The Legal Zone (S2:E5): Miami Luxury Homes: How to Buy & Sell

Transcript

Host: Regina M. Campbell, Esq., The Campbell Law Group (TCLG)

Guest: Melva Garcia, luxury real estate broker affiliated with Compass

Introduction

Regina Campbell: Hi everybody, I'm Regina Campbell. I'm your host here at The Legal Zone, and we're happy to bring you another episode. Today we're going to be talking about Miami luxury homes: how to buy and how to sell them. We have a wonderful guest who's going to join us, and I'm going to introduce Ms. Melva Garcia in a moment.

But I do want to talk about our last speaker, just to remind everyone, if you're interested in seeing the last podcast. It was Mr. Alfredo Gonzalez Amare, who was able to provide us with pointers on how to make investments here in Miami, particularly for Latin American investors coming into the country, to help them enter this country's market. But today we are going to shift our topic of conversation. We're going to introduce our guest speaker, Melva Garcia, for our episode today: Miami luxury homes, how to buy and sell. Hi, Ms. Garcia, how are you?

Melva Garcia: Thank you for having me.

Regina Campbell: It's a pleasure to have you here. It's such a hot market in Miami. We're kind of like that inflation booster, aren't we? We don't really ride on the regular rules.

Melva Garcia: I think we don't. Real estate is geographical, and so the markets are geographical. You have to look at each market. When we look at the statistics that we see oftentimes on the news and in negative press, they're looking at everything.

Regina Campbell: Sure.

Melva Garcia: And Miami, South Florida, Miami and the Tri-County area, we're very different. And post-COVID, it's entirely different. It changed for us.

Regina Campbell: Wonderful. Sounds fantastic. So this is why we brought Melva on. She's a friend of mine also, so I'm going to call her Melva. I want to give a little bit of background on Melva and her experience, because I think it's very, very important to know where she's coming from, and why she is an authority on this issue and can give tips on how to buy and sell, particularly luxury homes. Melva Garcia helps provide high-quality, concierge-type services as a real estate agent affiliated with Compass.

Melva Garcia: Compass.

Regina Campbell: Compass. Okay, sorry. I say that differently. Different languages. Her dedicated team of sales agents and brokers assists clients with all their real estate needs, with years of combined experience in every aspect of the real estate industry. Melva adds that key ingredient that makes her distinct in the real estate world. She helps you with everything from negotiating to financing, to selling and purchasing homes. She works with buyers and sellers in both sale and purchase transactions, and tries to make the process as seamless and smooth as possible. So we are very grateful to have her here today.

Working with luxury clients

Regina Campbell: With that, I want to ask her the first question, which is such a hot topic, particularly here in Miami, and for people coming into Miami I think they need to know, right? As an experienced professional in the real estate market, can you tell us about the varying difficulties people are having buying and selling luxury homes in Miami?

Melva Garcia: In general, the luxury clients, what they call that 1%, typically know what they want. They have the money to buy it. They're private. They're security-conscious. They may have more assets. They may have artwork. So dealing with them is a little bit different. I think when you work with anyone, you try to make them a friend, right? That's the best part of what I do. You end up...

Regina Campbell: Yes. I was really interested in that, the friend part.

Melva Garcia: So you get to know them throughout the transaction. You ask questions. You learn a little bit about their lives, about what they're going through at that moment. What is their motivation to buy? The luxury seller or buyer is a lot more private, so they don't give up that information as easily, for many different reasons. It takes a little bit more gauging, a little more time, more questions, typically in conversation.

Sometimes we send clients a questionnaire to get to know them. You can't do that with them. You just have to get to know them and pay close attention to the things they say, even to the people they're around. Oftentimes they have advisors, so you really have to get to know who their trusted advisor is, who is going to be with them throughout this process, because oftentimes that's the person you're going to be dealing with.

Regina Campbell: Okay. That makes a lot of sense. A lot of times it's also the trusted advisor who knows what they're looking for, whether it's, like you're saying, privacy. I've had some clients who also want anonymity. They don't want their name on title, so to speak, aside from investment concerns and other issues that might come up when purchasing a property, and asset protection, so to speak. But I guess that's when you talk to them: do they like it this way? Do they like certain views? What are their concerns? Do they want extra security? I guess that's what you're referring to.

