Dear Edith: We are buying our first home, and they've set a date for the closing. What should we expect, and what should we look out for? Anything we should do in advance? — H. R.
Answer: If you or the seller is using a broker, that's the person to arrange a last-minute walk-through for you. Perhaps your sales contract stipulates that, but in any event, it's reasonable to request it on your part. You want to see that nothing much has changed since you made your offer — no newly broken windows, any furniture or appliances included in the sale still in place. The house may not be spotless, but you can expect broom-clean condition.
You won't notify the utility companies of change of ownership till after the actual transfer of title — there's always the possibility of something going wrong.
Your email doesn't tell me where you're located, and customs vary widely. In Maine, they "pass papers." In California, they "go to escrow." The process may be called settlement, transfer or closing. If each party is using a lawyer, you may meet in the office of the older one, the county courthouse or maybe just online. In some areas, all the parties gather around a table.
In any case, what happens is:
—The seller proves marketable title (unchallenged ownership).
—The buyer pays for the property. This often involves final settlement with a lender and proof of insurance coverage at the same time.
—Financial details are adjusted between buyer and seller. These might include items like prepaid or unpaid property taxes, water or sewer charges, heating oil left in a tank, or personal property like furniture or appliances being left with the real estate.
—The seller signs and delivers the deed that transfers ownership. Though that deed will then be entered in the county public records office, you become owners at the moment it's placed in your hands. You seize the deed, and your ownership is known by the legal term "seisin."
You'll be handed keys to the house, though you will probably change the locks as soon as you've moved in. And be sure to get remote garage door openers and security alarm codes.
It's been years since I've attended real estate closings, and I'm sure they've changed a great deal in the internet age. It'd be interesting to hear how they're run in different areas. Even in my day, there were big variations in local customs, particularly from one state to another.
More Timeshare Complications
Edith: The reader's comment "But I love the fact that our children will inherit a paid-for timeshare" reminds me I've been meaning to write that timeshares are considered real estate. If a person resides in New York but owns a timeshare in Florida (or North Carolina or Hawaii, etc.), transferring upon death requires probate or administration proceedings in the state where the timeshare is located. — G. C.
Answer: Hope you're not a lawyer, because I'm going to question your statement. Not all timeshares are owned as real estate. Some are organized as leases or "right to use." And even when they're real estate, there may be legal differences in how they're treated.
Home Sellers Tax Break
I used to receive lots of questions about the IRS allowing elderly home sellers to take up to $125,000 tax-free profit (twice that for a married couple filing jointly) on the sale of their principal residence. Since then, the IRS has doubled the amount of tax-free profit to $250,000 (or $500,000 if married filing jointly). The tax break still requires that the owner(s) have resided there at least two of the five years before the sale, but there's no age limit. Here's some of the more delightful reader mail:
Dear Ms. Lank: I intend to move to another state soon and would like to know how to arrange selling my home here to be able to collect the $125,000 the government pays a person with qualification to collect this money. I am over 65 years old and have lived here for 24 years. What is the earliest age one can have this? How is the money given, before or after the move? Or has this been wiped out in our new changes in government? — Mrs. F. D.
Dear Edith: About that $125,000 tax break. When I sell my house, does a broker charge commission on the full sale price or the price after the $125,000 is deducted? — L. U.
Dear Edith: Please send all information you have about that $125,000 tax break. Excuse the handwriting. It's getting worse each year, as my brain cells decrease. — J. C.
Answer: I know just what you mean.
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.
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