The Current Housing Market and Divorce
Hi Welcome to ValuationPodcast.com - A podcast and video series about all things related to business and valuation. My name is Melissa Gragg, and I provide online divorce mediation and valuation services in St. Louis Missouri.
Today we will discuss the current housing market and divorce with Melissa Rubenstein – a former real estate attorney and realtor in New York and New Jersey.
1. Tell us about the current housing market.
2. What are the main steps when selling a house (specifically during a divorce)?
3. What advice would you give to a divorcing couple who is selling their house?
4. What is the process for one spouse remaining in the house when the other moves out?
5. What are some current trends for taking out a mortgage? Is the process getting easier or harder?
6. Do you have a checklist clients can go through to prepare them for the selling process?
See transcript below:
Melissa Gragg (00:00):
Hi, welcome to valuation podcast.com, a podcast and video series about all things related to business and valuation. My name is Melissa Greg and I provide online divorce, mediation and valuation services in St. Louis Missouri. Today, we will discuss the current housing market and divorce with Melissa Rubenstein. She is a former real estate attorney and a current realtor in New York and New Jersey, and has a lot of interesting perspectives in real estate where everything's going welcome, Melissa, how are you?
Melissa Rubenstein (00:33):
Thank you. Um, great. Thank you so much for having me.
Melissa Gragg (00:36):
So this is an interesting topic. We were kind of talking about, um, some of the things that were happening just in the context of a divorce that I had recently. And I was kind of talking to you about some of the things that we should consider in the divorce, and you really had some interesting perspective, but I think if we start, you know, in this pandemic, in the post pandemic during the past, even like since 2008, the housing market has gone through these various time periods of struggle and, and, you know, increase and people are excited, but like what's happening right now. And maybe where have we gone in the past two years?
Melissa Rubenstein (01:16):
So the past two years have probably been the most interesting time period in real estate, definitely since 2008 and possibly in the past few decades. Um, prior to the pandemic, 2019, um, we had a pretty normal real estate market. Um, we did have inventory issues, but our rates were steadily at four to 5%. We had a lot of buyers in the market. We had sellers. Um, then of course the pandemic hit and everything changed you. The biggest change we had first was interest rates. Interest rates went down from mid fours to as low as two and a half percent, which changed the face of the real estate market entirely. Um, we had people entering the market who previously couldn't afford to be in the market. Um, we had huge rises in home ownership, even during the pandemic we were in here in New Jersey. We were sidelined probably for about six weeks, but we were considered essential workers.
Melissa Rubenstein (02:25):
So we hit the ground running April to may of 2020. And we saw volume. Like we hadn't seen in years, people were taking advantage of the low interest rates. They were putting on all of their PPE and their masks and going into houses and buying houses. The consequence of a year of that, and extremely low rates were we've eaten up all the inventory. So over the last six months, we've had incredibly low inventory. And even as rates have gone from the lows of two and a half percent to highs around 6%, we are still getting high prices because of this lack of inventory.
Melissa Gragg (03:11):
Well, and I think that it's interesting because it's not only lack of inventory. I think that buyers preferences have changed. You know, like at the beginning of the pandemic, everybody wanted to live like walking distance from places and be in the city and everything. And then when you're kind of locked into your own nucleus, right? I think people, at least in the Midwest started to move out, have more land, like have less neighbors and things like that. Did you see the preferences change?
Melissa Rubenstein (03:45):
We saw the same thing out here. So I'm in the New York city suburbs. Our suburbs are generally commutable to Manhattan. So back in 2019 walkability was the word. Everybody wanted walkability. They wanted a downtown. They didn't care about a big yard because they wanted to walk everywhere. Once people were at home with their children, with their spouse, they wanted more space. They wanted not only land, but a pool used to be a neutral. Some people wanted it. 50% of the people didn't ever want it. Now, especially, let's say over a million dollars for our luxury market, a pool isn't almost must. Everyone wants a pool. Everyone wants land. And the physical features of a house, those preferences changed as well. 2019 open concept was everywhere. People just wanted one open floor plan. They could entertain, they could, you know, enjoy their house like that. Well, once you had often two parents working in a house, then maybe you had two or three kids homeschooling in a house you needed actual rooms in your home. People want a home office, even if they're commuting in two days a week, they still need a home office. And perhaps two home offices for three days a week because their kids may come home from school at three 30 in the afternoon. And they're still on conference calls. So the features of a house have definitely changed. And we're walking that back a little bit. People don't need the mansion anymore. They just want enough space that they can comfortably coexist with every member of their family.
