Dear Edith: My brother and sister and I inherited our paid-up family home. The deed lists us as "tenants in common." Now our sister lives in the property while our brother receives no benefit.
Can we force a sale? If our sister doesn't want to move or show the property, what can be done?
If one of us were to die, who would own our share? Will it be the others, or could we will our shares to our spouses ? — K. W.
Answer: Any one of you can petition for a court-ordered sale at public auction (a "partition"). Your sister would be free to bid, as would you. Unfortunately, such a sale usually requires an all-cash buyer and seldom yields full market value.
At death, the share of a tenant in common goes to that person's heirs. The other co-owners do not have the special right of survivorship you ask about.
Wants to Walk Away
Dear Edith: I have a first mortgage on my house with a bank here. What would happen if I were to send a letter to the bank saying I don't want to repay the money and, therefore, it could have the house? — P. I.
Answer: Obtaining a mortgage loan and then walking away from it is not the way to go. Your credit rating would be battered. The lender could seek a judgment against you if a foreclosure sale were to not bring enough to cover the debt, accumulated interest, back taxes and legal costs. You'd find it almost impossible to ever get a mortgage for a property again.
How about calling several nearby real estate firms to tell them you are ready to let your property go at a discount in return for a quick cash sale — maybe just enough to pay off the loan? Most brokers have buyers waiting in the wings for such deals. Some brokers are even ready to buy such property for themselves at wholesale, without charging commission.
Owning Two Homes at Once
Dear Edith: We recently moved to a new town and are renting an apartment. We are interested in a house in the area, but our old house hasn't sold yet.
We could handle two mortgages until our old house sells and then take the cash we receive and pay down our new mortgage to reduce our monthly payment. Are there any other options? — C. C.
Answer: To start with, making a lump sum payment on your new large mortgage wouldn't reduce the monthly charges at all. It would simply shorten the time remaining.
It's better to attack the problem at the other end by reducing the price on your old house in return for a prompt sale. Figure how much it would cost to carry the second mortgage for six months. Then, since you're evidently prepared to lose that amount, drop the price on the old house by half that sum, and drop it again every two weeks for as long as it takes.
That should bring you a buyer for a cleaner transaction and fewer sleepless nights.
Making Extra Payments
Dear Edith: I bought my house directly from the owner and am making payments to him. We each have an amortization schedule.
If I want to pay an extra amount against the principal, how do the owner and I record it? Can he refuse to accept the extra amount on the principal? — F. R.D.
Answer: Your mortgage document should state whether you can make extra payments or not. Talk with the seller directly, and explain what you want to do.
If you have an amortization schedule, it's easy. Just send — separately —the principal portion only of the next payment that would be due. Then cross that payment off your schedule, and move down to the one after that for your next regular payment. Make sure the seller consents and understands what you're doing. Note on the schedule when each full payment (or extra principal payment) was made.
If your schedule numbers the payments or lists the month they're due, note on the schedule when each full payment or extra principal payment was made. That will help your and the seller keep your records matching.
Every now and then — certainly at the end of the year — check with the lender to make sure you agree on how much debt remains, and exactly where you are on that schedule.
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.