Solving the 2.1 Mystery by Edith Lank on Creators.com

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Using Stepped-Up Basis Dear Edith: My deceased mother's house has an offer that my siblings and I have accepted. We believe we each will receive about $20,000 after the realty fees. My question is, do I have to pay income tax on the money, since it is my inheritance? …Read more. How to be a Flipper Hi Edith. I'm intrigued by the idea of flipping a house — buying, fixing up and re-selling at a profit. But I have exactly zero experience and no cash. Not exactly a recipe for success. What's the best way to go about finding a flip-worthy …Read more. Holding a Mortgage Dear Edith: I have someone who has asked me to be their mortgagor, and I was wondering, how does one go about the paperwork? Are there standard forms to be used? How does one file the mortgage lien? Would a real estate attorney be advisable or …Read more. Some Estate Planning Dear Edith: Our parents are in their late 80s. Three years ago, they moved from their home to a rental apartment. I moved in to their house and have been renting it from them. My sister and I will inherit it when our parents pass away, but we are …Read more.

Solving the 2.1 Mystery

Every now and then, someone asks, "How come you know all the answers?" And of course, it's because I get to pick what goes in the column.

Now and then, though, something is so intriguing it makes it into the column anyhow. I was curious when someone asked about the difference between a house advertised with 2.1 baths and a house advertised with 2.5 baths. I asked for help in a recent column, and a flood of e-mails set me straight.

It seems, first of all, that 2.1 baths means exactly the same thing as 2.5 baths: The house has two full bathrooms and one half bath. But as quite a few appraisers and Realtors pointed out, "So then what about a house with two baths and two half baths?" Saying it has 2.5 plus .5 baths would seem to indicate three baths. Wrong, of course. But "2.2" would solve the problem nicely. So that dot isn't really a decimal point at all. It simply separates the number of baths from the number of half baths.

Worst in 40 Years?

Ms. Lank: I have a friend who is a real estate agent and insists that the current real estate market is the worst in 40 years. I just don't believe it. I remember the early 1970s in Texas for one. There must be some history on this. — P.S.

Answer: Your friend must have forgotten the early 1980s, when mortgage interest rates reached 17 and 18 percent and lenders wanted 50 percent down. They just didn't have much money available to lend. It was a bad time to be buying one's first home. People did it, though, and of course, they all have long since refinanced to lower rates.

I remember so many savings and loan associations failing then (you're right, many in Texas) that the federal government had to take over. So yes, there have been much worse real estate markets just within the past 25 years. Maybe your friend the agent is too young to remember.

And at any rate, real estate markets vary widely from one area to another, and some places are holding their own quite well.

Selling With Lien

Ms. Lank: We are trying to buy our house from a friend who will hold the mortgage.

The only issue is a small home equity loan against the property that neither of us can pay now. Can we transfer the title with this cloud over it? We both agree to it. — J.C.

Answer: Yes, you can take title anytime you want. The catch is that the home equity loan may be called in when there's a change in ownership. Your friend should read the fine print in the loan documents. If the loan (which is really a mortgage) could be declared immediately due and payable on transfer of title and if you couldn't find the money, you could lose the property to a foreclosure.

Owns Half the Land

Dear Edith: I have a deed for an undivided one-half interest on a piece of commercial land that my ex-husband has covenanted to me. Can I borrow on it or make him buy me out? — X.X.

Answer: It's difficult to place a mortgage on vacant land, and a lender would want the documents signed by all owners. Talk with a lawyer about your right to force a public sale and division of the proceeds.

Sanctuary or Welcome Center

Ms. Lank: I have a question regarding the word "atrium." It is my opinion that the word means a passage. Our church now calls the sanctuary "the atrium." The welcome center is located at the end of the foyer. I believe the welcome center is actually the atrium because it is the passage to the sanctuary. — M.M.

Answer: For the ancient Romans, the atrium was an open-air court in the center of a house with rooms around it. These days, architects use the word for a large open space, often several stories high with lots of light from a glass ceiling or high windows. That description probably fits your sanctuary rather than your welcome center.

Buy Now or Later

Dear Edith: I am looking to buy a small town house or condo and was wondering whether this is a good time or whether I should wait a few more months for an even better deal. — via e-mail

Answer: I'm not familiar with your local real estate market, and even if I were, there's no way I could predict the future. Just keep looking, and soon you'll become such an expert that you'll recognize a good deal the minute one comes up.

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.