Melissa Gragg (05:29):
Mm-hmm <affirmative>. Well, and have you seen any the other two before we kind of get into how this co this conversation about how the current housing market affects divorce and how it, you know, how it involves it? There's also kind of two different areas that I think affect, you know, this type of population as well is one is, you know, secondary homes sure. Or investment homes, you know, what have you seen in that capacity? Um, cuz it, it could be called vacation homes, but now we're seeing so many of the vacation homes like become these Airbnbs or these condo situations, like sure. What are you seeing in that space?
Melissa Rubenstein (06:06):
Um, well you can almost not get a vacation home anymore. Um, especially on the east coast from Florida to Maine beach homes, lake homes at the beginning of the pandemic, especially people who were apartment dwellers in the city. They grabbed up every single beach house, every single lake house and lived there for a year. And then they went back to the city, but they held onto those investment properties. And now they're either using them themselves or renting them out. Um, Airbnb is something that I'm dealing with a lot actually lately because I've had several of my buyers say that they want to use a property, both for themselves and for Airbnb. And it's something that you really have to work with somebody knowledgeable because each town has different short term rental rules. Many, many areas are, uh, having ordinances against short term rentals under 30 days. So it's something that you really have to research because the last thing you wanna do is buy that investment property, put it up on Airbnb and have the town, the municipality that you're in. Tell you, Nope, you can't do a short term rental mm-hmm
Melissa Gragg (07:17):
<affirmative> well, and in, in to segue a little bit into divorce in the divorce, you know, space, what, what some of the things that we're seeing is these rental homes or really just vacation homes, right. Have been in the family, maybe paid off, right. That one party would say, well, you can go and you can make some income off of this because you can start renting it out. It's gonna pay for itself. But what we've found is, especially in condos or apartments or where there's some structure, even in, um, older neighborhoods, there's indentures and things and TA in your also a real estate attorney, which I think gives a another perspective. Like when somebody's looking at some of these options, you know, they may have to get some additional advice, not just from a realtor, but like this goes a little bit beyond, right?
Melissa Rubenstein (08:10):
If someone's gonna use a home as an investment property, I would always recommend contacting a real estate attorney. Um, somebody who's familiar with land use with ordinances in the specific town, because while a realtor can maybe go through the ordinances or make a phone call, if you're talking about that kind of income, that kind of an investment, or if you're talking about a divorce, dividing up the property, you wanna know exactly what you can do with that property. It's also important to note that with the rise of Airbnb, many municipalities haven't caught up to the ordinances yet. So they're I told the client this the other day, okay, you're looking at one county, you're saying some of the municipalities have short term rental laws. Some of them don't, well, I'm gonna buy in one that doesn't, it may be that they don't because they haven't caught up yet. And their council is going to pass a short term rental law, you know, next week you wanna move into a town. You wanna use a town that has addressed this already. It's been in front of their council, their mayor, they, you know what their short term rental laws are before you consider whether that's an income producing property.
Melissa Gragg (09:22):
Well, and just like the ordinances are taking time to get started. You know, we've seen, I think we even talked about like on one of our pre-calls in Branson, Missouri, which is like this little sleepy town of like fun and chaos, right. A family kind of vacation town. They're starting to build these smaller. And I was there recently and even saw it like these smaller houses, like not tiny homes, but definitely like geared towards this, this market of owning a property, wanting to be there some weeks or a month or so out of the year, but then renting it and kind of having it pay for itself. So I feel like as we go forward, there's gonna be way more management companies and even neighborhoods that are created based on this concept, especially in like tourist towns, right?
Melissa Rubenstein (10:13):
Yeah, absolutely. Um, people, this is what people want now. They want their home, but they also want a second home, a vacation home and something that's income producing.
