The804.com–Richmond VA Real Estate Blog

Washington Post: Bob Bruss

• Due to illness and unemployment, we have fallen two months behind on our mortgage payments. My husband is now back at work and I’ve taken a part-time job to help with the bills. After sending us several threatening letters and even making a phone call, the mortgage company filed foreclosure about three weeks ago. They say we are three months behind in payments. But we’re really only two months behind. When I phone the lender, I get put on endless hold waiting to speak with a supervisor. We are starting to receive letters from investors who want to buy our house and other lenders who want to refinance our mortgage. But we have a low-interest-rate mortgage that we want to keep. One investor, when he discovered we don’t have much equity, said he didn’t want to buy our house. The lender is out of town so we can’t visit the lender’s office. What should we do? Do we need a lawyer?
• I sold my home in December 2004 and was recently sued by the buyers for $700,000 for alleged nondisclosure of defects. I don’t understand how the real estate brokers have no liability even though no conversation ever took place between buyer and seller.
• Some time ago I recall a question in your column about an elderly husband and a much younger wife who owned their home together. You said the only way to get a reverse mortgage was for the young wife to sign a quitclaim deed to her husband. However, presuming he dies first, won’t that mean the reverse mortgage then comes due and the young wife will be left with the house but no way to keep it?
• My sister, 10 years older than me, thought she was helping by adding my name to her condo title as “tenant in common with right of survivorship.” When she needed full care and had to move to a convalescent home, I forgot about removing my name from the condo title. Now there is capital gains tax to pay on the condo sale. Since she died and wasn’t able to claim the $250,000 home-sale tax deduction, why can’t the survivor claim it? I hope I have done the proper thing by placing my own home into a revocable living trust.
• Please tell me we didn’t make a major mistake. In August my only daughter got married. My new son-in-law was just getting out of the Army and didn’t have any assets. My daughter was almost as broke as he was. At the wedding reception, my wife and I gave them a free-and-clear rental house we owned. It was worth approximately $500,000. Of course, they were thrilled and all the wedding guests were amazed. However, I have now been told we must pay a federal gift tax on the $500,000. Is this true?
• You said most real estate agents believe weekend open houses don’t sell homes. I disagree. I’ve been an agent about eight years and I hold an open house for one of my listings almost every Sunday afternoon. Of the 43 Sunday open houses I held in 2006, I sold all but 11 of those houses as a direct result. Agents who say open houses don’t sell homes are wrong.
• Our dad left his house to us, his four daughters. We own it free and clear. We plan to keep the house as long as we can afford to do so. The land is very valuable. What happens when one of us dies? Should the remaining sisters have the right to buy out the deceased’s share? Another question involves our cost basis. Dad added each of us to his deed at different times. We think that means we each have a different cost basis. Is that correct?
• My husband owned 50 percent of our house in his revocable living trust. I own the other half in my revocable living trust. He died last March. I inherited his half of the house under his living trust without probate. Do I need an appraisal to prove my stepped-up basis?
• My husband and I own a house worth about $750,000. We need a reverse mortgage to help with expenses. But FHA and Fannie Mae will give us at most a $61,402 lump sum or $400 per month. I am 68 and my husband is 71. These amounts seem extremely low. What should we do?
• My husband and I own five rental houses together. We are very happy you encouraged us, years ago, to invest in rental houses. Because we made extra mortgage principal payments, two of the rental houses are now free and clear. The others will have their mortgages paid off in a few years. We now enjoy the positive cash flow from the rentals. Meanwhile, the houses have appreciated at least $100,000 each in market value. My husband recently had a close call with a heart attack. He had a bypass operation and is now in good health. But it made me think about the many stepped-up basis questions you answer. Is there any limit to the number of properties for stepped-up basis?
• For tax and Social Security reasons, I am not married to the lady with whom I have been living for the last nine months. We live in her house. As she has limited income, I have been paying the mortgage and property tax payments. Can I deduct the mortgage interest and property taxes on my 2006 income tax returns?
• Some time ago you mentioned that there were two trees on your neighbor’s lot that were leaning toward your house. Fortunately, your neighbor removed those trees before they fell on your house. My problem is similar, but my neighbor isn’t so nice. She refuses either to remove her dangerous old tree, which is sure to fall on my house in a windstorm, or to let me pay to have it removed. (The estimated cost is about $650.) As you suggested, my insurance agent wrote her a letter explaining that he had viewed the tree and took pictures to show the danger. He warned her that if my homeowner’s insurance has to pay a damage claim from her falling tree, my insurance company will sue her in subrogation (whatever that means) for her negligence. Is there anything further I can do? I really don’t want a tree falling on my bedroom.
• My husband and I want to give our daughter and son-in-law $100,000 to buy a house. To avoid paying a gift tax, we suggested putting our names on the title, strictly as a formality. My daughter’s husband does not agree. He suggests we lend them the money and then forgive the loan. Is this a good idea?
• We own a rental beach house that we plan to sell next summer. It is worth at least $300,000. If we use that money to pay off the mortgage on our primary residence, can we avoid paying capital gains tax on the beach house sale?
• I am in the process of obtaining a divorce. I was awarded the house in lieu of child support. I filed for change of name on the deed. When I eventually sell the house, is my cost basis the original purchase price or am I entitled to a stepped-up basis as of the date of the new deed?

