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Buy and Bail
Dear Edith: I will try to make this short. I bought my condo in 2006. My mortgage rate becomes adjustable in 2011. I am upside down $85,000, originally bought for $435,000, worth $350,000 now. I have no problem with the payments now, but I fear when …Read more.
Agent Still Showing
Ms. Lank: We have accepted an offer on our home, but our agent wants us to continue to show our house. So, does that mean we can accept another offer if a higher bid comes in? — T.C.
Answer: Your agent knows some deals fall through and is …Read more.
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 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.
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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 decipher the answer. Please point me in the right direction. — D.P.W. Answer: I'm assuming you don't live in the house. But did your mother retain life tenancy? Has the place been rented out since 2004? Did ownership change when your father died? All that might make a difference. My guess is that you will indeed owe capital gains tax on your profit — at less than 28 percent, by the way. That profit will be figured from your mother's cost basis for the house. You could use help from a CPA, enrolled agent or tax attorney. SELLING TO DAUGHTER Ms. Lank: We want to sell our previous residence to our daughter who is currently living in it. We need to know the steps to complete this ASAP. — e-mail Answer: How is your daughter going to pay for the property? If you have an FHA or VA mortgage and she can qualify financially, she could take it over. Otherwise, your loan, if you have one, must be paid off. The lender that finds out there's been a change of ownership (through her insurance policy if nowhere else) could declare your loan all due and payable immediately. If you have no mortgage, it gets easier. Unless she's paying you all cash, though, or you're making her a gift or taking back a mortgage, she'll need her own loan. To apply for one, she can contact a mortgage broker. Then you'll need a lawyer or a real estate broker to draw up a sales agreement. You might want to hire a broker, perhaps by the hour, to guide you through the rest of the procedure. Or you can contact whoever usually handles closings in your area. Depending on local custom, that might mean a real estate attorney, title company or escrow company. CAN'T FIND A TENANT Ms. Lank: We have a property that we had hoped would be an investment, but we have not been able to find a tenant. Answer: I don't know that real estate market. Maybe everything in town is standing empty. But if other places are being rented, my guess is that you've set the rent too high. After all, if you offered the place for $10 a month, you'd have your pick of tenants. And somewhere between $10 and what you're asking is the right level to attract interest. Is your management company paid by a percentage of the rent you'd collect? If so, it's hard to think they aren't doing everything they can to find a good tenant. I don't think changing to another company would make much difference. LEASE OPTION Ms. Lank: I have a lease with the option to buy. I paid $3,500 for the past nine months with $1,000 to be used as the down payment. It was understood that if I didn't buy, I would get that money back. Now that I am not able to purchase, she is not willing to give me the money owed. What is my recourse? — e-mail Answer: I hope that understanding was in written form. At any rate, small claims court is an inexpensive way to get a judge's opinion. GIVING TO SON Hi. My son lives in a condo I have owned (no mortgage) for many years. He has been paying all costs involved. I'd like to transfer ownership in the simplest and least costly way possible, but I am concerned about tax consequences. Can we complete the transaction without having to pay for an attorney's assistance? — K. Answer: Transferring ownership, particularly of property that is not mortgaged, is a straightforward matter. A lawyer won't charge much for the relatively simple paperwork. Doing it right in the first place can head off problems in the future. You may have to file a gift tax return, but unless the condo is worth much more than a million dollars, there shouldn't be any actual tax to pay. Your attorney can explain the way gift and estate taxes are related. 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.COM
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