House Calls by Edith Lank

Hi there. We had offered on a house, and the seller countered with 10,000 less. It had gone back and forth, and finally the seller had made a counteroffer we accepted within the hour. But the seller has now shown the house to more buyers, and they are entertaining a new offer. They are treating our offer and the next offer as competing offers. Is this legal? — Via e-mail

Answer: If that final counteroffer was in writing, and if you accepted it in writing, and if the seller was notified you had done so, it sounds as if you have a binding contract. Consult a lawyer promptly, preferably one who specializes in real estate.

If, on the other hand, the negotiating was oral, you can't hold them to anything they said. In the sale of real property, nothing counts unless it's written.

Cap On Closing Costs

Dear Edith: If we negotiate the seller to pay our closing costs, is there a cap as to how much the seller can pay? In other words, can we negotiate them to pay all closing costs or by law can they only pay up to a certain percentage? — D. and J.S.

Answer: Seller contributions are limited not by law, but by the particular mortgage plan being used. The FHA, for example, allows no more than 6 percent of the purchase price.

Tax Break For Refinance

Dear Edith: I'm in the process of refinancing my home. Friends say wait because there is a tax break coming out for new homebuyers. This is my first home, but I owned it for six years. Will this new policy help me and when does it come into effect? — R.

Answer: The new federal tax credit of up to $8,000 is already in place, but it is for first-time homebuyers and has nothing to do with refinances.

Polish Or Remodel

Dear Edith: My husband and I are preparing our home for the real estate market. I believe we should just paint, polish and primp (i.e. make all clutter go away). He would like to do major remodeling in the kitchen and bathroom (i.e. $20K), which, in my opinion, does not need it and it's money we can ill afford to spend. Can you point me in the right direction (for an unbiased professional opinion) or give me an idea on who to consult on this matter? — S.F.

Answer: I don't know the price level in your neighborhood, nor do I know the condition of your home.

It's often unwise to invest much real money in preparing a house for the market — a doll-up has the best payback. But as I say, I can't judge your particular situation.

Who to consult? It won't cost anything or obligate you to call three nearby brokerages and ask them to send someone over. It's a good way to start meeting agents. Even if you don't intend to use a broker, you'll end up with useful information. They'll have price recommendations, and more important, they'll be able to judge how much it would be wise to spend on improvements at this point. Any agent familiar with your neighborhood can give you advice much more valuable than mine. They know buyer expectations for your street and the price limit for your area.

Starting In Real Estate

Dear Ms. Lank, I want to be in the real estate business. How do I start? I am 23 and the only capital I have is a dream. I need to know everything (selling, buying, mortgages, investing, taxes and legal). — Via e-mail

Answer: Those are exactly the topics covered in the course of study the state requires for beginning agents. It doesn't sound as if you're looking for a license. Just the same, taking that course will give you just the background you need. You can inquire at a Realtor association or any brokerage to find out where classes are offered.

Offering On Two At Once

Mrs. Lank: My daughter's real estate agent is advising her to put offers in on two homes at the same time. What happens if, by chance, they are both accepted? I told her to only submit one offer, with a three-day window. Then she can make an offer on the other home if she wants.

Is an offer to purchase, if accepted, a binding contract? Is it safe to make two offers on separate homes at once? — C.

Answer: No, it's certainly not safe. Your daughter could be caught in a real mess if both offers were accepted. Yes, they'd constitute binding contracts. That real estate agent should be reported to the managing broker in charge of his or her office. I hate to think an experienced broker would give dangerous advice like that.

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.

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