Melva Garcia: Yeah. What is the house for, in every sense? For instance, a seller who has a multimillion-dollar home may have millions of dollars hanging on their walls. It's not like they can pack it up and move it into a warehouse temporarily, because they have to keep certain climate controls. It just doesn't work for them.

So this is where... we all talk about having clients who come directly to you, but I love working as a transaction agent with a qualified agent on the other side. Why? Because that agent knows their buyer. So when an agent brings me a buyer and it's a luxury property, I feel a lot more comfortable going right into it. I'll even question the agent about their financials, and a lot of the time the agents will tell me, "I've known them. I've known the family. I've done multiple transactions for them."

Showing a luxury home safely

Regina Campbell: No, that makes sense. But you also want to make sure they're not wasting your time, or that someone is not just trying to sneak into someone's home.

Melva Garcia: That's the worry. That's the biggest worry, I think. If I were a seller and put myself in their shoes: walking into some of these closets, they probably have millions of dollars in handbags and shoes and things of that nature. Good for them. They have enjoyed them. This is the life they want. But they also don't want to be that exposed.

Regina Campbell: As you are. When you're showing your home to people, you're exposing your closets, your bathrooms, everything: your privacy, your style. You're almost literally opening your drawers. Hopefully no one's opening drawers, but for the most part, they're seeing other aspects.

Melva Garcia: Right. So this isn't that type of showing. You're typically going to try to show it to as few people as possible, not having that rotation, that revolving door, especially if the home is occupied.

Regina Campbell: Okay. That makes sense. Also, I guess, the security: they have to be concerned with someone getting to know the floor plan of their house with nefarious intent, should that happen.

Melva Garcia: I had a seller, God bless her, I love her, we're still good friends, but she insisted on being there for all of the showings. And these buyers came without an agent. For some reason, my spidey senses...

Regina Campbell: Yes.

Melva Garcia: I oftentimes bring somebody to those showings, an associate, and we'll both be there to see what's going on. So we'll walk through the home, and they'll walk behind me, or we'll switch it up, to make sure that everybody's going to the same rooms.

Regina Campbell: So they're not splitting up. They're not just running through the back.

Melva Garcia: Right. I had that happen. She was there, and she hears them ask about the whole floor plan and the security system, which at that point had been disconnected. They had an issue with the alarm, and she had told me it was disconnected, so I knew that. And she pops in and says, "Well, let me show you the control room. It's disconnected. We have all of this here." And my heart is going.

At that point I had my associate with me, and I said, "Hey, do me a favor. Take them outside." And then they asked whether there were floor plans, and she popped up again: "Of course I have floor plans. Let me get them in the office." So I asked my associate to take them into the yard, and I took her into the office, and I said, "I'm sorry. With all due respect, I'm trying to protect you here. I don't know these buyers." And I explained to her, "This is the security of your family."

She just kind of froze. I remember I felt really bad, because I had to be almost stern with her. She later apologized, and I said, "You have to trust me. There are certain things you really shouldn't be saying, because it's for your own safety."

Regina Campbell: Yeah. People don't realize it, because a lot of times you think others are like you. They don't have nefarious intent. Your seller is like that: "Let me make a coffee for you." So that's a really important point. It's very distinct from the average purchase, or even from just showing a property. That's one of the things that sets you apart, and why you know a lot about selling luxury homes. Hopefully these tips are helpful for everybody today.

Post-occupancy agreements

Regina Campbell: So what are the difficulties you're seeing? Is credit still an issue for these buyers or sellers? What's going on? What are the different kinds of things coming up in these luxury transactions currently?

Melva Garcia: I think across the board, and this is one thing that hasn't changed, whether it's luxury or not, and it's something that most attorneys would recommend against: post-occupancy.

Regina Campbell: Okay. Yes, yes. As an attorney, you're going to tell your seller, "No, no, don't do it," because of course it creates somewhat of a landlord-tenant relationship post-closing.

Melva Garcia: Yes. And for different reasons, as tight as that post-occupancy agreement could be, it could get complicated.

Regina Campbell: It can. And you have to have a lot of teeth in them too, if you're going to get them out.

Melva Garcia: Yes. Well, the funny thing is we have been seeing the post-occupancy agreements getting a lot more lax. The terms have been much more favorable to the seller rather than the new owner, because it changes.

