.
56. Maintain the civility of your relationship
A non-litigated, amicable agreement is more likely to result in a better civil relationship in the future, which is especially important if there are children involved. It is important to continue to work on maintaining a business-like relationship even after negotiations are completed. Ensure that you do not disrupt the process by providing documentation and any other information that is required to action the changes outlined in the agreement.
57. Deal with your grief
For some people, a forced sale of the family home in a divorce settlement can be extremely upsetting. There may be an element of emotional pain to deal with when you shut the door on the memories and the hopes and dreams for the future which were created in that home. Seek professional guidance to help you to process your emotions. Remember that you can and will move forward and overcome this difficult phase of your life, and the faster you get through the phase, the quicker you can move on. For many, the move can represent and exciting new opportunity for renewal.
58. Don’t stop before the finish line
The negotiation phase can be an emotionally exhausting time. Don’t fall into the trap of dropping the baton before the finish line by ‘taking a break’ or ‘relaxing’ after negotiations and actually never seeing the process through to the completion of a legally binding agreement. Couples who don’t formalise their agreement frequently end up having to revisit the entire process, sometimes years later, over a simple but disputed issue. Often the catalyst for this is that one partner has rebounded financially to a greater extent that the other. If you didn’t formalise your agreement, the new balance sheet will probably include the revised current values. Protect your future gains from any future claims.
59. Service of documents
When you file documents with the court, the next step is to arrange to ‘serve’ a copy of the papers to the other party or parties. This can be done by registered post or in person by a third party who is over 18 years old and is able to identify the individual being served. This step may be avoided if you are lodging a joint application.
60. Once the point’s been made, stop talking
Settling for an amicable agreement that you ‘can live with’ reduces stress, conflict and resentment. If you didn’t get quite the result you were hoping for regarding keeping any real estate, the market valuations or sale proceeds, let it go and move forward. Couples who continue to argue over a done deal and seek compensation, or to blame their former partner for adverse market conditions and other related but uncontrollable factors, rarely get a good return on their invested time and money. They often end up dwindling away their asset base in legal fees and court costs, inevitably adding to their ongoing stress levels.
Real Estate Transactions
61. Listing Period
The listing period is the period during which the agent you have engaged to represent you is authorised to sell your property. If the agent introduces a buyer prepared to pay the asking price (or a lower price acceptable to you) during the listing period, then you are obliged to pay them the agreed rate of commission.
If you sign an exclusive authority with an agent and the property is sold within the exclusivity period, even if they are not responsible for introducing the buyer, you must pay the agreed rate of commission to the agent.
The government no longer sets capping on maximum agents’ fees. Agreements are negotiable between you and your agent.
With the popularity of renovation shows on TV, most people are aware of the concept of real estate auctions where potential buyers bid against each other to determine the sale price of the property.
Useful things to know about auctions:
Ø The terms of the auction should be available in writing from the auctioneer before the auction commencing
Ø The seller is not obligated to accept the highest bid
Ø Generally, bidders should have finance approved in advance as the winning bidder will have to pay a cash deposit of 10% of the sale price on the fall of the hammer and the balance within 30 days.
Ø Sellers may, and often do, arrange for dummy bids to be offered up at auctions.
63. Title Deed
The Title Deed is the document that details the specifics of the land parcel and the dwellings approved for construction on the parcel of land. When a property is sold, the title is transferred from the seller to the purchaser. The original Certificate of Title is held by Landgate. A duplicate certificate is usually requested by financiers and may also be held by the owner.
There are different types of titles:
Ø Freehold titles – commonly associated with single-building land and agricultural land.
Ø Strata titles – linked to multi-residential developments such as duplex, triplex, townhouse, apartment or unit blocks. This type of title divides the land into private parcels and common property. Strata titles differ from other titles because of the need to protect the co-owners from costs and responsibilities associated with the common property. The owners of strata titles are charged levies by the strata company for the purpose of maintaining common areas. These fees are usually paid quarterly.
Ø Green titles – refers to a development of multiple units similar to a strata development but a green title generally has no common areas that need to be shared.
