The Three Ds of Real Estate in the Suburbs

The Three Ds of Real Estate in the Suburbs

There are many reasons people sell their homes. When you have a growing family or decide it’s time to upgrade your lifestyle, you may start looking for a larger house. Conversely, it may be time to downsize as you near retirement. Others get into real estate purely for investment opportunities.

However, the reasons aren’t always happy ones. And, these hardships can make transferring the title more complicated. If you hear someone refer to the three Ds of real estate in the suburbs, they are probably referring to unfortunate circumstances that cause someone to sell a property. Obviously, there are many reasons people sell their homes, but they usually fall under one of these categories.

The Three Ds of Real Estate in the Suburbs

No one wants to deal with the hardships that lead you to sell your home. However, major transitions in life present new opportunities as well as the need to make important decisions.

1. Death

It’s never easy to lose a loved one. It’s even harder to make difficult financial decisions when dealing with emotional turmoil. However, it doesn’t change the fact that someone has to make decisions to settle the estate. Unfortunately, a highly stressful and emotional situation can worsen when people don’t agree on how to proceed.

Dealing with valuable assets, such as real estate, can be a cumbersome and complex process for the beneficiaries. And, the more beneficiaries there are, the more convoluted it becomes. Oftentimes, families choose to sell the property after their loved ones pass. Some prefer not to move in because they have their own homes or don’t have the financial resources to maintain the property. Others simply don’t want the hassle of finding renters or the added expense of property taxes, mortgage payments, and homeowners insurance.

Settling someone’s affairs after death is much easier when there is a will in place and your loved one’s final wishes are very clear. It can provide a guide through the grief. Moreover, it removes the responsibility of making decisions and the likelihood of infighting among family members.

It takes time to settle the estate. So if you are the buyer, it will be cleaner to wait until the probate is complete. It’s better to protect your investment and guarantee the seller has the authority to complete the sale. Once the title passes to the personal representative who is handling the estate, you can move forward with the sale. While it may take longer, it makes for a smoother process with fewer complications.

2. Divorce

With half of all marriages ending in divorce, there’s a reason it’s included in the three Ds of real estate in the suburbs. Following a divorce, it may not be possible to maintain the property on a single income. Other couples simply want a fresh start. So if one party doesn’t take possession of the property, most people choose to sell and split the profit.

According to most lawyers and those who have dealt with divorce, it’s best to make a clean break and move on. Legal advisors will tell you not to attempt to share the asset, even if the divorce is amicable.

Additionally, it’s best to leave the emotion out of it so you come to a faster and easier resolution. Letting your anger or resentment get the better of you will drive up your legal fees, drag out a difficult process, and undermine your profit margin on the sale.

From a buyer’s perspective, divorce presents the opportunity to make a good investment, especially if the owners are motivated to sell.

3. Debt

The last of the three Ds of real estate in the suburbs is something we have all faced. At some point in your life, you will likely find yourself in debt. This may come in the form of student loans to pay for school, a mortgage on a home, or high-interest credit card debt.

Sadly, some people never seem to find their way out from under it. When it becomes too overwhelming, sometimes the only solution is to sell your home. People tap into their equity to help pay down their debts and reduce their monthly expenses.

If you try to sell your home, any debts associated with the property will come to light during probate. The title search will reveal liens from the IRS, creditors, mortgage companies, or child support agencies. All these debts must be paid off before you can go through with the sale. Otherwise, you will face another D for default.

Those who owe more than the value of their property will likely have their home go into foreclosure. In this case, the bank or lender takes possession of the property, then sells it to recoup some of the money. Many times, properties sell well below their assessed value. While this is great for buyers, it usually only covers a portion of the total debt.

Navigating Difficult Financial Decisions

No matter how hard you try, things don’t always work out the way you plan. The key is understanding that some things are beyond your control. People die, marriages end, and economic situations change. However, just because you suffer a setback doesn’t mean you are unsuccessful or a bad person. If you have reached one of these difficult crossroads, the only way out is through.

Those looking to buy property will also have a considerable amount of red tape during the process. While I can only speak from my perspective, I prefer expert advice to help navigate stressful financial decisions that will affect my future.

Although painful, these experiences offer us wisdom and opportunities to grow. Unfortunately, the lesson doesn’t always come before the decision. Therefore, it’s always best to seek out advice when you need guidance. Your financial advisor can help you navigate these difficult decisions, no matter which of the three Ds of real estate in the suburbs you are facing.

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