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Taking Over Payments
Dear Edith: We are looking to take over payments on a home. The owner just wants out from under. We will have the option to buy in one to three years. What do I need to do to make this legal for my protection as well as the owner? — J.
Answer: …Read more.
Do They Qualify?
Edith: Are we required to pay 28 percent capital gains taxes on a house we are selling?
The house was signed over to my wife and me in 2004 from my mother who is in a nursing home. The tax laws are so confusing that I am having trouble trying to …Read more.
Do Sellers Up the Price?
Dear Edith: I would like to purchase a home very soon. I am approved for a certain amount. I want a home and it is listed more than I want to pay. Is there a normal amount that the sellers up the price to negotiate, or is that what they actually …Read more.
Legal Signatures
Ms. Lank: The buyer has agreed to my terms to a counter, but we only have talked via e-mail. I have not sent his Realtor the signed contract. Am I still obligated by law to go through with the sell? Are we bound by what we e-mailed? — L.G.
…Read more.
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Below Market Value For A Quick SaleEdith: HELP! Our 72-year-old friend is undergoing severe stress with a son in Iraq and estranged daughter-in-law and grandchildren. She wants to move out of the home she's been paying on for the past 12 years. She doesn't feel comfortable in that area and wants to move to an apartment right away. She says she will mail the keys back to her mortgage company and walk away from 12 years of equity, just to get out. We have told her this will wreck her credit, but she does not care. Can you suggest anything we can do? Perhaps your answer, from an outside source, may help her think clearly. — K. Answer: Ruining her credit may be the least of your friend's problems. She may move out but she can't just walk away from the mortgage debt. It will follow her. Twelve years ago she signed a personal promise to repay the loan and that still holds. Quitting will not only ruin her credit, but also leave her open to more troubles she doesn't need, like a judgment or collection. If her home is worth more than she owes, she can get out quickly without ruining her credit, and even end up with some cash. She can call in an agent and put the place up for sale at less than market value, below the agent's recommended figure, at a bargain price. If it's low enough, that will bring a prompt offer even in a slow market. Then, if she can hold out for a couple of months while her buyers arrange financing, she's likely to come out with some money. Much better than walking away, ruining her credit, and asking for future problems. If, on the other hand, she owes more than the place could bring in today's market, then she needs to talk with her mortgage company about what options may be open to her. Rental is probably asking for headaches. But, at any rate, the first step is to call three real estate companies that are active in her neighborhood and ask them to send someone over with advice. Until she knows the market value of her property, there's no way to decide what to do. Rent-To-Own Dear Edith: I want sell my house on a rent-to-own basis. Answer: Yes, you need a lawyer and what's more, your prospective tenant-buyer should have a different lawyer. Here are just a few questions that should be answered in your contract: If the buyers later have to move out of town, can they let someone else take their place in the deal? Could you take out a new mortgage loan on the property? Can you keep the $3,000 if they later trash the place and desert it? Can you sell to someone else instead if you get a better offer? Have you offered to hold their mortgage when the year is up? Or will a bank give them a loan with only $3,000 down? If not, can they keep trying or must they give up and move out? If they leave, do they get the $3,000 back? Here's more: If they fall behind in rent payments, do you have the right to evict them? Do they still get the $250 credit in a month when the rent is late? Do you own the deposit money, does it remain theirs, or is it kept in trust? If so, where is it held? What happens if you don't make your own mortgage payments or fail to pay property taxes? Who pays to replace the water heater if it dies just before closing? Your lawyers can think of lots of other things that should be nailed down in a written contract that will be fair to everyone. How Much For Maintenance Dear Edith: Is there some approximate formula that relates the fraction of house purchase price to what you will have to spend for upkeep on furnaces, water heaters, siding, roof, etc. say over the next 20 years? My husband and I, the old grinches, are worried about a younger relative taking on a house. — First Old Grinch Answer: For property in good shape, investors and property managers often estimate about 2 percent of market value to be set aside every year for future expenses like the ones you mention. That's an average, of course, not really much use in predicting what will happen with one individual property. Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com. COPYRIGHT 2009 CREATORS SYNDICATE INC.
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