Ø Crown leases – are typically large tracts in remote locations. They are long term leases granted by the Crown, such as pastoral station leases.
Ø Crown land titles – are defined parcels of Crown land.
Subdivision involves splitting an existing property into smaller lots and obtaining new certificates of title for each lot. It is a complex process and can take months to complete. Although it carries significant cost considerations, if you are not restricted by urgent time and financial constraints, it can be a valid option for maximising profits and increasing the funds available to split between both parties.
65. Offer and acceptance
For the sale of property to be affected, a Contract of Offer and Acceptance Contracts is required. The purchaser details their offer in writing and signs the offer. The seller either accepts the terms of the offer and agrees to the sale by signing the contract and notifying the buyer, or submits a counter offer with alternative terms.
The buyer may withdraw the offer or alter the terms before receiving notice of the seller’s acceptance. However, once the seller accepts the buyer’s offer, signs the contract and notifies the buyer, both parties must honour their respective obligations set out in the general terms of the contract. The buyer may only alter the terms after both parties have signed if the seller agrees.
66. Tenants in Common or Joint Tenants?
Two or more buyers may own the property as joint tenants or tenants in common. Husbands and wives usually buy as joint tenants, business partners, or possibly de facto or people marrying for the second time, as tenants in common. If the title is owned by joint tenants and one owner dies, the other will automatically become the sole owner of the property. If the property is owned as tenants in common each owner’s interest will survive their death and form part of their estate for distribution according to their Will.
67. Settlement date
This is the business day on which date the balance of funds is paid and the title transfers to the buyer. If no specific settlement date is stated in the contract, then settlement will be determined by the General Conditions. If the settlement is delayed the purchaser may be liable to pay penalty interest.
68. Occupational rent
When a buyer wishes to have access to the property before ownership transfers on the settlement date they can negotiate to pay a periodic amount known as occupational rent to the seller in return for early occupation of the property.
69. Subject to finance
“Subject to finance” is a common condition in offers to purchase and indicates that the buyer needs the approval of finance before committing to purchase. It allows a buyer to withdraw from the contract without penalty if they abide strictly by the conditions they outlined in the offer but can’t obtain finance.
The seller may, without warning, terminate the contract if the buy does not comply with the terms. Contractual obligations can’t be avoided if the buyer does not meet the terms so it is essential that they are specific in outlining the exact circumstances under which finances can be sought. Details such as the preferred lender, the amount of the loan, and the maximum interest rate should be included in the offer.
Conveyancing is the process of transferring ownership of a legal title of land (property) from one person or entity to another. A conveyancer is a licensed and qualified professional whose job it is to provide advice and information about the sale of a property, prepare the documentation and conduct the settlement process.
Conveyancers don’t necessarily have to be lawyers, but often it is lawyers who carry out this work. As part of their responsibilities, a conveyancer will prepare and lodge the necessary legal documents. Put the deposit money in a trust account, calculate the pro rata payment of rates and taxes, action the settlement of the property and notify all affected parties including the buyer, seller and finance institutions.
Selling Your Property
71. Should you sell?
Depending on the market conditions and your ability to service any debt and maintain the property, you will need to make as decision as to what options you have regarding realising your investment in your property. Should you redevelop, renovate, occupy, lease or sell? In general, it’s feasible to sell a house without an agent. However, the added stress is really not necessary and it’s often a better option to engage a neutral party to manage the process of marketing and sales negotiations when you’re in the middle of a divorce. An agent will be able to provide you with information about the market, which in addition to advice from your accountant or financial adviser will help you to decide on the best option for you.
72. Do your market research
It is important to manage expectations, and a good way to do this is to familiarise yourself with the market you are entering into. Check recent sales and investigate the other properties on the market in your area you will be competing against. Be cautious of comparing the current asking prices of properties to what you are hoping to achieve for your property. The recent sales prices achieved is a more reliable indicator. Look at the time that properties like yours are taking to sell as well as the number of sales in your area.
73. Eliminate buyer resistance
Consider having a termite and electrical inspection done before marketing your properties. Do all minor repairs and perhaps repaint and freshen up the gardens in advance of listing your home. For more significant repairs or incomplete renovations, or development potential sites, ask your agent about the benefits of completing the work before going to market or providing quotations for completion or planning guidelines, to potential buyers.