Melissa Gragg (10:23):
Yeah. Yeah. And I think in, in that kind of capacity, what we're starting to see is people are having these houses, you know, and these traditional kind of, even like you're talking about, you know, bigger houses than we had in the past, um, maybe some additional houses, um, or, or rental real estate. And they get to this place where they might get divorced. And we're dealing with this a lot in that, trying to understand who stays in the house, uh, do they need to sell the house and things like that. But initially when people are kind of considering this, because they need to probably downscale, like you've said, preferences have changed. Houses are kind of a lot bigger than are necessary right now. What are the main steps that you see in selling a house or talking, just even starting to talk about this when you have a divorce involved.
Melissa Rubenstein (11:19):
Sure. And I, I do a lot in the divorce space and I, I love when a client comes to me before they get to mediation, even before they decide that they wanna get divorced. And talk to me about the process. Um, because the first thing you wanna understand is of course, what your house is worth in the current market. That's a big question. And so many Devor, great divorce attorneys. I talk to clients, I talk to what do they do? They go online and they go to, to Zillow. Okay. That's <laugh> Zillow uses and it's not, it's not a bad thing. It's a starting point. Zillow uses tax data. They use what they see as comparable sales in their algorithm. What they don't know is what the interior of your home looks like. Um, they don't know if you renovated your kitchen and didn't need to pull permits because it was only a, a cosmetic renovation and your taxes didn't go up.
Melissa Rubenstein (12:24):
They don't know if you renovated your bathroom, put new hardwood floors in painted, put a new roof on there's so many factors that Zillow doesn't know. Um, what's also interesting about this market in terms of valuation is so obviously through most of the country, we had this 20, 25% on average bump in home valuation between 2019 and 2021 and this year as well. So when we are looking at comps, we look at six months of comparable sales. We are looking at some very high comparables right now. Mm-hmm <affirmative> as the market, as the interest rates have gone up, everyone who reads the news is seeing valuation is slowly going down in a lot of markets in some markets, New York city market, it's holding tight, but in a lot of markets, it's starting to go down. So that six months of comparables is not gonna tell you the whole story.
Melissa Rubenstein (13:27):
In some instances, it's about talking to a realtor who is actually in the field every week. What did I see at my open house last weekend? That's my current as current data, as I can find, that's not based on closed sales. And you have to remember also closed sales are a 60 day lag usually. So our prices that we're seeing is recorded prices. Those went under contract two months ago. We've had interest rate rises since then. So I wanna talk about what I'm seeing on the ground in addition to the data. So the very first thing we're gonna talk about is what we think your home is worth today. In real time, we're also gonna talk about what's your mortgage. Do you know what your mortgage payment is? Do you know which bank holds the mortgage mortgage companies sell their loans often? And so the mortgage company that you signed papers for likely doesn't hold your loan anymore.
Melissa Rubenstein (14:27):
What's the login on your bank account for your mortgage? You should know that many people don't. Has there been a second mortgage? Has there been a home equity line taken out? Has anyone drawn down on the home equity line? These are all questions that I want my clients to research and know the answers for before they decide going into mediation or court, whether they think they wanna sell their home. It's important to get a complete picture of your house because often it's such an emotional connection. You're talking about an emotional asset. It's not a car. It's not even an investment property. This is maybe where your kids go to school, where you brought home your baby from the hospital, you bring in a professional to take the emotion out of it a little bit and get you the most prepared for your mediation.
Melissa Gragg (15:21):
Now, does everything still hold true that you need to, um, you know, have everything updated, have like an immaculate house? Because I feel like during some parts of the pandemic, probably towards the beginning, it was like, you could basically put a straw house, um, up and sell it for a million dollars because it was just like, everything was going. It, it didn't matter if it was falling apart or not. Do you think the market has changed a bit there?
Melissa Rubenstein (15:51):
That's where things have changed a lot. I mean, everybody saw the meme on the internet about the kids' Playhouse that, you know, someone was selling for a million dollars. It was true at the height of 20 21, 20 22. You were putting anything on the market and someone was buying it. Mm-hmm <affirmative> once interest rate starting to go, started to go up once you could no longer get a two and a half, 3% interest rate. And instead you're looking at five or 6% that didn't hold true anymore. Because when your monthly payment is 600, a thousand dollars more, there isn't that money for renovations. So my buyers, especially my millennial buyers, they want something that's Instagram ready. They want something with an updated kitchen, updated bath, um, all the bells of whistles. Now you're not going to update your kitchen and update your bath to sell your house. But there are things that you can do to gear your home sale and a, especially the photography that you're putting online towards those millennial buyers, um, a fresh coat of paint in the house, possibly redoing some flooring. And when I stage a home it's minimalist, it's, you know, everything that you see on HGTV, you're taking most of it out. You're putting some staging in, um, they don't wanna see your 45 years of cheki in the house. They wanna see something clean and neutral that they can picture themselves in.
