Listing Agreements and Consent Orders in Divorce Cases
QUESTION: A potential client has approached me about selling her home. She is in the middle of a divorce, and the judge has just signed a consent order awarding the marital home to her. She would like to sell it as soon as possible and use the money to move on with her life.
The wife’s divorce attorney has assured me that she will get the house. However, the husband has not yet signed a quitclaim deed, even though the attorney has said that getting a quitclaim deed will not be a problem. Can I accept the listing?
ANSWER: The answer is yes, but you will need to take some steps to protect yourself. First and foremost, it is important to understand that the consent order likely does not transfer title of the home. Most orders concerning the property of a divorcing couple will only be a direction from the judge instructing one party to give their interest to the other. This means the husband could decide not to sign the quitclaim deed. He could also decide to pursue an appeal of the judge’s order instead of giving over his interest to the wife. The bottom line is that if the husband does not quitclaim his interest, the wife does not have full title.
If getting a quitclaim deed from the husband is not an issue, then we would strongly recommend waiting for that process to be complete before taking the listing. However, if the wife insists that she needs a listing agreement now, you could sign a listing agreement with the wife and delay the advertising date until she obtains full title. You might also consider having an attorney draft an addendum to the listing agreement explaining that the listing agreement is contingent on the wife obtaining full ownership.
Just remember that a seller’s ability to convey title to a buyer is a material fact. If at any point during the listing it appears that the wife will not be able to do so, you must disclose those issues to any potential buyer.
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