Buy out real estate partner in a slow market

DEAR BOB: I own 50 percent of a property with a partner. InFebruary 2006 we hired an appraiser who valued the property at $295,000. Butwith the recent change in the local real estate market, only three comparableproperties sold nearby in the last six months for an average of $260,000. Whatwould be a fair price to offer to buy out my partner? –Liliana F.

DEAR LILIANA: From your description of the situation, if therecent sales of those nearby properties are comparable to yours, it sounds likea fair buy-out price would be 50 percent of $260,000, minus any debts such as amortgage or unpaid property taxes. Or you and your partner might want to hirean appraiser to make a new appraisal.

Purchase Bob Bruss reports online.

LOCK IN BARGAIN HOME EQUITY CREDIT LINE INTEREST RATE

DEAR BOB: I have a $30,000 home equity loan, which I use forhome improvements. Currently, I am paying 8.5 percent interest and haveborrowed $3,800. But I received a mailer from the lender offering to lock in6.9 percent interest. However, the minimum amount must be $4,000 or more. Thatwill mean my monthly payment will increase. I will soon need another $4,000 toreplace the roof. How should I think about this? –Nancy C.

DEAR NANCY: That 6.9 percent interest locked-in rate is muchmore attractive than the 8.5 percent interest you now pay. Why not borrow theadditional $4,000 for the new roof and lock in 6.9 percent interest on the entireamount? That sounds like a bargain for a home equity credit line.

TAX ASSESSOR’S LOT VALUE MIGHT BE TOO HIGH OR TOO LOW

DEAR BOB: About 20 years ago, my husband inherited twoFlorida lots from his parents. Until the last few years, the market value wasaround $8,000 to $10,000 each. Since then, their value has increasedsignificantly. We constantly receive solicitations and offers to buy the lots.According to the property tax assessments, each lot is worth around $32,000.But we have never actually seen these lots. Now that college expenses arequickly approaching for our children, we are trying to decide if it would bewise to sell these lots. What is the best way to handle this by long distance?–Melissa H.

DEAR MELISSA: Take the money and run! However, beforeselling you should visit the lots and talk with local real estate agents whosell similar properties nearby. Or, you might want to hire a local professionalappraiser to give you an unbiased answer about their market value.

The local property tax assessor’s valuation might beaccurate, based on similar recent nearby lot sales. Or it could be too high ortoo low.

The situation you describe is not a do-it-yourself salesproject. Considering the low value of the lots, paying the customary realty agent10 percent sales commission for vacant lot sales could be a great investment toget rid of them after you learn their true market value.

The new Robert Bruss special report, “How to Sell YourHouse or Condo for Top Dollar in a Buyer’s Market,” is now available for$5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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