74. Don’t make it difficult for agents to get their clients into your home
Within reason, be flexible about allowing access to your home. If the agent can only show the house during a restrictive time frame, they might prefer to show other homes that are easy to get into. Similarly, if you are not willing to allow potential buyers through at times that may be convenient to them, they may overlook your home for one they are able to see in the interim.
75. Ensure your property is compliant
If you don’t have the necessary building and construction permits or consents, you should address this before putting the property on the market. Make sure pool fences meet the council standards. Ensure the water, gas and electrics are in good order.
As of 1 October 2009 it is compulsory that mains powered smoke alarms are installed in residential properties before sale. As of 9 August 2009, the Electricity Regulations 1947 (WA) (Regulations) require sellers of residential properties built after 1 January 2000 to install at least 2 residual current devices (RCD’s) in the premises before the sale is completed. These requirements differ from state to state ask your agent about the law in your area.
76. Choose between multiple offers
The highest offer may not always be the best offer. A good offer with lots of conditions can be cancelled based on any of those conditions. Sometimes it is better to accept a lower offer with fewer conditions.
77. Signing agreements
Carefully consider your circumstances and the conditions of the contract, as once you have signed an Agreement for Sale and Purchase you are legally bound by it and cannot change your mind. It’s also important to have discussed the range in which you would be prepared to accept an offer so that you are able to respond timeously to potential buyers to seal the deal.
78. Give notice to tenants
If your property is rented, be sure to give your tenants adequate notice to make sure they have vacated, and the property can be cleaned and any required maintenance completed in time for settlement.
79. Divide responsibility
There is a lot of work involved in preparing a home for real estate photography and inspection by potential buyers. This is often a challenging time for separated couples who are not able to work well together. It can give rise to numerous opportunity for conflict. It will help if you are able to decide on a clear division of duties. Making lists, documenting the undertakings each of you makes, and setting deadlines will assist.
There are more costs involved than the agent’s commission when you buy and sell real estate. Make sure that both you and your former partner are aware of the total costs as these will impact the net proceeds available to split. Be sure to consider any marketing add-ons, local council, financing and insurance costs you may incur.
Choosing a Real Estate Agent
81. Pick a good fit for you
Real Estate companies and individual agents differ in their area of specialty, their potential buyer database and the way they market a property. Find a real estate company and, more importantly, an agent who is active in the area you need. They should be someone with whom you have a good rapport and feel will act in your best interests.
82. Understand the terms of engagement
Your agent must obtain a written authority to sell your property before charging you a commission. The letter of authority should include terms such as your asking price for the property, the agent’s rate of sales commission, the period the real estate agent will hold the listing and whether some or all of that time will be exclusive. Compare the fee structure of your preferred agents.
83. Ask for referrals
Talk with recent clients of your preferred agent or to people you know in your area who have just bought or sold. Search online for reviews and testimonials from recent buyers and sellers.
84. Are they registered?
Ensure that both the agency and the agent are appropriately registered and licensed.
85. Check their track record
Visit the website, Facebook page and Linkedin pages of both the real estate company and the individual salesperson to determine their sphere of influence in the local area and the industry, whether they have won industry awards and their potential reach to market your property.
86. Current Listings
Look at the agents’ current listings and monitor the turnover of properties. Are you happy with the quality of their agency’s marketing? For example, are the currently listed properties well photographed, are the property descriptions appealing and are they getting good exposure online, in print media and other relevant advertising streams?
87. Attend home opens in the area
Go to home opens in the area and talk to the selling agents to get a feel for whether you would have confidence in their ability to relate to potential buyers and pitch your property effectively to meet the buyer’s needs. Compare the advertisement for the listed property to your impression of the property on display to determine whether the agent is representing the properties in the best light.
88. Listen to your agent
Take the agent’s advice about your asking price as market knowledge is likely to be one of the main reasons you’re using an expert instead of selling the house yourself. It is an emotional time, and you and your ex-partner are both likely to be emotionally invested and attached to your ‘home’, as well as concerned for your financial future. It’s common for at least one party to have unrealistic expectations driven by stress and fear. Turning that decision over to the agent may eliminate one potential conflict.