Melissa Gragg (17:27):
Well, and I think that the interesting, when we were talking about this, um, piggybacking upon kind of like a realtor will come in and look at the, the outside of the house, you know, the specs of the house and, uh, where it's located and comps and all of this. But you actually have some really, really good advice, um, for a divorcing couple who is considering selling their house. And it has to do with a little pre-planning, but give them the advice that I just thought was amazing. <laugh> um, and
Melissa Rubenstein (18:00):
We, yeah, my biggest piece of advice to divorcing couples, but probably anyone selling a home is to do a pre-inspection a pre-inspection is the same as an inspection that a buyer would do. And you bring in your inspector it's can range from a few hundred dollars up to maybe a thousand dollars, depending on what you want them to look for. And they are going to give you probably a 40 page report on everything going on in your home. I think it's hard to properly value a home unless, you know, what's going on inside the walls. Um, a realtor's gonna go through, they're gonna see your number of bedrooms, number of baths, cosmetics, you know, the neighborhood, the everything like that. What we can't see is are there structural issues? Are there termites, mold, um, things, is there an issue with your furnace or your boiler?
Melissa Rubenstein (18:59):
Um, these are things that are gonna have to be negotiated down the line and it could take a home that's worth 550,000. And by the time you're negotiating these credits, it could be worth 500,000. And I can tell you that the most nail biting part of a home sale is when the inspector is done and they they're pretty quiet during the inspection and cuz they don't wanna alarm anybody and they don't wanna give too much away. Then you get that 40 page inspection report and the buyer who this maybe is their first home and they think it's perfect. And they now have to see all the flaws in the home, the seller who thinks their house, you know, they haven't accepted offer for $600,000 and oh my gosh, there's mold, there's termite damage. There are things that can be remediated, but they're going to cost money.
Melissa Rubenstein (19:53):
What a pre-inspection does is it lays out all the flaws. It says, okay, these are the things that are gonna have to be fixed. Maybe fixed, not necessarily fixed. You can bring that into your mediation and you and the other divorcing party can go through that list and say, okay, not only are we gonna address some of the cosmetics, these are the things that we're gonna address before we get the house on the market so that we are smooth sailing. We're not gonna lose our buyer. We're not gonna get hit with surprises because as you know, in a divorce mediation or trial surprises are the worst thing. They're the last thing that we want and in a home sale as well, we don't want surprises.
Melissa Gragg (20:38):
Well, and the reason why I think it's brilliant and, and I used it recently in a very similar situation is that the parties may agree conceptually to sell the house. Like they may understand that they can't afford it or whatever the situation is, but then there's these outstanding, like, you know, the something, and I'll give an example. Even when we purchased a house, you know, they check the box that the fireplace was working well. Um, they weren't, it was a $40,000 issue if they had known about it, right. If they had done the pre-inspection, they could have easily said, Hey, yes, there's an issue with the fireplace. It's 40,000. We're not doing anything about it. Exactly. But you already know. Right, right. You know the amount and you, you actually place a bid on the house knowing the full information, which I think is amazing.
Melissa Rubenstein (21:29):
Right. And you could maybe it's something cosmetic. Maybe there are cracks in the stones, in the patio from settling and you say, or the driveway and, you know, to say in your listing, this is as, is, we're not even entertaining a credit. Um, but then there are the things, you know, there may be something that really needs to be addressed and you can negotiate that among yourselves, in mediation, before you ever get to a buyer, because the negotiation between two divorcing spouses plus a buyer gets very complicated and not only complicated time consuming, um, right. There's no better way to give away that you're getting a divorce in a real estate situation than to take a week or two weeks to respond to inspection negotiations.
