DEAR BOB: Can we fire our real estate agent? We (and fourothers) are in the process of selling our property to a commercial buyer. Ouragent never shows up for meetings and is so out of the loop. He calls us to seewhat is going on with the sale. We don’t think he deserves the 6 percent salescommission because his involvement ceased after finding the buyer. We want tofire him, or at the very least, cut his commission. Can we do that? –HarrisonY.
DEAR HARRISION: No. If your real estate agent has a validexclusive right to sell, exclusive agency or open listing and he or she is the”procuring cause” of the sale, or found a “ready, willing andable” buyer, but you owners took control after that, the agent is stillentitled to the agreed 6 percent sales commission.
Purchase Bob Bruss reports online.
When the sale closes, if you refuse to pay the full salescommission, the listing agent can sue for any unpaid commission. Just becausethe agent doesn’t attend meetings of the sellers is no reason to deny a salescommission for producing an acceptable buyer. For more details, please consulta local real estate attorney.
PERSONAL HOME PURCHASE WON’T QUALIFY FOR TAX DEFERRAL
DEAR BOB: Can I use Internal Revenue Code 1031 dollars tobuy a home to live in? It is a two-family house. What are the mechanics of taxdeferral? –Linda Jo E.
DEAR LINDA JO: If you own a rental property and want toavoid paying capital gain tax upon its sale, you can only make an InternalRevenue Code 1031 tax-deferred exchange for another investment or businessproperty of equal or greater cost and equity.
If you use part or all of the sales proceeds to buy yourpersonal residence and don’t use the entire amount to acquire anotherqualifying “like kind” property, you will owe capital gains tax onthat portion of your capital gains that you receive from the sale. For details,please consult your tax adviser.
WHO MUST PAY EXPENSES OF A JOINTLY OWNED HOUSE?
DEAR BOB: Three siblings are tenant-in-common co-owners ofour family property. One sibling put in a large amount of personal money toimprove the property. Two siblings don’t want the property. One wants to keepthe property. She is negotiating to buy out the two-thirds shares. How shouldthe buyer be compensated for her personal expenses for the improvements? Whopays to cure the problems found during the pest inspection and professionalinspection of the whole house? –Mr. C.G.
DEAR MR. C.G.: Real estate co-owners are obligated to pay inproportion to their ownership shares for ordinary and necessary propertyexpenses such as mortgage payments, property taxes and necessary repairs. Thatmeans all three co-owners are obligated to pay for the pest control repairs andthe professional inspection.
If the property improvements made by one co-owner weren’tnecessary or agreed to by the other co-owners, that individual might not beentitled to reimbursement. However, if the improvements added to the propertyvalue, it is the right thing to do for the other two owners to pay theirone-third shares. This can all be worked out in the buy-sell agreement. Forfull details, please consult a local real estate attorney.
The new Robert Bruss special report, “Five Easy Ways toBuy Your Home and Investment Property for Nothing Down,” is now availablefor $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit cardat 1-800-736-1736 or instant Internet delivery at
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News