Regina Campbell: Yeah, to the seller. Right. I imagine some sellers may have to stay because they're having a hard time finding new homes. They say, "Can I stay in the house after I close, for 30 days?"

Melva Garcia: That's exactly what we're seeing. Because we have such a shortage in inventory, especially last year, sellers would tell you, "I want to sell my home," but they wouldn't see anything. So you start sending them properties before they list, but they don't see anything they like. They have trouble with that. At that point we shifted a little bit and had to say, "Look, more often than not, we're able to negotiate a post-occupancy."

But I have to be clear, because in Florida we're transaction agents. So I have to tell them, "This doesn't mean that this is your home. Once we close, it becomes the buyer's home, and you have to understand that you're their tenant now." But we've been able to navigate them. I even had one, again a luxury home, that was a 90-day post-occupancy, and I thought, "Oh my goodness, I don't even know how we got it done." Ninety days, rent-free.

Regina Campbell: Wow.

Melva Garcia: I had never had one.

Regina Campbell: Yes. And some of them go bad, apparently.

Melva Garcia: And the seller couldn't find a home. Luckily she was very fast, and we were constantly on it. She found the home directly after the close, and we were able to get it done.

Regina Campbell: But it definitely depends on the person.

Melva Garcia: Oh, no, no, no. And that was a good one. And right at the end, it got messy. The attorneys came into it. At that point, I kind of like it when the attorneys step in, because it takes so much pressure off of me. I was like, "Okay, now you guys have to work this out."

Regina Campbell: Right. I've seen situations with a 90-day post-occupancy, or 60 days, 30 days, whatever it is they agree to, where the other person's closing on their property got delayed by 15 days. Technically it goes past the contract period. Am I really going to kick someone out for 15 days? Did they cause damage? There are other things that start happening. Or something happens with a roof, or an incident, or a hurricane, and all of a sudden it becomes more complicated. These post-occupancy agreements are not very clear about what happens in those circumstances. They're like renters, technically.

Melva Garcia: The biggest issue is the one you just mentioned. The buyer buys and they're excited. They now own this home, they're paying all this money for it, and they have all these expenses. They want to come in to measure for curtains. They want a survey done. They're planning an alteration of something. And now the seller is packing and getting ready to leave, and they don't want to be bothered. So, "Okay, one time to come in." But then the buyer is like, "This is my home, and I'm letting you stay in here. So I'll come back again and again, as often as I need. This is the time my contractor can go. This is the time I need to sign."

Regina Campbell: That is where it's almost impossible for any attorney to foresee all of these different scenarios. In those situations you almost have to create an actual landlord-tenant agreement to that extent, because then at least, one party or another may benefit, depending on who wants it or doesn't want it, but at least it gives clarity. Under those circumstances, the buyer can't be unreasonably coming into the house every five minutes.

So if you default to Chapter 83, the landlord-tenant rules, you know the rules. But the buyer may be like, "No, I want to be able to come in and out." Well, now they're going to put that in an agreement, and then it's "one time," "no, no, I need to come in twice," and it's not clear. Like you're saying, that makes it even worse.

Melva Garcia: It's very, very difficult. I think that's probably been the biggest change, and it's part of almost every transaction.

Who is moving to Miami and why

Regina Campbell: Wow. I guess because of the shortage, no one's leaving, in my opinion. I was looking at statistics from the National Association of Realtors, and they said that in 2021, for every hundred people who left Miami, 256 moved into Miami. So it's not stopping either. This year I think Florida is seeing maybe 834 relocations a day, or something like that. I forget the exact numbers. That was one of the questions I was going to ask you: how many of them are relocations? Have you seen something consistent with this?

Melva Garcia: Very consistent.

Regina Campbell: Okay.

Melva Garcia: Very consistent, and we're seeing it at all levels. It's all primarily due to COVID. As hard as we had it here, other countries had it...

Regina Campbell: Still have it.

Melva Garcia: Still have it, a lot worse. When you have this unforeseen pandemic... who would have thought in our lifetime we would have seen that? If someone had said they were going to close the world down, I'd have thought I was in a movie, right?

Regina Campbell: Yes.