87. Local market knowledge
How long has the agent been active in the area? Do they live in the local area themselves and could they therefore authentically convince buyers of the advantages of the local area. Ask agents about the properties that have recently been listed nearby to access their knowledge of the local market. They should be able to tell you the main reason that a particular home sold while others have been overlooked and have a clear picture of what a buyer in the area is looking for and how you might improve your home for maximum appeal.
89. Have you used an agent in the past?
If you were satisfied with the agent who worked with you when you bought the house, it’s worth investigating whether that person is available. Even if they have moved to a different real estate agent or out of the local area, they may still be willing to take on the listing.
90. Outsource the decision
If you’re starting from scratch and having trouble agreeing, consider the option of outsourcing the decision to a neutral party such a finance advisor who may have contacts in the industry. Alternatively, each of you could pick a friend or relative and have those two people agree on an agent.
Preparing a Property for Sale
91. Clean! Clean and Clean!
Getting the house ready can be the most difficult part of the sale process however it is critical. There’s often some work that needs to be done before the house is ready to be shown. Even though it is a lot of work every time the property goes on show, it’s imperative to present your property in its best possible condition inside and out.
Clean your home until it sparkles. Remove cobwebs and traces of ant activity. If you are showing your property over several weeks, it may pay to spray with something to save you having to clean up each time. Pay particular attention to wet areas. Remove any mould spots or lime scale and replace sealant if old or stained. Tiles and hardwoods should be thoroughly swept and mopped to a shine. If the grouting is stained, steam cleaning will clean it up well.
Busy rooms look smaller, and less appealing. Especially in photographs. This is definitely a case where less is more! You can use your garage or offsite facilities to store the excess. Remove items you don’t use regularly, especially larger furniture that obscures doorways, windows or walkways or items that don’t suit the purpose of the room such as exercise equipment in the loungeroom. Remember that potential buyers are likely to open closets and kitchen cupboards, so keep them tidy.
93. Eliminate odours
Eradicate the source of any unpleasant smells if possible. If you have pet beds or their favourite indoor mat, remove it from the house. Often as a pet owner, you don’t smell the odour in your own home anywhere near as much as a non-pet lover. If you are a smoker, open the house up long before inspection and make sure ashtrays are out of sight and butts removed. Don’t mask household odours with air fresheners. Put freshly cut flowers inside instead, or fresh baked cookies in the kitchen.
To make your home appeal to the largest possible audience, paint your walls in neutral colours so buyers can project themselves into it. You should aim to leave unimaginative buyers with fewer barriers to envisaging themselves living in the property with their own furniture and belongings. Some folk just can’t get past your personal choice of colour scheme or feature wall.
Do a thorough inspection for any repairs that need doing. This step will help you avoid unpleasant surprises during the sale process. Fix any maintenance problems that you find. Complete any home improvement projects or remove them entirely from view. Do not leave tools or unstable structures around during inspections.
96. Replace damaged flooring
Make sure the carpets have been recently shampooed and treated for stains. Hardwood floors that are scratched or have lost their sheen should be refinished. If this has been unsuccessful, depending on your target market, it may pay to replace the floor coverings. Your real estate agent will be able to advise you as to whether this is a good investment.
97. Create a welcoming entrance
Make your front entrance as inviting as possible. Your front door is the first thing potential buyers will see. So, paint the door if needed, keep decorations minimal and declutter the entrance area as this is often a bottleneck area for people attending home opens. You need to provide as much space as possible for a good first impression.
98. Put out the welcome mat
Buy a new welcome mat to let buyers know they’re invited with a warm, fresh welcome into your home. If it is raining provide an area outside the house to store umbrella. If potential viewers are likely to traipse mud or dirt through the home, consider a mat inside doors to collect the footprints and preserve the appearance for views who arrive later.
