Q: My question is for my sister. She is commuting two hours twice daily for her job and needs to move. She has a house but does not have the money to fix it up. She really just needs to rid herself of the mortgage debt. She does not have the experience or time to sell it by herself. Should she contact a real estate auctioneer? Are there other options other than an auctioneer? If so, what are the pros and cons of each? — D.
A: Your sister can get excellent advice from more than one local expert, and it won’t cost her a cent. She should jot down three different phone numbers on “for sale” signs in her neighborhood, call each one and ask for help. She will find brokers quite willing to come over, look at the house, do some research and discuss the options open to her, all at no charge or obligation.
Without knowing the amount of her mortgage and how it compares with a possible sale price, I can’t say what her best move is, but the brokers will know. Unless auctions are a common form of marketing where she lives, I’d forget that idea. It’s worth remembering that there are always investors looking for places that need fixing up.
Why the appraisal
Q: My husband and I are buying my mother’s house, as she has had to go into a nursing home. My sisters and I already agreed on a selling price of $96,000 and we have been preapproved. There is a reverse mortgage in the amount of $73,000 and the balance will go toward mother’s care. Now the reverse mortgage company is requiring an appraisal and other documentation to help them decide on a fair asking price. Does the reverse mortgage company have the right to dictate what we pay for the house even though the figure we have already is well more than the amount due to them?
Thank you, and yes, we are seeing a lawyer in a couple of weeks. In the meantime, though, we haven’t finished the application process because now we’re not sure how much we need to borrow. — L., via askedith.com
A: I have no expertise in this area, and I don’t know what type of reverse mortgage your mother had. Nor do I know what the mortgage document says. So, all I can do is give you some off-hand questions that occur to me. First off, does that $73,000 include accumulated interest and original closing costs that may have been included in the loan? If so, and as the proceeds will more than take care of that, I don’t see that it’s any of the lender’s concern how much you pay. Perhaps the appraisal is simply a routine bit of paperwork. If it’s some other form of reverse mortgage and not a Department of Housing and Urban Development-backed one, it may have some provision I don’t know about.
Is it possible that the appraisal request comes from some other government agency involved? Medicaid perhaps? And is it possible that if you do indeed have to furnish an appraisal, an inexpensive broker opinion of value would be acceptable?
Edith Lank will respond personally to any question sent to www.askedith.com.