Melva Garcia: What happens when things like that happen is that it changes countries. It changed the U.S. And a lot of countries outside the U.S. that had it so hard are still undergoing very difficult times: economic, physical, political. They're creating political instability as well. So a lot of people, if they're able to, are coming here. They're buying here. They know that their money is safe here. No matter how much negative we hear about our market, you're always going to do better. It's a long-term thing.

Regina Campbell: It is. And it's a good place, because it's not a place people are exiting. It's New York and California that are having that issue.

Melva Garcia: Yeah, California and New York are having more of an exodus.

Regina Campbell: And New Jersey and Illinois.

Melva Garcia: For different reasons. A lot of the multinationals are coming down to Miami, to Florida. We used to not have multinationals.

Regina Campbell: And New Yorkers.

Melva Garcia: Yeah, true New Yorkers.

Regina Campbell: It's funny you mentioned all those markets. New York, California and Illinois are in the top 10 tax brackets. There's a reason why they're leaving. And the others we're seeing, New Jersey, Pennsylvania, there are like four or five out of the top. It's state income tax.

Melva Garcia: And we've been attracting technology. Florida in 2021 was one of the top states to attract technology companies. Before, it was California. What's happening is the CEOs are coming here and saying, "Wait a minute." They see a lot of negative press, because we have it like every state. You see the press, and they like to focus on the bad. But then they get here, and they're like, "What is this?"

I have one buyer on Miami Beach who is moving his whole company here. I asked him, "What is it that motivated you?" This was December, and we're in this beautiful condo on Miami Beach, and his kids are downstairs in the pool. He said, "I just got off the phone with one of my friends in New York. There's a snowstorm and they're locked down. And here we are, it's December, my kids are in the pool, everybody's tan and happy, the restaurants are open, and it just makes sense."

Regina Campbell: Yeah. I was up there for my son's graduation shortly after, and they were just about to start locking people down. And of course, the winter. There are some things about the winter I miss, but I just wouldn't want to be there the whole winter. I love New York. It's like my second home. I feel like there's a little ghost in the room. It seems to start moving on me. I don't know what it's doing.

Rents, rates and prices

Regina Campbell: Okay, so that makes sense. That falls in line with a lot of what we've talked about in the past: people are seeing the news and everything. But the biggest problem, I think, is also that the people coming in here are driving up the prices. So part of the issue is: then where do the employees go? Where do the other workers go? Because I hear it's not just hedge funds, it's big capital companies coming down here. So do you just keep expanding those boundaries?

Melva Garcia: Remember, they're coming from markets where rents are much higher than even our current rents. If you're coming from California, or especially... that's 20% of the relocation buyers: roughly 10% from New York and 10% from California. If you're coming from those states, you're used to paying very high rents.

Regina Campbell: If we've lived here for a very long time, we're like, "What's going on? Why are you charging this for an efficiency?" It's insane, right?

Melva Garcia: It depends on the area, but they're fine. They come down here, and to pay $1,900 or $1,800 for a 400- or 500-square-foot unit on Brickell, they're okay with that.

Regina Campbell: They're okay with that. I guess it's the Floridians who are like, "What is that?" They're just in shock. I'm hearing of some rents going up 30%.

Melva Garcia: Yeah, 50%.

Regina Campbell: 50%. You can't afford it.

Melva Garcia: It's very, very difficult. And for our kids who are in their 20s right now... my assistant tells me all the time, "I want to move. I want to find a place. Where am I ever going to move?" Because she sees what we're looking at, and it is getting hard, even with good incomes.

Regina Campbell: Yes, it's getting more expensive. My son was like, "Mom, it's so expensive." He likes Miami as well. He likes both places. He's thinking about coming down here, and he starts looking, and he's like, "Oh, it's not that cheap down there." Sticker shock, because the difference between Miami, California and New York... we're inching closer.

Melva Garcia: Yeah. So even a $100,000 income doesn't go as far as it used to.

Regina Campbell: Yeah. So that answers some of the questions we talked about, what you're seeing in these transactions, and I guess the answer is mostly the post-occupancy. And it does seem to ring true that everyone's coming in: the influx of a lot of relocators, and people who are repatriating here, or expatriating here, depending on the circumstances. I'm sure you're hearing about that, right?