99. Stage the interior
Staging is the process of styling and preparing your home to appeal to the widest number of potential buyers. It can be done yourself or by professionals. If you are hiring a professional, they may choose to use your furniture and decoration, bring in their own or use a combination of both. Hire furniture if the property has been left empty or in the separation the furniture has been split and is, therefore, sparse or unsuited to the property. Unless the purpose of the room is a gym, remove exercise equipment. Remove portable fans and heaters which may give the impression there is a temperature issue. Appliances on the benchtops in the kitchen may imply a lack of storage space so ensure they are removed. Tidy up and tuck away electrical cables. Remove dishcloths, tea towels, bath mats and make sure the bath towels are fresh and add to the décor. If they don’t, remove them. Close toilet lids and remove toilet brushes and spare toilet rolls. Remove personal toiletries. Don’t leave tempting personal items such as perfume, jewellery or small electronics on display. Remove remotes and ensure that any valuables are locked away. Pull curtains back. Make sure all globes are working and turn on all the lights. If you are having your home photographed and you have a pool, remove and store the Kreepy Crawly with enough time for the surrounding pavers to have dried before the shoot.
100. Stage the exterior of your home too.
Clear the sidewalks, mow the lawn, paint window trim, plant flowers, trim your bushes and make sure that visitors can see the house number. Invest in a few plants or you could neatly rake or mulch bare garden beds. Trim edges and mow lawns a few days before the viewing or photography date so it has a chance to green up. Consider cutting foliage away from windows to allow more light inside. Ensure pools, ponds and water features are cleaned and fully operational. Ensure that droppings are removed and pets are contained. Do not leave pets at property if you have a ‘home open’. Put bins out of site. Don’t leave your car in the driveway or park directly in front of your property. Remove weeds in driveway and paths by spraying with Roundup 10-14 days beforehand. Degrease and pressure wash the driveway. Put away garden tools, hoses, bikes and children’s toys.
Peter is a licensed real estate agent operating in Perth, Western Australia.
Peter has been operating his own office as Professionals Ultimate for a number of years, selling and managing Millions of dollars’ worth of property.
He has seen the ins and outs of divorce in real estate, from the amicable break-up, to the bitter dispute.
He has been in a unique position as arbiter on numerous occasions, whilst being focussed on getting the best result possible for both parties.
This book is designed to help his future clients achieve a better result from their divorce.
Contact Peter to see how he can help you:
(08) 9330 5277 or 0431 417 345
“Impressed by Peter’s proactive approach to marketing properties, we engaged him to sell our house. From the outset, Peter promised us an honest approach & fought hard to achieve a quick sale and keep our costs down. He gave us great advice & we sold the house before an open inspection. What really set him apart from other agents was his marketing techniques, which gave us the best result possible. We have dealt with other agents in the past, & none come close to Peter’s honesty, professionalism & dedication to get his clients the best results. We recommend Peter without any hesitation & trust you will enjoy his committed worth ethic when you engage him to sell your home.” Kate & Chris
Christine Weston is passionate about helping others to minimise the stress, conflict and cost of separation and divorce.
She is the creator of www.DivorceResource.com.au, designer of The Split Kit (Australia’s first divorce management software program) and author of the invaluable resource book, ‘The First Steps through Separation & Divorce.’
Christine assists couples on a daily basis to not only survive, but thrive through the process of separation.
She is a mother of two young adult sons and lives in Perth, Australia.
Find out more:
The Split Kit
E-book or paperback: Your First Steps through Separation and Divorce
“Both the kit and the book are the best resources clearly and simply explaining the substance and the process in Family Law matters. This is exactly what we are trying to achieve in our consultations – that clients have clear structure and simple guidance through this confusing process. I would highly recommend.” Evgeny Vasilyev, Partner at Morris, Alexander & Nelson, (Barristers and Solicitors)
“I just love, love the checklist you have created, amazing and so, so helpful. It’s the checklist to end all divorce checklists.” – The Divorce Go To Girl, Renee Catt
“I followed the advice and worked through The Split Kit. When I saw a lawyer, she said I was the most organised client she’d ever seen. I’m sure it has saved me a lot of time with her and that means it’s saved me money, possibly several thousand dollars. Thank you so much. Thoroughly recommended.” – Leigh