Melissa Gragg (22:22):
Right. Well, and I think it also, you know, like in the situation, if we have a deck falling off the house and we have a roof problem and we have a chimney problem, but we only have $20,000 or $50,000 to fix it. I think that what would happen in the past is we try to decide if we're gonna send, sell the house and nobody can like nobody can. So we just sit and do nothing. Whereas this, I think that pre-inspection kind of at least provides a, a roadmap of saying, okay, here are the three things that need to be fixed. Can we agree to fix one of them? Where is the money coming from? Because it's joint money. And if we're in the process of a divorce, everybody's like, is it my money? Is it your money? Who's money? Is it well, it's, it's the family pot of money. And the discussion is really putting that money in to get the equity out. So it really is something that I think gets them talking as well as, oh, that crack in that rock is not structural. It is just a cosmetic and, and will fix it. You know, those types of things, it's like clear knowledge about the situation that most people go in blind. Like why aren't EV why isn't everybody doing this? They check the municipality to see if there's inspections, but like why, why is it just the cost? Do they not think about
Melissa Rubenstein (23:45):
It's money? I, I really do think it's, I, I think it's two things. I think it's money. I think it's, you know, well, who's gonna pay the $800, you know, especially in a contentious divorce, you know, you're talking about before you even put the house on the market, you're saying, okay, well we need to spend $800. That's a fight in its up in and of itself. I think the other part of it is like, what? You don't know, won't hurt you. Mm-hmm <affirmative> and people are a little scared to see what's going on with their house. And I think maybe they go into it saying, well, maybe what if, you know, I hire a great inspector and he catches all these things. Well, what if the buyer's inspector doesn't catch all these things then are we doing unnecessary repairs? So there there's all these questions, right. That people have. And it, you know, it can open up a can of worms, but chances are. And I always tell people this, especially when they find issues on inspection, fix it for the first buyer, because your second and you're second, and your third buyer, and I've had this happen with structural issues. They are all gonna find the same exact thing. And you are just gonna keep going through buyers. And as interest rates go up, the buyers are fewer and further between. So you need that first great offer. So make it work
Melissa Gragg (25:05):
Right. And you, and then you're not offering, you know, like they're not offering based on these unknowns that, you know, you're gonna have to retrade, you know, you're gonna have to renegotiate,
Melissa Rubenstein (25:15):
Right. And that's generally what we have to do. You know, we, we walk into a basement and nine out of 10 buyers are commenting. Does it seem dry? Does it seem
Melissa Gragg (25:28):
There was
Melissa Rubenstein (25:29):
Moisture in the basement? Is there a smell? Well, if you have a pre-inspection report that you can hand somebody, you can say, listen, there's no moisture in the basement. We've had it. They have those little guns that they put on the wall and they can test for moisture. You can say, there's no moisture in the basement. It's completely dry mm-hmm <affirmative>. So there are a lot of things that you can give people comfort on. If you have that pre-inspection
Melissa Gragg (25:53):
And to speed up the sale process in some capacity now. Absolutely. Now what if we have a situation where one spouse might stay in the house, another spouse moves out, which we have, and you can have all sorts of, you know, one's gonna keep it. But a lot of times you have one maybe staying in while we're selling and one, and sometimes that person isn't totally on board with sell, you know, like, so
Melissa Rubenstein (26:19):
I definitely had that situation, um, that one of the biggest obstacles in selling a home and divorce is access to the home mm-hmm <affirmative>. So sometimes you have a situation where the court is ordering a sale. They've agreed to a sale, but one spouse is just not thrilled about it. So they may be restricting access, um, not allowing showings or not cleaning the house, not keeping the show ready so that maybe they can force the price down. Attorneys will address this, but it's important for both parties to be on board with access. Um, because if you don't have that, you are, the price of the house is gonna go down. If it's not show ready and accessible, it's gonna be hard to get that top dollar.
Melissa Gragg (27:13):
And, and in those types of divorces, a lot of times we're seeing the spouse that stays with the kids are going to stay at the house. And that doesn't really always make it conducive for like quick showings. Um, you know, so are you seeing a lot of people like moving outta the house and keeping the house just show ready because the market's moving so quickly or is that still,
Melissa Rubenstein (27:40):
There's just a
Melissa Gragg (27:40):
Hard piece of the process.