Melva Garcia: We listed a property last week, and I was surprised that a lot of the buyers have been that. They're coming from Venezuela, from Colombia, even from Santo Domingo, from Puerto Rico. We're seeing it from different places. Some of them have had properties here. One family in particular is moving. I won't say what they do, but they have a very big chain in their current country, and they're opening several locations here. So now they're buying their properties, which I think helps them with their visa. Each one of the family members is buying a particular property.

Foreign national loans were kind of a thing of the past. That was the 2000s, right before the Great Recession. But now we're starting to see them come back, which I love. They're great loans. These people really want their status here. They're not going to do anything to mess it up. So they're coming in with large down payments. They take a little bit longer to close.

Regina Campbell: Yes, but it's also part of them being able to come into the country. It's part of their visa, part of their status. And then you have people who come from various countries and want to see some of the name brands they're used to in their country. If you have a lot of people coming here from Brazil or Colombia or Venezuela, they want to see some of those chain stores that they had there. Well, there are a lot of Venezuelan clients here. It's a great place to open up a store, and it makes all the sense: a little bit of home. And we're seeing more of it when you walk through the malls, these little pop-up shops. You can see that they're a little bit different: beautiful stuff, especially handmade stuff.

Melva Garcia: Yes. I think it's awesome. I was so surprised, pleasantly surprised, to see it.

Regina Campbell: Me too. Definitely. So I think you've also answered the question of what percentage of the homes in Miami are bought because of relocation. You talked a little bit about that as well. Do you find that's the primary reason people are selling and purchasing homes, relocation somewhere within Miami? Because you're saying a lot of the people who are selling homes are still staying.

Melva Garcia: Are still staying. In the past, statistics would show people would come to retire in Miami, or they'd retire outside Miami. So you would have the person who would sell their home and move: a lot of relocations from retirees to places like North Carolina. I think Miami has become more metro, right?

Regina Campbell: Yes. It's become bigger and bigger.

Melva Garcia: So if you're retired and living on an income, you may want a little bit slower pace, where you can drive to the corner to go to your local shop, things like that, and not be a part of the traffic. But pre-COVID, we also had the younger population, like your son, who would leave here because all the tech jobs were in California, or they'd go to New York, because that's where all of the big companies were: the finance companies and the law firms. So that's where everybody wanted to be. That's changed now.

Regina Campbell: It's coming back.

Melva Garcia: Right, it's coming back. The new graduates are saying, "I don't want to be stuck." Now they know that there's a possibility of the world closing down.

Regina Campbell: Yes.

Melva Garcia: That's changed forever for all these generations that lived through it: that it could happen.

Regina Campbell: And I think they also feel a sense of empowerment with the Great Resignation right now. There is a lot of flexibility. Unfortunately, it will probably start to clamp down a little bit if a recession comes around the corner. But right now employees in general have more say: "I want to work remotely. I want to work here. I want to make this much money." So it is more possible to live in different places. You want to live where it's going to be easier for you, where you may enjoy it, where you don't have to go to New York City...

Melva Garcia: Absolutely.

Regina Campbell: ...and work for a hedge fund in particular, even smaller ones, because the bigger banks were still there. It's funny, because my son is going to start his graduate program, and he had a choice between a New York school and a Miami school. He was like, "Mom, I love Miami, and my network is down here. It's a bigger network now." Even though New York is still New York. So he's like, "Mom, it's possible. It's grown so much. There are so many opportunities." "Oh, my honey, I'm happy to have you here." I know it feels different, but basically, they're seeing that possibility in real time. We're seeing changes that would have taken 10, 15, 20 years. It seems the pandemic pushed everything into a year, so to speak, or changed it forever.

Melva Garcia: Yes, and that's the primary change we're seeing in the real estate industry.

Regina Campbell: That makes sense. But it seems like we're still hot, right?

Melva Garcia: Yeah, we are. If we just look at the numbers from last year to this year, inventory is up. Sales are down, slowed down. But what we haven't seen much of... they keep talking about prices, and some buyers are sitting on the fence. In December of last year, I remember a buyer asking me, "I don't know what you think. They're offering me like 3.2% or 3%. Do you think they'll go lower?" And my jaw dropped.

