House Calls by Edith Lank

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: You're right to take precautions before you start paying off someone else's debt.

You want written assurance that the owner won't put more mortgages on the house, that property taxes will be kept up-to-date and that you agree about who will make repairs. You need a binding agreement that you can buy, for what price, when and on what terms. You need an understanding about what happens if you later change your minds and want to back out, or if the seller backs out.

Unless that happens to be an assumable FHA or VA mortgage and you can qualify to take it over, you'd have to find financing elsewhere when you were ready to buy. What if you couldn't get a loan at that point?

Where real estate sales are concerned, oral promises are not binding. Your lawyer will know what should go in your signed contract.

ON THE MORTGAGE

Dear Edith: What does adding my son's name to the mortgage do? Does he become part owner? — V.

Answer: If your son signs a promise to be responsible for your mortgage, that makes him personally liable for the whole debt, just as you are. It does not change the ownership of the property. The real estate is still owned by the person or persons named in the deed.

RENT OR SELL

Ms. Lank: We (three siblings) own an inherited house in another state that is rented, but will be vacated soon. My brother is interested in selling to an interested buyer without a real estate person involved. I think keeping the property as investment income might be better. The market will begin to reflect increased value in homes, right? What would you suggest? — K.D.

Answer: I don't know your financial situations, how much trouble it is to keep the house rented, whether any of the others live near enough to keep an eye on it, how long it was rented, what the tax consequences of a sale might be, or what the third sibling thinks.

I don't know what the real estate market will do or how you'd come out if you sold and put the proceeds into other investments. On top of all that, if you haven't tested the house on the open market, I don't know whether the proposed sale price is in line with market value.

Sorry, but you'll have to figure this one out for yourselves.

CONDO TAKING TWO YEARS

Hi Edith: I'm selling my condo. While no one has a crystal ball, I'm worried that it will take two years to sell. Is that possible? The average time on the market here is six months (apparently), but some properties are on the market for one year! — e-mail

Answer: Properties that take a year to sell are priced at more than the buying public thinks they're worth today — and that's the only opinion that counts. You'll just have to find a price level that will attract interest.

GETTING INTO REAL ESTATE

Dear Edith: I lost my job of 14 years due to layoffs. Do you think real estate is a profession to get into at this time? I have desired to enter this profession for years. I have read numerous books and attended a few seminars. I would really like to go to school to learn the business. — e-mail

Answer: Like every other business, real estate brokerage is hurting these days. But for someone who is really interested, like you, it's certainly worth trying. You have nothing to lose. You can take the required courses, pass the state exam, get a license, and start working with an experienced broker, even if you're job-hunting or taking on part-time work at the same time.

TENANTS WON'T PAY

Ms. Lank: I own a house in another state. The tenants send two or three months of rent and then stop. I send them a letter, they pay for a month or two and stop again. I am tired of writing letters to them. What can I do? — P.

Answer: You can hire a lawyer out there to evict them before they get so far behind they won't even try to catch up. Then check credit reports next time you select tenants.

Better yet, put the place on the market with a local agent out there. You sound pretty amateur to me. Even for someone with landlording skills, managing out-of-town property is difficult.

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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