DEAR BOB: As a Realtor, I want to thank you for your recentitem about the drawbacks of cutting home sales commissions below the customaryrate in the community. My specialty is listings. I find working with buyers ismuch less productive (although I make exceptions for good referrals). I’ve beenselling homes for 14 years and will “negotiate” the sales commissionon expensive homes to remain competitive. However, I tactfully tell my sellersif I reduce my commission to 4 percent or 5 percent, the buyer’s agents willshow my listings last only after showing the full-commission listings. Whetherit’s ethical or not, that’s what happens. You might enjoy knowing about arecent full-commission, well-priced listing I had, which didn’t get even oneoffer after 60 days on the market. It’s a beautiful older home but on a verybusy street. I suggested my seller raise the commission from 6 percent to 7percent, with 4 percent to the buyer’s agent. She agreed. I held awell-publicized MLS (multiple listing service) “broker’s tour” with adeli-lunch and got 125 local agents to re-tour the house. Within the week, thehouse sold for nearly the full asking price. Raising the sales commission cansell a house in a slowing market –Sharon R.
DEAR SHARON: Thank you for your insights based on longtimesales experience. Too many home sellers focus on the sales commission, thinkingthey are saving money if they cut the rate.
Purchase Bob Bruss reports online.
But, as the volume of home resales slows in most towns, thehouses and condos listed with reduced commissions usually get shown last toprospective buyers.
Thanks for your example of raising the sales commission by 1percent and calling attention to your listing that resulted in a sale, whichotherwise might not have happened.
HOW TO CORRECT A DEED
DEAR BOB: The deed to our home says “Va and Sid,husband and wife.” How can we correct it to joint tenancy with rights ofsurvivors? –Virginia C.
DEAR VIRGINIA: Depending on the state where the property islocated, a local real estate attorney or title company can prepare and record aquitclaim deed from yourselves to yourselves “as joint tenants with rightof survivorship.”
If you live in one of the 24 states allowing tenancy by theentireties between husband and wife, you will probably prefer that titlemethod. Or, if you live in a community property state allowing it, you might select”as community property with right of survivorship.”
The quitclaim deed must include the legal description ofyour property, the local tax assessor’s parcel number (in most states), and thenotarized signatures of you and your spouse so it can be recorded with thelocal recorder of deeds.
DAUGHTER’S NAME ON TITLE PREVENTS A REVERSE MORTGAGE
DEAR BOB: A few years ago, upon the advice of our attorney,my wife and I (now ages 72 and 75) added the name of our mentally challengeddaughter to our free-and-clear home title in joint tenancy with right ofsurvivorship. She lives with us and has been a real blessing, as she helps withthe cooking and housekeeping. Our other two adult children love her and agreewhen we pass on, she should get the house to sell and provide for her care fromits equity. The problem is my wife and I need to increase our income because myretired pilot’s pension was recently cut drastically. We investigated a reversemortgage and learned it could solve our income problem. However, we can’tqualify because our daughter’s name is on the title and she is under 62. Anysuggestions? –Henry R.
DEAR HENRY: My personal opinion is your attorney gave youvery bad advice to add your mentally challenged daughter’s name to your hometitle. I know he and you meant well, but it tied up the property if she isn’tcapable of understanding. It’s like adding a minor child to a title; they canreceive title, but they can’t convey title.
If your daughter is capable of understanding, she can sign aquitclaim deed to you and your wife, thus removing her name from the title.Then you can qualify for a reverse mortgage and provide for her by amendingyour wills or living trust. If she is unable to sign a quitclaim deed, then acourt-appointed guardian will be needed to remove her name from the title.
A reverse mortgage is ideal for your situation to providelifetime income as long as you or your wife live in your residence. Your homeequity can provide the income lost from your airline pension. More details arein my special report, “The Whole Truth About Reverse Mortgages for SeniorCitizen Homeowners,” available for $5 from Robert Bruss, 251 Park Road,Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internetdelivery at www.BobBruss.com.
SHOULD CO-OWNER PAY THE $15,500 UNPAID PROPERTY TAX?
DEAR BOB: My father and his brother were left jointownership of their mother’s house in 2002. Dad wants to sell the house anddivide the sales proceeds. But his brother doesn’t want to sell. The house hasno mortgage. My father has paid for a new roof and other necessary work.However, the brother doesn’t wan to sell. There are unpaid property taxes ofabout $15,500. The house is scheduled for a property tax sale later this year.If my father pays the $15,500 property taxes, can he obtain full ownership? Isthere any other way he can obtain full ownership? It would be a shame to losethis house over unpaid property taxes –Scott C.
DEAR SCOTT: As a co-owner, if your father pays the $15,500property taxes to prevent loss of the property at a tax sale, he is entitled toa 50 percent reimbursement from his co-owner brother. Also, he is entitled toreceive 50 percent of the roof cost.
But your father is not entitled to receive full ownership ofthe property just for paying the property taxes. However, he can bring apartition lawsuit to force the sale of the property. That is the only legalrecourse he has.
Of course, when the property is sold, then your father willreceive back the 50 percent of the property taxes he paid on behalf of hisbrother, plus half of the roof cost. For full details, your father shouldconsult a local real estate attorney.
WHY UNRECORDED LIFETIME DEED MIGHT BE INVALID
DEAR BOB: You recently had an inquiry from a lady who saidher grandmother deeded real estate to her. The deed was signed and notarized,but not recorded before the grandmother died. The grandmother’s will gave thesame property to her son. In previous articles, you said an unrecorded deedmight still be valid. Why would there be a possibility in this situation theson could get the property based on grandmother’s will? –Jerome G.
DEAR JEROME: The legal issue is whether grandmotherdelivered the deed to her granddaughter conditionally such as, “Here is mydeed, but don’t record it until after I die.”
The general rule in most states is such as conditionaldelivery is void after the grantor dies. If that was the situation, then theson takes title according to grandmother’s will.
This is a classic example why deeds should not be deliveredconditionally to a grantee, such as the granddaughter.
Another problem could arise if grandmother changed her mindand sold the property during her lifetime to a bona fide purchaser (BFP)without notice of the prior unrecorded deed. The BFP would win. For fulldetails, please consult a local real estate attorney.
CAN IMMIGRANT CLAIM $250,000 HOME SALE TAX EXEMPTION?
DEAR BOB: Is a foreign national who has lived three years inhis principal residence — paying U.S. taxes with a Social Security number butwithout a green card — entitled to claim the $250,000 or $500,000 home-saletax deduction? –Gloria S.
DEAR GLORIA: Yes. Immigration status doesn’t matter as longas the foreign national (1) has held title to the principal residence at least24 of the 60 months before its sale and (2) has occupied it for that time. Upto $250,000 principal-residence sale profits are then tax-free for a singlehome seller.
If the principal-residence owner is married, and the spousemeets the occupancy time test but is not on the title, then up to $500,000principal-residence-sale capital gains are tax-free, thanks to Internal RevenueCode 121. A joint tax return must then be filed in the year of the home sale.Isn’t this a great country?
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News
Distributed by Inman News