When I was in financing, when I was a mortgage lender, I would tell people, "Your rate is what it is when you're motivated to buy or to refinance. Just lock the rate. Don't look back." Because you're going to be so much more upset if you don't lock and it goes up than if it goes down a little bit.

Regina Campbell: Yes. Sometimes you don't want to be completely greedy about everything. You can't always pick. It's like trying to pick a spot in the market, knowing where it's going to be on certain days. It's impossible. So I'm sure he's kicking himself right now.

Melva Garcia: Oh my goodness. Yeah. So they waited, and now imagine: the interest rates are almost double what they were looking at before.

Regina Campbell: That's priced them out of the market for the ones they want.

Melva Garcia: Correct.

Regina Campbell: And the prices increased.

Melva Garcia: Absolutely.

Regina Campbell: So it's amazing. Sometimes, I would say, God puts you where you need to be when you need to be there. But whether it was meant to be for them, or they were just there and didn't realize it... sometimes we don't capitalize on where we are. And in Miami, my home has increased in value. But where would I go? You know what I mean? My kids love my house. They've been there for less than 11 years, so they're happy.

But sometimes you also have to be educated about these things and what works, and understand the bigger picture. I think working with a broker who knows the environment and knows the market does help, so you're not lost. Because phases can come and go, but even when you are in the middle of a phase, and I know things have been overpriced in Miami, you need someone to help guide you: is this still more of a price than normal or average? Someone helping you run comps, helping you make those decisions and look at different aspects. You need a school? These are the kinds of schools that are nearby. Someone who knows the market.

A lot of people come in who have never lived here. You buy a house, and if you had to do it again a year or two later, you might have bought the house 10 miles or five miles further south. You don't know. But someone can help you think about these things and answer these questions for you. And that goes back to your original point: getting to know your client and what their needs are.

Knowing when a buyer isn't ready

Melva Garcia: So it's not just about the transaction. Sometimes you may have to walk away from it. You may have to walk away from a client, because they're being unrealistic and they're pulling away so much energy. It just gets to that point where you're like, "Okay, maybe this isn't the time for you."

Regina Campbell: It's funny. Sometimes you have to sit them down and say, "Okay, but you're putting up these obstacles. Maybe you just don't want to do this right now. Is it possible that the timing just isn't right for you? You're not sure." Right? Unless you sold your home and you really just don't want to rent, or whatever. I get that.

Melva Garcia: Sometimes they don't know. It might actually be better: "Why don't you rent somewhere for a year, figure out where you want to live, get to know the area, and come back to me?" Because there's no point in pulling your hair out trying to figure out what they want. "This closet's too big. This closet's too small." You find them that unicorn and they're still not sure.

Regina Campbell: Yeah, that's when you know.

Melva Garcia: That's when you know. There's that moment when you find them that unicorn and they are just... I call it the Goldilocks syndrome. There's usually an underlying reason. You see that oftentimes in couples.

Regina Campbell: Okay.

Melva Garcia: I recently had one similar to that. There were other reasons going on, and I caught on in meetings.

Regina Campbell: Yeah. And how you address that, sometimes, because it's more personal...

Melva Garcia: Yes.

Regina Campbell: You've got to be careful not to get involved in their personal lives. At the end of the day, someone wants a big house, a big mansion, and the guy wants a smaller house, just something simple with a three-car garage.

Melva Garcia: Yeah, three-car. That makes sense.

Regina Campbell: Yes. So you're like, "Okay, what am I supposed to say? 'You should think differently and want something different'?" You're not going to say that. You have to be very delicate, right? Ultimately, they have to make a decision.

Selling a home during a divorce

Regina Campbell: So that actually brings us to our last topic. This will help a lot of my clients, and I'm sure a lot of people in Miami can use this advice as well. What is the best way to sell a house if you're in the middle of divorce proceedings? Because that's tricky. Technically you have someone with a mutual interest, but they're really not aligned, because depending on who's going to get what, the division of the assets can change the trajectory of people's lives, so to speak. And it's already happening. They may or may not have to sell their house, and they're going to see how expensive it is now, and they're like, "Okay, well, I can sell my house, but where do I go?" So what are your tips for that? Because that's the tough one.

