Should Sellers Disclose They Are Divorcing?

For the last few years, supply in Westchester and the surrounding counties of available properties has been at an all time low, making it incredibly difficulty for home buyers. Low inventory, thanks the the law of supply and demand, still has us in the strongest seller’s market I have seen in a long time.

In many instances, the leverage that sellers enjoy have enabled them to cut corners. Staging, repairs, and many other things don’t always seem as urgent when there is a conga line of prospective buyers the first day a listing is active. So the question is asked, if there are multiple offers on the table and a feeding frenzy of buyers for a home, does it matter if the buyers know that the reason for the sale is a divorce?

In typical markets, the disclosure that a listing is on the market due to divorce is seen as compromising the seller’s position and for an agent to disclose that without consent is a serious breach of confidentiality. We’ve always been taught that when we are asked why they are selling, to not disclose about divorce. The rationale is fairly straight forward. If a buyer knows that a seller is under a court order to sell or is in the distress of having to sell because their marriage cannot continue, then the buyer will exploit that to their advantage.

I’ve written before that the first house I sold in a divorce situation had that same scenario play out. I sniffed out that the sellers were divorcing, I shared that opinion with my buyers, and they were able to negotiate terms that were outrageously tilted to their advantage. Because I represented the buyer I was doing my job. If I were the listing agent, my job would be to protect my clients from losing their advantage.

So, to revisit the question, in such a severe seller’s market, is there any disadvantage in the seller consenting to disclose their divorce to the buyers since it might not matter with all those buyers making offers?

I would still dissuade any seller from consenting to disclose their divorce. While it might not make a difference in the bidding and offer stage of the listing, the law of unintended consequences tells me that once the property is under contract that a buyer with no competition is going to press their advantage in other ways. They might attempt to bully the seller on closing dates, as New York is an on or about state and our window of “about” is 30 days. They might insist that the seller leave personal items that the contract is silent about, like patio furniture or lawn equipment. They might make a monetary demand for deferred maintenance or a last-minute issue that arises that is less reasonable than they would otherwise.

In short, when people have leverage, they typically use it when the opportunity arises. So even though we remain in a cartoonishly strong sellers market, I would never advise my client to give up leverage or control over material facts that could end up harming when no advantage could be gained.

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