Divorce & Real Estate Property Sales in Twin Cities, MN: Embracing an 'As Is' Approach

Navigating a divorce can be challenging for both parties involved, particularly when reaching an agreement becomes a significant hurdle in contested cases. The process, similar to an act of Congress, can extend to various aspects, including the listing of the marital home.

After a comprehensive series of negotiations or discussions, both parties may mutually agree to list the house on the market. However, both spouses may choose not to undertake any required repairs, expressing the intention to sell the house in its current 'as-is' state, as stipulated in the court order.

Selling a house "as-is" is an option available to sellers. However, it's important to recognize that opting not to make repairs can significantly affect the home's value. Furthermore, extensive repairs may limit the buyer's mortgage financing options. 

As a Certified Divorce Real Estate Expert (CDRE®) and experienced Realtor with RE/MAX Results, Shannon Lindstrom’s job is to maximize value and equity in a house. The cosmetic condition (e.g., cleanliness, condition of paint and carpet, landscaping, decor) substantially impacts the desirability of the home, the number of showings, the number of offers received, and the quality of those offers.

The wear-and-tear and potential damage to a house represent conditions that may not always be immediately apparent; rather, they often come to light during buyer’s private home inspection. These issues can include a damaged roof, compromised sewer lines, deteriorating ducting, wood rot, or electrical system malfunctions. In such cases, buyers may request repairs to be made or ask for a credit from the seller(s) to cover the costs of repairs from the proceeds of the sale. Occasionally, buyers may propose a price reduction instead. If an agreement cannot be reached, the buyer retains the option to cancel the transaction, and the house is relisted on the market.

If a seller declines to adhere to the requirements, and the property is subsequently relisted, it is crucial to recognize that the inspection previously carried out by the initial buyer becomes a new set of disclosure items that must be disclosed to potential buyers.

An additional factor to consider is that many cities, such as Minneapolis and St. Paul, mandate a Truth in Housing Inspection before a house can be listed for sale. These inspections are conducted by licensed inspectors authorized by the city to ensure compliance with local ordinances. Upon completion of the inspection, the sellers receive a Truth in Housing Report detailing necessary repairs to align with current city codes. Typically, homeowners must address the repairs outlined in the report and schedule a reinspection to finalize the sale of their property. In some situations, a buyer can assume the repairs listed on the Truth in Housing Report; however, some cities require the completion of repairs prior to closing.

Let's reassess the "as-is" provision outlined in the court order: Both spouses might feel deeply frustrated that they could potentially lose tens of thousands of dollars from their desired selling price, simply because they agreed to sell the property "as-is."

While sellers don’t necessarily have to cough up money out of their pocket to preemptively repair their house, here’s the reality: The value of the house is substantially impacted by its condition. And it is more common than not that houses of divorce are not maintained in their optimal condition. Deferred maintenance and damage are common — and there’s a price to be paid for that, whether on the front end (before the house is listed) or the back end (as a credit to the buyer).

Bottom Line: Don’t rely on an estimated net proceeds figure until the sale is complete.

Rest assured, Shannon Lindstrom is committed to maximizing the value and equity of the home. She is a phone call or text away for any questions you may have involving the listing and sale of real property in divorce cases.

Shannon Lindstrom, Realtor®, CDRE®, CREDS, CRS, GREEN, MILRES, MRP, VCA
RE/MAX Results
7373 Kirkwood Court No, Ste. 300
Maple Grove, MN 55369
Direct: 612-616-9714
Lindstrom_S@msn.com
Shannon@ShannonLindstromRealtor.com
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
www.TwinCitiesMilitaryVeteransRealtor.com
www.MNDivorceRealEstateExpert.com