20 Nov Property settlement in divorce – Miriam Sandkuhler
I was staggered to learn that there are 46,000 divorces a year in Australia but then I found out its about 300,000 in the UK and over 800,000 a year in the US. That is a lot of property settlement. Miriam Sandkuhler discusses the complexities of divesting assets under pressure.
Kevin: As it was pointed out to me the other day, there are 46,000 divorces in Australia, many more than I thought, and it raises an interesting question about the challenges in going through a separation. What do you do with property? How do you split it up? What do you do after it? Miriam Sandkuhler is the CEO and buyer’s agent of Property Mavens, who’s already written a number of books as well. She’s been in our show and has had to deal with this on a professional level. She joins me to talk about it. Hi Miriam. How you doing?
Miriam: I’m good, thank you. Kevin.
Kevin: Yeah. Miriam as a CEO and a buyer’s agent of Property Mavens as I said, you’ve had to deal with this on a number of, where do you see people go wrong with this? How can it come unstuck?
Miriam: Kevin, it’s very complex. As you’ve said, on average 46,000 divorces granted per annum, which roughly results in 92,000 people needing to sort out where they’re going to live. Certainly some of the challenges that separating couples face divesting of property can be really complex. They can be highly emotional, which can affect their ability to make the decisions. If there’s mistrust or conflict or even violence in a relationship, it can mean that it’s really hard to make decisions to get an outcome.
Miriam: I often see imbalance in financial resources, in financial knowledge, so it might mean that one party needs more explaining around how a deal’s going to look or why it might be a potentially good offer to accept. And then, they can often have an inability on how to proceed, which agent to I go with, how do they set a reserve. If each of them has got well meaning third party friends or family throwing their two cents worth in, well that can derail it. So really, often they just need to be able to get some independent advice. Otherwise, that inability to agree means people just can’t move forward with their lives and have a fresh start.
Kevin: Yeah. I think you’ve made some really good points there too. And the other thing is also with agents, I mean sometimes it’s difficult enough to negotiate a sale when you’re certainly representing the seller, but you’re also acting on behalf of the buyer. Then you throw another scenario in which is where you’ve got two sellers who are probably in conflict, then you’ve got a buyer as well. It stands to reason that seller’s advocacy and buyer’s agent really would come home in this sort of situation, Miriam.
Miriam: Absolutely. So I do work as a vendor advocate in that situation that you’ve described and when I’m dealing with separating couples, we act as the independent party that works on both their behalf. We navigate that fine line between them and educate both of them and get their agreement on how things will move forward. We bring to them two or three really good agents that we would recommend that they consider working with and explain our recommendations and why.
Miriam: And then in the background, we help manage that process till it gets to sale, auction, whatever the case may be. And we give them each advice in terms of consideration for offers that are presented, and why they may want to consider an offer or why they may not, what the market’s doing at the time, what the agent’s feedback is. So we very much work with the selling agent, but we’re the ones liaising with the individual clients and we have their agreement and their understanding that we work for them, but we need them to ultimately be able to make informed decisions. Again to be able to move forward and get some good outcome.
Kevin: Almost got to be like a marriage counsellor, but I suppose you can’t be that, can you?
Miriam: Well you can’t counsel, but when you are dealing with people who are emotional and I’ve had this experience before where one party has been willing to take our advice and the other party’s been incredibly emotional. You can only do the best you can to continually try to bring them back to that point of take the emotion out of it. You can only educate them why it is a good offer.
Miriam: And look at the end of the day, it’s their prerogative to not take your advice. In one instance that happened and a client, well the other party said yes, this particular client didn’t agree to an offer before auction because she was expecting more and she wasn’t accepting that the market was softening, and that property went to auction, it passed in and then a week later she got $100,000 less than if she had have taken the offer we presented before the auction.
Miriam: So you can only do the best you can in those circumstances. Yes, you do need skill sets and you need really good communication and negotiation skill sets and to be fair, not every selling agent is capable of dealing with it. Particularly if they’re young, they’ve never experienced divorce before or a relationship breakup. So sometimes being older, wiser or having already gone through the wringer is really good experience to be able to bring to the table, and go yes, I can empathise with you. I know what you’re going through. Been there, done that, but let’s come back to what we need to achieve and move forward on that basis.
Kevin: Because the sale is one thing, then you get settlement. What do you do after the settlement?
Miriam: Well, this is exactly right. So it depends on everyone’s individual situation. Do they have kids, do they not have kids? How old are the kids? Where do the kids need to go to school? How long before the kids move out of home? Because in reality each party will often end up with half of what they had before.
Miriam: Men are pretty pragmatic, they do tend to like to move on fairly quickly and buy another property. But sometimes that can be ill-considered if they’re not really thinking carefully about who they need to accommodate. I’ve known men to buy two bedroom apartments, but they’ve got two kids that are with them half the time and that doesn’t work for the kids.
Miriam: And conversely, women get a bit frightened because if they haven’t looked after the finances in a relationship and they’ve never bought a property before, they can get a bit stuck, do nothing out of fear or think they can’t do anything, which means they’ve got money wasting away in the bank, when absolutely at a minimum, they could get a really good investment grade property and at least have their money working for them in the market.
Miriam: So, there is a lot to consider. There’s a lot to consider from a future perspective and sometimes it’s best to just maybe rent for 12 months, then put in a plan for the next five to 15 years. Renting will take some pressure off. Renting will take some of the emotion out of it, but absolutely seek independent advice from a licenced buyer’s agent to help you work out a plan on how to move forward and still make sure you’re making a good decision when it comes to re-entering the market. Because it may be the only time you’ve got the ability to buy back in and you’ll want to make a smart decision and buy property that’s not going to be compromised in any way.
Kevin: Really good advice. Miriam Sandkuhler is the CEO and buyer’s agent of Property Mavens. You’ve written a book too called Property Prosperity. How is that going?
Miriam: Yeah, it’s going really well. It’s a book that really, regardless of your age or your experience in the market, it’s got some really good tips in there, particularly things about understanding risk profiles and strategies and buying the right property for you, but look, I do take a financial planning approach to direct property investing. It’s got a whole lot of steps in there designed to maximise return and minimise risk and make sure that you’re buying investment grade property that you can hold for the long term that’s going to create wealth for you.
Kevin: Yeah. Congratulations. It’s a great book, a really good read. I’ve got it here and recommend you get it as well. Miriam Sandkuhler from Property Mavens, thank you so much again for your time and your wise words.
Miriam: Thanks, Kevin. Appreciate it.