Melva Garcia: Yeah, that's a really tough one. Luckily, I've been involved in a number of divorces, because of my background as a paralegal. I was a paralegal for 14 years. It takes a lot of patience. In those types of transactions you're dealing with divorce, feelings, emotions. Buying a home is stressful enough. Selling a home is stressful enough. When you're going through a divorce, compound all of those emotions times 100. Children may be involved. They love their home. This is where they were born.

This has been something that I myself have struggled with, with clients in this scenario. Like you said, you have two parties. They should be aligned, because there's one asset, but the two parties who own this one asset have motivations that are not aligned.

Regina Campbell: Not necessarily.

Melva Garcia: Right. So in a perfect world, I try to talk to both of them, and I tell them... As an agent, if they list a home while they're going through a divorce, I have to be available to both parties. I really have to speak to both parties. In Florida we're transaction agents, transaction brokers. We have to be ethical. We have to be transparent. We have to disclose. We work for the transaction. We work for the sellers, which in this case are two parties who are not aligned.

What I try to do is, like I said, meet with both of them. If I can meet with both of them together, that's always the best scenario, because I can see the synergy between the two of them. And you will very quickly learn who has the power. There is typically one party, and it's not always the one the court designates as responsible for the sale. It's just that in a marriage, there's always going to be somebody who's the strong one.

Regina Campbell: It happens. Someone's also strong for financial reasons, or understands the transaction better. My concern is also that sometimes people have motives that are not necessarily right: "I don't want her to get the house," or "I don't want him to be able to sell it or get as much money out, so I want a fire sale," and they're difficult. A lot of times, if I'm drafting a marital settlement agreement or something of that nature, I try to lock down as many contingencies as I can. Even so, at the end of the day, it's hard. The listing price is going to be based on a realtor's analysis of what it should be listed for and what the market sale is, and you try to have some reasonable language in there. Because, I mean, you've heard the crazy stories: someone sells it for $1 to their friend. So you want to be careful with these kinds of issues.

So it's touchy. And I assume the court also wants to make sure... you might have been brought in as an expert or as a witness: what is going on here? Should we reduce the price? Should we not reduce it 5%? The other thing, of course, is that I think couples realize you don't want this to be advertised either, because if a buyer knows there's division, there's concern, there's urgency, they're going to take advantage of it. So I can imagine that's a lot to wrestle with.

Melva Garcia: It's a lot. It's funny you say that, and I find it more and more these days: the internet has taken away any secrets. So if you're going through a divorce, do not be posting that you're out partying now without your significant other. Because people do their homework. Buyers who are looking, especially in the luxury market, go online, figure out who the owner is, go into their social media, and say, "Oh, they're going through a divorce." They figure it out like that. I have people walk into the house, and as we're walking through, they'll tell me, "I understand they're getting divorced." Or they know the neighbor who knows somebody, because, especially in Miami, the crowd kind of runs in the same circles. So people will know.

Regina Campbell: They want inside information too. They want to know if someone else comes in.

Melva Garcia: Right. But especially in this market, it really doesn't matter. They're going to get what they're going to get, and the value is the value. I think in years past it was really used as a bargaining chip.

Regina Campbell: Because in general the market is so hot, you don't have an issue?

Melva Garcia: Yeah. It's changing.

Regina Campbell: So that's interesting. Okay. That's a good point, because it does happen, and we forget that that's another aspect of this industry: controlling the circumstances.

Melva Garcia: I actually just had a transaction where they were separating and there were kids involved. The husband referred me, and we had to sit down with everything transparent. It's heartbreaking for me as a mom, because when you get there you can see the kids are upset. They see what's going on, and when they see you, they know what that means. And in the middle of it, they're having a little bit of a discussion. So honestly, you wear the hat of a psychologist, you really do. We're not attorneys, we're not psychologists, but you really do have to have a little bit of psychology and a lot of empathy.

Regina Campbell: Yes.

Melva Garcia: Because they're both wrong, but they're both right, and they both have the feelings that they feel. Neither one can feel that you're favoring one side or the other. I was able to manage it throughout, and it went relatively well. And it was funny, because there were no attorneys involved. I was shocked. But they weren't legally married. They had been together for many years.

Regina Campbell: Okay. So it was the same thing.

Melva Garcia: They had the kids. It's the same thing. I really got to know both of them, and you feel for both of them. So I want to see them all happy.

Regina Campbell: Yes, yes, yes. Moving on and being fine.

