When Realtors saw the Collaborative Practice Toronto booth at the recent Realtor Quest trade show in Toronto, many “were surprised we were there,” says Eva Sachs, a member of the team of divorce professionals.
Collaborative Practice Toronto seeks to help divorcing couples reach mutually acceptable settlements without going to court.
Eva Sachs
A number of sales reps and brokers who visited the booth were not familiar with Collaborative Practice and some thought it was seeking potential business from Realtors who are going through their own divorces, Sachs says.
But the presence at Realtor Quest made sense because Realtors are often the first professionals to discover that a couple is divorcing and play a pivotal role in the divorce process, says Sachs, a divorce financial consultant. This includes not just home buying and selling, but relocations and valuations.
The appearance at Realtor Quest in May aimed in part to get the word out to Realtors that their clients have choices when it comes to how they approach the divorce process, she says.
Clients going through a divorce often seek names of divorce lawyers from their Realtors, she says, and usually get referred to traditional rather than collaborative lawyers. “The word we wanted to get out was to really explain to people that they have choices.”
The collaborative divorce approach aims “to negotiate an acceptable settlement for families and to create customized solutions that consider the priorities of both spouses,” Sachs says.
The out-of-court resolution process for separating and divorcing couples puts an emphasis on full disclosure and open communication and helps avoid costly and potentially lengthy and nasty court cases. Clients make their own agreements rather than giving control to a court. And since settlements occur out of court, personal information and the settlements remain private.
Collaborative Practice seeks to create solutions for couples that are better than the court process. “People are surprised there is so much room for negotiating and for creating customized divorce solutions,” she says.
Professional practitioners in Collaborative Practice Toronto include family law lawyers, financial professionals and family professionals who typically have social work backgrounds.
“It’s a grass-roots approach to separation and divorce that is growing,” she says. There are similar collaborative practice associations for divorce across Canada and in several other countries.
According to Statistics Canada data from 2018, about 38 per cent of all marriages end in divorce. Sachs says those statistics don’t include common law couples who have comparable rates of breakups.
If the spouses agree that collaborative is the approach they want to take toward divorce settlement, they each hire their own collaborative lawyer and a team develops around the lawyers, typically consisting of a neutral financial professional and a neutral family professional.
Collaborative Practice professionals have received specialized training to become familiar with the collaborative approach.
Realtors play an important part in the divorce process because the matrimonial house is frequently the largest asset people own, Sachs says. Realtors’ opinions of estimated house sale prices are valuable and can be used instead of or in addition to formal appraisals “because Realtors may have a better sense of what current market conditions are,” Sachs says.
When it comes to hiring a Realtor, the Collaborative Practice team leaves the decision to clients who may have real estate agents that they already know. But she suggests getting two or three opinions from Realtors when it comes to evaluating house values, especially when the Toronto housing market is buoyant.
In recent years, it was tough to ascertain house values in the city. The challenge “has been even with good Realtors providing the best range of possible listing prices, clients are saying, ‘That’s great but I don’t accept that because my neighbour’s house just sold for $100,000, $200,000 over list, so those numbers are meaningless.’ The market’s cooled off a little bit now but we were hearing that when the market was really hot.”
In many cases divorcing couples choose to continue owning the home jointly and a formula is devised to handle how they will pay for household expenses and share in the sale price when they eventually sell. That scenario often comes to the fore when parents have children and want to stay in the same neighbourhood or school catchment area.
“They look at it and say, ‘Maybe for the sake of the family, it makes sense to keep the house until schooling is finished.’ That’s something that we’re hearing about more than we did years ago.”
In other cases, people go through their budgets and believe they can manage monthly mortgage payments to refinance their homes. However, “they don’t go far enough to find out if they would qualify for the kind of mortgage that they need. And that’s where the stumbling block comes in.”
While they can make it from a cash-flow basis, “they’re more challenged in terms of qualifying for the additional mortgage amount they need” especially under today’s stricter mortgage regulations.
Divorcing couples may also face a challenge when it comes to choosing a Realtor, she says. While they may want to use someone they’ve worked with previously, “they may have to choose somebody else in a clearer sense of neutrality and they may feel uncomfortable doing that.”
In 2014, Sachs co-wrote the appropriately named, self-published book When Harry Left Sally, which helps couples in their 50s, 60s and beyond find their way through grey divorce.
She says people in grey divorces often end up downsizing their homes. However, they may have ended up downsizing even if their marriages had not ended.
Danny Kucharsky is a contributing writer for REM.
