DEAR BOB: I have owned my condominium since March 31, 2005.But I am interested in relocating in the next few months for career purposes.Someone told me I might be exempt from capital gains tax on the sale of mycondo — although I have not lived in it for 24 months — if I sell for careeror educational purposes. Is this true? –Annmarie S.
DEAR ANNMARIE: If you sell your principal residence due to ajob location change that qualifies for the moving-expense tax deduction, youmay be eligible for a partial Internal Revenue Code 121 $250,000 exemptionbased on the number of months of primary-residence ownership and occupancy.
Purchase Bob Bruss reports online.
However, moving for “educational purposes” clearlydoes not qualify unless you obtain a new job where you attend school. For fulldetails, please consult your tax adviser.
WHAT TO EXPECT WHEN MAKING FINAL MORTGAGE PAYMENT
DEAR BOB: We bought our home 18 years ago with the sellercarrying back the mortgage. We faithfully made on-time payments every month.This December we will make our final mortgage payment. What do we need from theowner for final title clearance to the property? –Susan H.
DEAR SUSAN: Congratulations on making your final paymentafter 18 years of home ownership. Not many mortgages last that long becausethey usually get refinanced or the home is sold.
If a mortgage was recorded against your title, when you makethe final payment your seller-lender should provide you with a Satisfaction ofMortgage in recordable form so you can clear your title of the mortgagesecurity.
If the security instrument was a recorded deed of trust, thelender should instruct the trustee to provide a Deed of Reconveyance inrecordable form, which you can record to clear the deed of trust from yourtitle.
The seller-lender should also return your promissory notemarked “paid in full.”
Because most individual lenders don’t know what to do whenthe final payment is made, you may have to “guide” your seller-lenderto take care of the details properly. For more details, please consult a localreal estate attorney.
BUYER’S HOMEOWNER INSURANCE DOESN’T PROTECT SELLERS
DEAR BOB: I just sold my house and purchased the mostexpensive homeowner’s insurance policy for the buyer. My house is almost 6,000square feet, with many amenities. If anything goes wrong, such as appliances,roof, sinks or showers, can the new owner sue me? My sister and brother-in-lawsold their home “as is” and the buyer had a leak in the garage roofsix months later during a heavy rain. They took my sister and brother-in-law toSmall Claims Court and won. We know there are no leaks in our house. What canwe do to avoid liability to our buyers? –Joey L.
DEAR JOEY: I am very puzzled why you would pay for yourbuyer’s homeowner insurance policy. That expense should be paid by the buyer.That policy won’t protect you after the home sale if you failed to disclose inwriting to the buyers all known defects in the residence.
Your legal obligation at the time of the sale is to providea written disclosure of all known home defects. If a defect later materializes,such as a roof leak, it is then up to the buyer to prove you knew of theundisclosed defect but failed to reveal it. For more details, please consult alocal 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