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Author Bio:
For the last thirty years, Edith Lank has been sending personal advice on real estate to thousands of her devoted readers. She's used her ...
Read more about Edith Lank.
For the last thirty years, Edith Lank has been sending personal advice on real estate to thousands of her devoted readers. She's used her ...
Read more about Edith Lank.
House Calls: Agent Still Showing
Edith Lank
Ms. Lank: We have accepted an offer on our home, but our agent wants
us to continue to show our house. So, does that mean we can accept
another offer if a higher bid comes in? -- T.C.
Answer: Your agent knows some deals fall through and is trying to protect you in that event.
Whether you'd accept a second offer is up to you. It would have to be from buyers who knew there was already a binding contract, and who liked your house so much they were willing to wait around to see if the first deal failed. Wording in the second contract would provide for that.
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CO-SIGNING TROUBLE
Dear Ms. Lank: My son wrote you about co-signing a mortgage note for a friend and his family. Well, the house is now in foreclosure, due to be sold in three weeks. When it is sold, will the balance of what's owed go to my son and the rest of the co-signers to pay the difference?
My attorney has retired and his partner in that office says not to worry. He's only seen one time in 20 years where the bank went after the difference.
Keep on telling "Don't co-sign!" -- J.G.
Answer: I can only repeat what the lawyer told you: If the foreclosure auction doesn't bring enough to pay off the loan, the lender may ask for a "deficiency judgment" against your son and anyone else who signed that promise to repay the loan. They may not, but in most states, with some exceptions, they could. And, of course, the foreclosure will appear on your son's credit record.
So as you requested, here's my standard warning: When you co-sign a note, you're taking on personal responsibility for the whole debt. And you're being asked to do it because a lending institution judges that your friend or relative is a poor risk.
You don't do anyone a favor by helping them get in over their heads.
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HAS A HUNDRED GRAND
Dear Edith: I am a college student. I have a separate bank account my parents made for me that has a bit over $100,000 in it. I was wanting to invest in buying a foreclosed two-bedroom apartment in Florida, probably Miami, to most likely rent out. Would that be wise or not? -- e-mail
Answer: Buying real estate is not like buying stocks or bonds -- where all you have to do is read the financial pages to see how you're doing, and where you can get out at a moment's notice if you need the money for grad school or starting a business. Being a real estate investor is a career, and you can't do it off-hand. Do some studying first. Go to the library or book store and start now.
Here are just a few things you'd need to know before you bought an apartment. How healthy is the financial situation of the overall apartment complex you're considering? Are nearby apartments also in foreclosure? What's the rental market like in that neighborhood? Would you be looking for seasonal or year-round tenants? How much could you reasonably expect in rental income? How does that compare with the amount you'd invest? What would other expenses total? Would you be paying for professional management or will you be living nearby? Have you run the figures past an accountant?
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WILL THEY CALL THE MORTGAGE?
Hello: Both my Mother and Father are deceased. I have been willed everything. I am an only child. I and my family are living in the house my parents left me. There is a mortgage. I can and have been making the mortgage payments, but due to past credit problems, I can't qualify for a loan.
Is it likely that they will call the loan in and foreclose, or let me continue to make the payment until I can straighten my situation out? Also, how should I go about transferring the home into my name? -- J.
Answer: Lenders don't call a mortgage loan when a family member inherits property. But when anyone dies, a lawyer should always be consulted, no matter how simple the estate, just to make sure nothing needs doing. You may not need much of anything, but do double-check with an attorney to save bother in the future.
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DEDUCTING THE INTEREST
Ms. Lank: If my son provides mortgage financing to me, is the interest I pay him a tax deduction acceptable to the IRS? -- D.M.
Answer: Yes. If the mortgage is entered in the county's public records in the normal fashion, you can deduct the interest you pay. Your son, of course, will declare it as income.
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Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.
Copyright 2009 Creators Syndicate Inc.
This news arrived on: 11/15/2009
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Posted Comments:
11-13-2009 03:38
w s roth wrote:
house sale
The small house sits on 3 plus wooded acres 2 miles up a dirt mountain road on a dead end land. It would make an ideal hunting lodge to share b/w club membrs. Money from the sale of timber, rental income or dues could offset prop taxes. Ideally I could remain as groundskeeper/property manager or house sitter staying at my neighghbor's cabin or son's house during scheduled events.
11-13-2009 03:24
w s roth wrote:
house sale
having filed for divorce, I will need to try to sell the house in which I've lived 3 yrs taking full financial responsibility which I cannot continue on my disability after my son moves away from home this winter. My husband's neglect of maintenance for 5 or 6 yrs and damage caused by improper restraint of dogs & puppies digging rocks from retaining wall & not replacing & misuse of property neglect of warped & rotting siding, roof that has leaked into bedroom causing ceiling to sag kept me from mortgaging the house after transfer of deed from his name to mine and escrow of tax & ins to lower monthly pmt by $130-150 from the $445 equity pmts on loan borrowed to replace roof & pay back taxes allowing me to afford to live here alone. without the roof the mortgage wouldn't be approved so I may have trouble selling with a tarp covering the roof.
Is it legal to sell the property in a contest where entries cost $500 or 1,000 & essay on why I deserve a home of my own. This might improve my chances of getting a price to cover the loan bal releasing me from that debt which he willnot pay, having enough to move on, get a car, & have enough to repay my son a portion of his contribution over the last decade. It is appalling to have taken y son's paycheck for lifeguarding, work study, & grant money which is why I'm fighting for a fair settlement so I can make sure his father doesn't come out financially set when my son & I paid the bills his father racked up in unpaid debts, finance charges, fines, & bad investments. Working continually while trying to put himself through school, while he & his fiance should have been saving for their own future. Nothing would make me happier than a chance to hand them a check for $15-20,000. But I need to get a fair price.
Is it legal to sell the property in a contest where entries cost $500 or 1,000 & essay on why I deserve a home of my own. This might improve my chances of getting a price to cover the loan bal releasing me from that debt which he willnot pay, having enough to move on, get a car, & have enough to repay my son a portion of his contribution over the last decade. It is appalling to have taken y son's paycheck for lifeguarding, work study, & grant money which is why I'm fighting for a fair settlement so I can make sure his father doesn't come out financially set when my son & I paid the bills his father racked up in unpaid debts, finance charges, fines, & bad investments. Working continually while trying to put himself through school, while he & his fiance should have been saving for their own future. Nothing would make me happier than a chance to hand them a check for $15-20,000. But I need to get a fair price.
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