Ask Realty Times - April 8, 2005 - 4/8/2005 - Real Estate Home House Condo

Ask Realty Times - April 8, 2005
by Peter G. Miller

Answer: No. The lots are in the land records as individual properties. You could sub-divide the lot with the propane tank, but that would be expensive. A better choice -- and a necessary one -- is to immediately have the tank, valves and related equipment checked by a local propane distributor or fire department. Check out Federated Co-ops in Minnesota and Wisconsin -- they have a good general explanation regarding propane safety issues.

Question: I want to buy a house and need a model purchase contract. Can I get one online?

Answer: It doesn't matter whether purchase offer forms are available online or not. First, form requirements vary extensively by location -- in my community you would need a form which tells buyers where they can find local helipads otherwise your agreement might be void or voidable. Second, even if you have the right form you need the ability to complete it correctly. Third, in addition to the form itself, you may need other paperwork, such as disclosure documents.

Please obtain appropriate professional help before going further.

Question: I own a four-plex rental property. I live in one unit and rent the rest. I'm tired of being a landlord, so I'd like to sell this place. If I sell I can buy a single-family home for cash and without a mortgage. People have said not to buy that way, but I don't like paying all that interest. What do you think?

Answer: I think there are several core issues to consider:

 

• What is the market value of the property? Speak with local brokers.

   

• If you sell, what will you pay in taxes on the gain and on depreciation taken or which should have been taken to date? Speak with a tax pro.

   

• Why sell? Would it make sense to refinance, move and buy another property? You would then get additional income from the rental of your unit to cover the larger mortgage.

No less important, let's think about "all that interest." Imagine that you have a $100,000 mortgage at 6 percent interest. Your interest cost would be roughly $6,000 in the first year. Now imagine that you spend $100,000 to pay off the mortgage. You no longer pay interest or get mortgage write-offs -- but the $100,000 used to pay down the loan no longer earns interest or produces other benefits. In effect, there is what economists call an "opportunity cost" for paying down the loan.

Question: We made an offer on a home a month ago. It was lower than the asking price because the home needs a lot of work. The seller did not respond although he kept saying he would counter. Last week we found that another offer was being submitted by third party. We went ahead and made a full price offer on the home. Now the seller still has not chosen an offer. The last we heard was that he was checking to see if he could get the title. He said he could. He said all week he would make a decision that day, the days end and no decision. We have had $1,000 in earnest money tied up for a month.

This is our dream home and we don't even want to look at others. We now have someone interested in our home and don't know what to do. Is there any action or anything we can do to force the seller to make a decision? We really want this house.

Answer: Let's look at where you stand:

First, the seller has responded. The effective answer to your offer is "no."

Second, a seller cannot be forced to counter-offer.

Third, no matter how attractive the home, you need a sale offer which absolutely requires the owner to deliver good, marketable and insurable title.

Otherwise, what have you bought? Please have a real estate broker help you.

Question: Is a seller required to pay for a property inspection? I already did a separate pest inspection, but my brokers wants me to also pay for a home inspection. Isn't this an expense for the buyer?

Answer: A professional home inspection and a termite inspection are different. One is not a substitute for the other.

You could have a contract where the seller, as a condition of the transaction, agrees to pay for a home inspection and a pest inspection by inspectors named by the purchaser. However, in the usual case such inspections are underwritten by the purchaser and for a good reason, to assure that the inspectors are absolutely independent of the owner.

Question: My husband and I are joint tenants in our house. I'd like to change it to Community Property with right of survivorship. Is it easy to do? Does it require a refinance? Must I notify the lender?

Answer: Usually when you change a title the lender has a right to immediately call the loan because ownership of the property has shifted, which means the lender has more risk. However, when it comes to spouses, the federal Garn-St. Germain Act says that in the case of "a transfer where the spouse or children of the borrower become an owner of the property" the lender cannot enforce a due-on-sale clause.

That said, do you even need to change the title? What do state laws say about your rights, given that you are married? For specific advice and paperwork, please contact a local attorney or legal clinic.

Question: I purchased a modest 1500 sq.ft. home in 1999 for $200,000. I'm told that with the market and significant improvements that the home is now worth about $600,000.

I love my property overlooking a valley, quietly tucked away in a private corner with 360 degree views, a small grove, family fruit trees and a garden. BUT I have not been able to care for my home due to illness and I am on a fixed income. With costs going up all the time, is now the time to sell?

Answer: If you sell you would need to consider the question of where you would otherwise live and how much cash you could net from a sale after all costs. As to area home trends, that's a matter best-discussed with local market experts, the real estate brokers who are active in your neighborhood.

Beyond financial and real estate questions, you also need to look at whether your health situation is best served by staying at the property. This is a complex and difficult matter, perhaps your physician or a support group can discuss how other individuals have dealt with similar situations.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.