Seattle Times: Elizabeth Rhodes

• After the big windstorm, tenants who live in my rental house cleaned up several large branches that fell onto a power line. They did this without consulting me and want to be reimbursed about $1,000 for the work they did. What are my rights and obligations as a landlord?
• The windstorm blew down a big tree in my yard. Besides paying for removing it, shouldn’t my insurance company compensate me for the value of the tree?
• Because of the storm, my apartment didn’t have any power for three days, so I had to stay in a motel. Shouldn’t my landlord reimburse me for the cost of this, as well as for all the food I had to throw out?

San Francisco Chronicle: Robert Griswold

• My sister and her husband are about to sign a lease on a two-bedroom apartment. The lease requires them to have insurance for the contents of the residence.
• I am a new landlord of a single-family home. The lease states that the tenant shall pay the first $25 of any charge for repairs by a service person, but a friend told me this is not legal. I have this clause in my lease so that the tenant will know they will be responsible if they damage anything in the house. Please let me know if this charge is appropriate.

Milwaukee Journal Sentinel: Thomas Musil

• My husband’s company wants him to transfer to the East Coast for two years. Our house is in a deteriorating area and we had been planning to sell and buy in a nicer location in this area. However, with the transfer, we are undecided whether we should buy a home here (and rent it out during our absence) and rent on the East Coast - or, buy a house in our new location and then buy a home on our return to California. We would appreciate your advice.
• I signed a one-year lease for my house in California starting March 1, 2006, which will expire Feb. 28, 2007. It seems to be a standard contract. I was recently laid off by my employer. I’m currently in my company’s redeployment pool, and I need to find an internal job. I hold a temporary work visa, which is linked to my company. If my employment ends, my visa is no longer valid and I need to leave the country soon after that. The lease contract says that in the event of termination by the tenant prior to completion of the original term of the agreement, tenant shall also be responsible for lost rent, rental commissions, advertising expenses and painting costs necessary to ready premises for re-rental. Does this clause apply even though I have been laid off and need to leave the country before my lease is up? What happens if I manage to find a job in my company but in another location and I need to move cities?Thanks in advance for clarifying the points above.

Miami Herald: Richard White

• I moved into a condominium two years ago. Since then, the maintenance fee has gone up $100. We are now told it is going up again with next year’s budget. The problem is, we are not getting any maintenance. I am in a situation where I can no longer afford the maintenance fee, but the chance of selling is slim as the place looks so neglected and the fees are so high. Is there any statute that restricts the amount of increase per year, or on what grounds they can do this?
  You have said in your column that the board is responsible for the budget. It is implied in our condominium documents that only association members have the power to pass general assessments to provide funding for the budget. This leads me to ask how a budget can be implemented without funding provided by an association general assessment.
• The association must pass special assessments for specified amounts, yet only the board passes the major general assessments. I realize that budgets may not be increased by 15 percent without members’ approval, but it still requires funding to pay for any part of the budget. This may be a sort of Catch-22.

NY Times: Jay Romano

• My partner and I recently moved into a co-op apartment. The previous owners completely gutted and renovated the apartment after they bought it and resold it nine months later. The renovation was well designed and done with quality work. However, after living in the apartment for a week, we discovered that in the renovation of the walls (previously made of plaster, and now wallboard) all the existing soundproofing between us and our neighbor was removed. While the neighbor is very polite, we can clearly hear every conversation, as well as her television and noises from her pet birds. The only real solution will be more renovation. The board permitted the previous owners’ renovation, apparently without any consideration of the effects on the quality of life for the next owners. Is solving the problem purely our responsibility or do we have any recourse with the building or board?
• I live in a rent-stabilized apartment in Queens, which has not been registered with the State Division of Housing and Community Renewal since 1995. I know I am entitled to file an overcharge complaint involving up to the last four years’ rent. What I am unsure of is what rent will be used to calculate any overcharge. Is it the rent registered in 1995 or the amount on the lease from 2002, which was not registered?

Washington Post: Benny L. Kass

• Last week’s Real Estate section reported that mortgage rates around the country fell, “with rates on 30-year mortgages dipping to the second-lowest level of the year, pushed down by further signs of economic weakness.” We are interested in refinancing our 7.5 percent mortgage and want your advice on how to go about doing this. What costs will be involved, and how do we determine whether refinancing makes sense?

Washington Times: Henry Savage

• I have a $379,000 mortgage on a property worth about $500,000. The best offer I received from a lender was 8.70 percent with 1.50 points. The total closing costs, including the points, add up to $9,000.  The loan officer told me that my credit score, which is below 550, was preventing me from getting a good rate.  I have four questions:  1 I constantly receive phone calls and mail solicitations that say I can get a 1.50 percent mortgage. I assume this is a bait-and-switch tactic. Am I correct? 2 Given my credit score, is this the best offer I am likely to receive, and should I accept it? 3  Is there any advantage to a 40-year fixed-rate loan, compared to a 30-year loan? 4 If we decided to sell this property, would it make sense to take cash out and make improvements that buyers get excited about, such as a kitchen renovation? Or is it best to sell “as is” quickly and buy another property before prices go up?