Melissa Rubenstein (27:42):
Every situation is out there. I am seeing people when they're not keeping the house moving out of the house because it is, it's very difficult to show a house for more than one weekend, two weekends. When you have children in the house at the height of the market, 21, 22, I would have people go away on vacation for a week or even a weekend, show the house, get my offers and be done with it. Mm-hmm <affirmative>, that's not today. That was a two and a half interest rate market. Now at a 6% market, it may take 60 days to sell a house, which is very normal. But with children in the mix, especially in a divorce, my number one goal is to be sensitive to the clients, the family, the children, and maybe we're not putting a sign out front. Maybe we're not, you know, staging the house to that extent because we have children who are going through their own traumatic experience and selling the home should not be a trauma on top of that. So there's a lot of sensitivity that goes on when you have people still living in the house, especially children
Melissa Gragg (28:51):
Now in that type of situation, are you going back to them and saying, you know what, um, if we're gonna do certain things, like that's gonna affect your price, you know, like, are you kind of giving them like, this is how you get your best price. This is the next price. And the next, I mean, is that where the market is? Or what do you think
Melissa Rubenstein (29:10):
It's a conversation and it's a back and forth, and it's what people are comfortable with. I often don't bring in a whole lot of staging materials when they're young children in the house, because I know my children are hard on everything and I would never want someone else's items in my house. <laugh> um, so it, it, there are a range of staging services, a range of things you can do to your house. Painting is the number one thing that everyone should do. It's the least expensive. And the biggest bang for your buck. Um, you may love your red dining room. Most people are not going to love your red dining room. So paint it a neutral gray color, something that will appeal to everyone. Um, mm-hmm <affirmative> so that's, that's my first thing that I would tell people to do is always painting. Um, after that, it depends who's living in the house. It depends, you know, if you're moving out, maybe we're staging the bedroom, the living room and the dining room so that we can get those great photos. Um, and maybe we're virtually staging there. There's so many different things we can do now with technology. And so every situation is unique.
Melissa Gragg (30:24):
Are you seeing anybody really still selling on their own thinking that the market is just so fabulous that they can do it themselves? <laugh>
Melissa Rubenstein (30:33):
Very, very few. Yeah. Even at the height of the market, I think 90 plus percentage of sellers, we're using a real estate agent, um, there is so much that a realtor does that most of the general public does don't even know that we do from the pricing, the staging, the who we're allowing in your home. Um, as a homeowner myself, I wouldn't necessarily want to decide who can enter my home. I, I want an agent who's requiring a preapproval or proof of funds, someone who is looking out for my home in a way that I probably wouldn't know how to do. And then once you receive offers, it's vetting the offers, deciding which is the best offer, regardless of price, sometimes price dictates. And sometimes it doesn't do they have a mortgage? What percentage are they putting down? How quickly can they close? Um, those are all things. And then getting through, we've talked about the inspection process, getting through the inspection process is a huge thing that you need a realtor for. So there's just so many things from pricing to closing that we do that I think are of such value to the public. And now with high interest rates, rising prices possible recession looming. I don't see how someone could do a sale on their own and get the top dollar.
Melissa Gragg (32:01):
Well, and even just considering some of these things, how quickly it moves this, the, the privacy and security of having like the lockbox. And, you know, I know there's a whole system that if you go to show in a house, like it's all record, you know, like everybody knows, but you also talked a little bit about, you know, the interest rates, because I know that they have changed. And I know, um, you know, the re one of the reasons why we wanted to purchase was because of the two and a half percent interest rate at the time, but what are some of the current trends for taking out a mortgage? And is the process getting easier, harder? You know, what do you see, um, happening?
Melissa Rubenstein (32:39):
Well, the first thing I have to do with interest rates is, and of course I work a lot of times I'll work with a certified divorce lending professional. Okay. And there are lenders who are specifically trained in divorce, and that's something having gone through a divorce myself and purchasing my home. Um, that is something that's crucial that if you're going to take out a mortgage in a divorce situation, if you're gonna buy your house from your spouse, contact someone who's certified in divorce lending. Okay. Um, right now it's so interesting because I've had clients that I've worked with for a long time who are not checking rates as often as I am, which is pretty much every day who are thinking, going into this thinking, oh, it's still four, four and a half percent. I can manage it. And I'm telling them, well, wait, Matt at 6% and we have to redo your debt to income ratio.
