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Ask Realty Times - January 23, 2004
by Peter G. Miller
Question: Our home is appraised for $239,000. It has been for sale for eight months with three brokers and we have dropped the price three times. There have been two open houses and three showings. We need to sell. What can we do? Answer: Are most other homes in your community selling in shorter periods? If yes then there is something about your property which needs to change. You've tried different brokers and different prices, but what about condition? Does the home show well? Does it need repairs or sprucing up? What often works is to change the offer terms: For instance, instead of reducing the price from, say, $239,000 to $232,000, offer it for $239,000 with a two percent credit to the buyer at closing. In this situation the buyer will receive $4,780 at settlement -- the very time when buyers usually need cash. Ask your current broker to review sales in your community during the past six months, take a look at those properties, and then consider how you can make your home more attractive. Question: I'm currently making some renovations to my home but haven't bothered with any permits. These renovations are mostly minor (re-roofing the detached garage, moving some plumbing and electrical during a bathroom remodel) and I've done all the work myself. I've been sure to do everything to code per our local ordinances and have checked my work with friends who are also contractors. When it's time to sell the house how much do I need to disclose? Answer: Travel across the country and you can find hanger-like hardware centers in every community. It's plain that a lot of do-it-yourself work is both permissible and encouraged. That said, some repairs DO require permits and some should NOT be done by typical homeowners. Contact your local building inspector, explain what you've done and ask if any permits are required. If yes, get an inspection and hang on to the permits for when you sell. If no, when you sell provide a written statement showing what you've done, that you contacted the local building inspector (keep records to verify) and that no permit was required. That's as much as anyone can do in terms of disclosure. From that point forward the buyer is on notice that you have made repairs and can have their home inspector take a look. In the future, call the building inspector first. They can assure that work is safe and help you comply with local rules. Question: What happens when a co-op pays off its mortgage? Answer: If a co-op has an underlying mortgage then repayment is a cost of unit ownership. Example: You have 100 units and a $2 million mortgage with a yearly expense of $160,000 for principal and interest. Dividing 160,000 by 12 months equals $13,334 per month. Each of the 100 units would pay $133.34 a month to cover the cost. If the underlying mortgage was paid off then that particular expense would no longer exist so monthly fees for this item would end. As well, if you are no longer paying interest for the underlying mortgage then you will have less to deduct at tax time. Question: My father was supposed to close on a house in two days and was told yesterday that the house is currently in probate court. Is it the real estate agent's responsibility to find out if a house is currently in probate. His real estate agent is telling him that the seller's agent asked, but was not told that the house was in probate. Answer: When a home is listed brokers must use caution to assure that the party signing the agreement actually has the right to sell the property. Thus, for example, with a married couple a broker will want both spouses to sign the listing agreement, not just one. Your father needs to contact an attorney immediately. There are at least three issues here: First, is court approval required for a sale? Second, who owns this property? Third, who signed the listing agreement -- and what was their authority to do so? Question: What is the status of the proposals to make payments for private mortgage insurance (MI) tax deductible? Answer: The measures have not been passed to date, but some in the industry believe passage will occur during the next several months. Senate bill S.846 is sponsored by Sens. Gordon Smith (R-OR) and Blanche Lincoln (D-AR) while the House bill, HR.1336, is sponsored by Reps. Paul Ryan (R-WI) and William Jefferson (R-LA). Question: I bought an undeveloped 75x150 lot. The tax assessment on it is $9,000. I have gotten several offers for $4,000 to $5,000. I paid $6,500 for it in 1997 and since then have paid taxes and sewer charges. Am I getting a fair price for this property? Answer: Imagine that you were a buyer. Would you care what the owner paid? Not at all. Before selling you need to determine the market value for the property. It is possible the value has fallen, thus explaining the offers you've received. Your first step should be to speak with local brokers in the community where the property is located.
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