Ask Realty Times - October 7, 2005 by Peter G. Miller
Question: How do you respond and handle a bitter, vindictive, angry, negative, sarcastic, lonely, unhappy, rude, unpleasant and snotty seller whose townhouse I have had listed for the past two months and who appreciates nothing that I do to market his unit? He sends me bitter, nasty e-mails every few days about his house not selling when it is over-priced and he frightens off brokers with his rude comments. He does vacate the place most of the time and then complains constantly when a broker is a little late or won't call me back with feedback. He calls brokers for feedback and then they don't want to call him back. He is very demanding. Any ideas for me? Answer: Yes. Why did you list a property that you describe as "over-priced"? After two months, why shouldn't the seller expect results for a marketing price you accepted? Sellers naturally want feedback when a home is shown. That's not unreasonable and if information is unavailable then an owner may feel frustrated. And when brokers are late, that can be an inconvenience to owners. Your situation isn't working. The next time the seller complains, offer an out: "You know Mr. Smith, despite my best efforts I feel that I am not meeting your standards for service and performance. Perhaps it would be best to end our listing agreement now so you can engage another broker." Question: My neighbor is in the process of purchasing the house that he currently rents. The landlord, who is not using a broker, has told my neighbor that he wants to retain mineral rights to the property! Can a seller make such a request? Doesn't an area have to be zoned for mining in order to ask for such a request? We would really like our neighbor to be able to purchase this property, but he is now feeling very discouraged and frustrated. What can we do? Answer: Sellers can ask for whatever they want -- it doesn't mean they get it. The property is worth a whole lot less if sold with the perpetual prospect of someone digging through the basement in search of coal, gold, oil or whatever. To some buyers, the property is not worth consideration in a marketplace where other homes are for sale with better terms. Since your neighbor is in the "process" of buying this property, does this mean there is a written sale agreement? Is the seller attempting to modify the terms? If yes, a modification requires both parties to agree. While the seller may not want to use a broker, that does not mean the purchaser must follow suit. If the buyer has a serious interest in purchasing this property, then a buyer broker or an attorney should be consulted. Question: Do you know where I can find a new mortgage? I currently have a $225,000 loan. My payments are $1,800 a month at 8 percent interest. The property is worth $245,000. My monthly income is $1,200. I need to lower my housing costs. Answer: Unless your income increases radically and quickly you need to sell the property, rent rooms or rent the entire property. Otherwise, foreclosure looms in your future. There are "option" and "flexible" loans out there which allow you to pay less than the real cost of financing for several years -- but the money not paid each month is added to the loan balance. In time monthly payments will rise significantly or the loan must be paid off. If you can't make the monthly payments or sell the home to cover the debt you will have massive financial problems. However, given that your income is not sufficient to meet current mortgage costs it is unlikely that you can qualify for option financing. Still, you might want to speak with lenders. Question: On our good faith estimate for a refinance, we are being charged a "Broker Administration Fee" of $595. Is this excessive? The "Processing Fee" is $665, and I was told by a friend it shouldn't be any higher than $400. Do you know if that's true? Answer: Here's what's true: The world has lots of lenders. If you don't like Smith, see if Jones or Green or Williams offers a better deal. Question: On the good faith estimate some of the items payable in connection with the loan are categorized as "PFC" and "POC." What do these letters mean? Answer: "PFC" means a "prepaid financial charge" such as points or the cost of a tax service. "POC" means an item "paid out of closing" such as the cost of a credit report or termite inspection. Question: I have a broker who I feel isn't doing a good job selling my home. Am I allowed to hire a new broker and can I sell the home myself without paying a fee? Answer: Before doing anything you need to see what the listing agreement says. Does it allow you to withdraw from the agreement at anytime and without penalty? Also, what type of listing agreement do you have? For instance, with an "open" ("general") or "exclusive agency" listing you could sell your home directly and not pay a fee. With an "exclusive right to sell" agreement you would owe a fee even if you sold by yourself during the listing term. However, what's really important is getting the property sold. Speak with the broker. What is the marketing plan? Is it being followed? What else can be done to market the property? How is the local market and how long should it reasonably take to sell a home such as yours? Many brokers will allow owners to withdraw from a listing agreement without penalty while others will seek reimbursement for their hard costs. However, attempting to sell by yourself or retaining another broker may not produce better results -- reason enough to speak with the current broker. Question: I have a mortgage and am a home owner. It's my name on the mortgage. I will be sharing my home with someone who wishes to put money into the home as well. We will then share monthly payments (50 percent each) going forward. At the start I will have about $150,000 (75 percent) of the equity in the home whereas she will add about $50,000 (25 percent) to the equity. It's really a cohabitation type of arrangement. How can I document what is mine and what is hers, in the unlikely event of a parting of ways? Answer: Since half of all marriages fail it is proper to assume that instances of cohabitation can also conclude unhappily. Essentially what you want to create is an arrangement that reflects your individual contributions to the property and provides a mechanism to terminate mutual ownership. You may want a "tenancy in common" with a right of survivorship and a right of first refusal if one party wants to sell. State rules vary enormously on these issues. You must have an attorney draw up a proper document. You should each get wills and living wills. Also, you need to determine if a change in title will require new financing for the property and how tax matters are to be handled. Question: We agreed to a new home construction contract for approximately 1,680 square feet of living, heated space. This was an agreed upon reduction of 16 square feet from our house plan of 1,696 which was filed with the local government. However, the Veterans Administration appraiser determined we only had 1,619 square feet of living, heated space. The builder re-calculated and determined we had 1,629 square feet of living, heated space. We feel that we should not have to pay for square footage we do not have (50 + less than the contractual agreement). Are we right? Your opinion please. Answer: My opinion is that no, you must pay. Here's why: You explain that the property was to have "approximately 1,680 square feet of living, heated space." The magic word is approximately. In effect, everyone understood going in that the square footage figure was an estimate. You obtained an appraisal which gave you a square foot figure. However, you might get a different answer from an assessor and you plainly got a different answer from the builder. Why? The "generally accepted" standard is just that, generally accepted but not always used. For instance, Protocol Z765-2003 of the American National Standards Institute (ANSI) provides one way to calculate square footage -- but this standard is voluntary. "The square footage standard is offered for voluntary application," says the NAHB Research Center. "It must be applied as a whole, and is not meant to replace or supersede any legal or otherwise required existing area measurement method. It may be used in proposed, new, or existing single-family homes of any style or construction, but is not applicable to apartment/mutlifamily buildings, and does not cover room dimensions." Lastly, imagine that the builder or appraiser calculated 1,725 square feet -- would you volunteer to pay more?
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