Melissa Rubenstein (33:35):
And do you qualify for the same price that you did when they were 4%? The answer is probably no you're qual. You're probably qualified to purchase a less expensive property. So we need to retool your search based on current interest rates. Um, refinances have pretty much halted. I think they're down about 83% because most people who have, who wanted to refi did it when it was two and a half, 3%. Um, so it's, it's a challenging rate environment. Um, and the fed is doing this on purpose to tamp down on inflation, but we are left with those challenges.
Melissa Gragg (34:18):
Mm-hmm <affirmative> well, and I think that, you know, I think everybody thought that we would have lower interest rates for a lot longer. And, you know, do you think that's creating a little bit of a panic on the market or are people now going back to I'll buy it? Because I don't know what, I don't know if I'll find anything else or
Melissa Rubenstein (34:39):
I wouldn't say it's creating a panic, it's creating a headache. Hmm. People are saying, Ugh, okay. I need to buy a house because the flip side of this is rents are going up faster than interest rates. Um, you see people who rented apartments during 2020, their landlords are now turning around and raising rents 30 to 50%. I've seen I, a woman locally told me that she was paying 2,400. Her landlord now wants $3,800 a month. So people have to purchase houses. I'm seeing people who are maybe looking in one town, looking in another town. Um, they're just trying to find their affordability comfort zone. Mm-hmm <affirmative> so it's not scaring people away from the market. It's just altering their search.
Melissa Gragg (35:33):
Okay. That's a good point. And a couple other things. And then, um, I think this has been like so helpful, but do you have like checklists and things that a client can go through when they're trying to prepare for this selling process? Because I feel like everybody who I hear that talks about it, they're just like, you know, do the paint in carpet, but you know, what else, what are really, you know, back whenever I bought my house, the white kitchens weren't in and now white kitchens are in, you know, like, do you kind of have something to go through of how to get your house more modernized and, and ready?
Melissa Rubenstein (36:09):
Sure. And it's, it's each individual house is different and each neighborhood is different. And, but yes, I would say I go through a house for first, first cut. You know, we decide where we wanna price. We, and then we're kind of gonna go through that checklist. And a lot of it's gonna depend, what is your budget for renovations? If you have $5,000, let's do paint. Maybe we'll fix up some flooring. Maybe we'll get some new hardware for the kitchen. That's an easy update to modernize your home. Maybe we'll, you know, do some updates in the bathroom. Is there a new vanity that we can put in? I've seen this a lot. You leave the old tile, get a new vanity, a mirror can be something that's modern lighting. So we're gonna see where we can get the most bang for our buck in terms of very light renovations.
Melissa Gragg (37:08):
Okay. So it's really kind of based on their budget. And then in, in some capacity you're coming in, and this is some information about you, but tell us a little bit more about you, because I think it was interesting about, you know, the certified divorce lender and things like that. I really didn't know that those resources, um, you know, were available and things like that. But, but tell us a little bit more about what your focus is right now and how you can help people in this process as well.
Melissa Rubenstein (37:39):
Sure. And as, as we mentioned, um, I'm a real estate attorney by background. I started out doing structured finance, commercial purchases and, and sales, um, and CMBS lending. I did that until 2008 when the whole CMBS market crashed. Um, and then I, I got into sales because I loved real estate, but I really, I was working at large firms and I wanted to be on the ground with my clients, uh, navigating their process, advocating for them, negotiating on their behalf. So that's how I came into sales and I've been doing it since 2009. And I love it. And in the past few years is when I've really built my divorce practice. And I have a passion for it. I wanna help people through the process because often they're going in not necessarily wanting to sell their house, not knowing how to navigate the process. And I wanna be the voice that can help them and make it as seamless and easy as possible. Um, there's a lot of contention often in divorce and whether you're going through mediation or going to court, I wanna be that even voice who can tell you that we're going to get through the process, these are the steps to get through the process and you're going to be okay. And we're gonna find not only sell your house, we're gonna find you your landing spot and get you to that next chapter of your life and it's going to be okay. So that's where I kind of have this passion for helping people in divorce.