Melva Garcia: Moving on. And I think you probably go through this too, telling people, when they're going through something like this... you feel like it's the end. I've been through it, so I understand. I think that helps me help people go through it. Because I did have some legal background, I tried to pull the emotion out of my divorce. Almost impossible, as much as I tried. But if you do pull back the layers of emotion and try to focus on what you're trying to do here... If you have kids in the house and they have two parents who are disgruntled, it's not a good setting. So your home is going to be wherever you're happy, and where both parents are happy.

Regina Campbell: That is exactly my philosophy as well. A lot of times people are so angry, and sometimes you'll get people playing dirty on their side over the home. I try to ask them: have you been happy in the home lately? Have you and your kids been happy? Because they were kicking and screaming. Everyone's screaming. Remember that when you have peace, it doesn't matter if you're in a small 1,000-square-foot apartment or a 40,000-square-foot house. What's the point if you're miserable, if you're not happy?

You have to think about tomorrow, after the divorce. Everyone gets so hung up on right now. And it is important to get certain legal rights attached to that, to enforce, to be watching and to preserve. But there also has to be a limitation, some reason that comes in there. Think about what it's going to be after: "I have to remember there is a life after this, and I have to set it up for that, for me and my kids to be happy," right? If you create trauma everywhere, and these kids have gone through so much trauma, not only are you going to take that trauma with you, the children are going to take it with them forever.

So it's just better to try to... unfortunately, not everyone is very reasonable. But if they just think, "Okay, we have to do this. We're going to separate. We'll try to do the best we can," and try to see it more objectively. Think about, like you said, the children. Where are we going to be happy? Maybe we'll have peace somewhere else. And everyone can go around telling the other side, "Well, I'll be happy when I leave." That starts a fight.

Melva Garcia: One of the things, when they're negotiating the settlement: everybody focuses on "Okay, I want to keep the house," or "I want to do this." They have to remember that when you're negotiating, you're negotiating today, with the value at that point, today. That value can go down. It can go up. But typically, for it to go up in a normal market, you're talking years. It's got to be a while. And this hasn't been normal. So for me, I think the smartest thing is always to sell the home in the market you're in, because that's the market you're going to be able to buy in. You're going to get top dollar for the house. And then you're not having to think, down the line, about what happens if the values go down, which has happened to a lot of people.

Regina Campbell: Look at 2007 and 2008. People really lost their shirts.

Melva Garcia: They lost their shirts.

Regina Campbell: They were negotiating and saying, "I want this," and then they got it, and half the time they're having to modify, and they realize, "I got nothing from the house. I took the house and everything just dropped. It dropped significantly, and I was upside down on the mortgage versus the value of the house."

And I deal a lot with assets. So I'll take a look: what do you want? Okay, you want this hedge fund, or you want a certain type of account. Do you know what that means? Do you know what rights and obligations go with that asset? Because it's not just the house. It's other assets as well. You may want the yacht, or the boat, or something else. Well, let's think about how much money it costs to maintain the boat. Do you like the boat? Do you know what it means to do that? It's emotional. They want it not because it makes sense, but because of an emotion they have attached to this asset.

Melva Garcia: Correct, correct.

Regina Campbell: They're not really looking at it. So I try to bring in financial advisors if I can: "Can you look at this type of investment that has certain losses?" They don't quite understand what it means, because they're looking at it as just, "Okay, let me hold on to what I have." But you don't necessarily always have what you think you have. And things change. You may have to start working. Expenses will shift. What do you really need? That's really important.

Closing

Regina Campbell: So that was one of the last questions. I think we've hit almost everything. There's a little ghost here, I think.

Melva Garcia: It's running off by itself.

Regina Campbell: It's the prompter. It's literally going off by itself. But I think we hit everything today. Well, I want to thank you for coming in today and being part of this episode. It's so great to have you. I think it's so important to have someone like you, with this background and this experience, to help buyers and sellers alike.

Melva Garcia: Thank you. I appreciate you having me here.

Regina Campbell: Absolutely. We want to thank everybody for joining us. Hopefully you'll join us for the next podcast also, which will be announced soon. And please don't forget to follow us on our social media accounts. Thank you so much, everybody. Have a good day.

Melva Garcia: Thank you. Have a great day.