Melissa Gragg (39:15):
Well, and I think it's, you know, it's interesting because E even your best tip and, and talking about these pre-inspection, these are really, really simple things that help the entire communication process, right. They help, you know, like we're already kind of in this contentious situation, but they allow us to have conversations to move it forward. You know, like in, in a lot of these cases, we can't just ignore the fact that we have a multimillion dollar home and neither one of us can afford it, or we need to really, a lot of times it can be afforded, right. But we need to take that million dollar home and maybe bring it down to two, $500,000 homes that, that are, are better for the next phase of this relationship, this family unit that is in now two locations. Right. And I think that when we get beyond, oh, we're selling our family home, it's really like, okay, how can we do this? When we have trouble communicating, oh, we need to fix these things. Let's develop a budget. It's, it's like preplanning in my mind. That makes a lot of sense.
Melissa Rubenstein (40:24):
Right? And it's, as you said, it tends to be people who are not on the same page. And my job is to get people on the same page of selling their home mm-hmm <affirmative> and bring as much information as I can to the table so that we're having productive conversations so that we're leaving a conversation saying, okay, we have a checklist of five things. We need to be doing 10 things, 15 things to get our home ready to for sale. And once we're on the market, this is how it's gonna work and even planning for, okay, we're not sold at this price point. How are we gonna plan for price reductions? If that's what the, their direction the market is going? Are we gonna talk every week? Are we gonna, you know, I don't want my client saying I just had a client who three days in, we had a ton of showings.
Melissa Rubenstein (41:17):
And she said, I'm getting nervous about my house sale. I don't want my clients to be nervous. I want them to expect what's gonna happen. And it, as we said before, we are so used to the market where you throw anything on the market, 48 hours later, you have multiple offers. Well, that's not a normal real estate market, right? A normal real estate market is it could take 30 to 60 days to sell a home because you're working, looking for the right person. Maybe the right person was at the football game on Sunday, and didn't come to the open house. You gotta give them a second chance. You have to give them a week, two weeks, three weeks to be able to see the house. So I wanna be upfront with my sellers and tell them what to expect from the current market.
Melissa Gragg (41:58):
But even then, like these conversations, having them had upfront, especially when you're not having great communications, it's like, okay, when I tell you, we need to have a price decrease, it could take you two weeks to have the conversation with them, right. If they're not talking, or if they're not, I mean, in some cases, they're not even allowed to communicate to, with each other, right. During some time period. So I think that all of that is really helpful for them to, to go through the scenarios in advance. There's gonna be a scenario.
Melissa Rubenstein (42:30):
I want both parties to feel like they are part of the process. And part of the discussion. Sometimes I'm speaking to two lawyers, sometimes I'm speaking to two divorcing parties, and sometimes they've chosen one person to be the point person in the sale. But I do wanna make sure that everybody's getting all the information so that there are no surprises when an offer comes at a little low or when we get the inspection report.
Melissa Gragg (42:57):
Well, and the, but the reality is right now, there's gonna be surprises because we can't even, we know that the last six months is not gonna repeat, but we really don't know in six months and a lot of divorces. I mean, people might not wanna know this, but they, they could take a year. It could take two years. I mean, I just finished a divorce that started, uh, before the pandemic. So it's been three years. So when you have at least six to 12 months of, of the divorce, things can change. And that's why you need to have some of these triggers in place. If this happens, what are we doing next? What are we doing next? Because right. We know it's gonna be unknown, but we can at least plan for some of these, uh, possibilities. Right.
Melissa Rubenstein (43:44):
Right. Exactly. So that conversation up front and throughout is incredibly important.
Melissa Gragg (43:49):
Yeah, absolutely. Well, this has been such a joy. I think you've given us a great perspective. We might, uh, have you come back to talk about like investment properties and all of that, cuz there's so many different realms, but would really
Melissa Rubenstein (44:02):
Appreciate that would be awesome. And it's a whole, totally different conversation. <laugh> I
Melissa Gragg (44:06):
Know. Right. But if people have questions about real estate and divorce, they can reach out to you and we've provided your information. Um,
Melissa Rubenstein (44:15):
And I'm, I'm happy to talk to anyone about real estate anytime. It's what I love doing.
Melissa Gragg (44:19):
That's awesome. Well, thanks so much, Melissa.
Melissa Rubenstein (44:22):
Thank you.
