Backing out of sale at the last minute can lead to consequences

Q: I am a week away from closing the sale of my house. If I back out now, what is the potential negative impact on me from the buyer, my real estate agent or others? -- X.X.

A: Your agent, having produced a ready, willing and able buyer and having achieved a meeting of the minds, probably has earned a commission. Whether it would be asked for, I can't tell you.

Your buyer, having incurred considerable expense and inconvenience, probably would have a good claim for damages.

There is even a special lawsuit for "specific performance" that asks a court to order you to sell. I suspect, though, that it's seldom used.

You didn't ask for advice, but I suggest you consult an attorney this very minute.

Money needed to 'tie up

property' for investing

Q: I'm a young man looking to invest in real estate. My problem is I don't have any capital.

At a seminar last week, I heard the term "tying up property," and I believe it can be done.

My question is how can I tie up a residential property for sale, obtain the right to assign at a set price and sell the property?

What advice could you give a young investor trying to purchase real estate with no money down and sell it for a profit quickly? -- via e-mail

A: Trust me, you can't do it.

Did those hotshots at the seminar explain why anyone would sell to you with no cash for less than the place is worth on the open market? Or how you'd find a qualified buyer in time so you wouldn't get caught holding the bag?

Never mind how easy they make it sound; don't pay hundreds of dollars for whatever they're offering to sell you.

Find a real estate broker who is interested in helping you achieve your goals.

If you have good credit, perhaps you can find an experienced investor who will furnish the capital and know-how in exchange for a young person to do the running-around work. That's a good way to start learning.

Real estate is a great investment, but it's not a way "to get rich quick." It is a way to get rich slowly, and there's hard work involved.

Mortgage program may

require tax returns

Q: Do you have to have tax returns to buy a home? Why not bank statements? -- J.O.

A: Different mortgage programs have varying requirements, but you've picked a bad time to try for alternative documentation.

These days, lenders are being very careful -- what my folks called "locking the barn door after the horse is gone."

You always can ask a mortgage broker whether there are lenders who don't insist on tax returns.

There used to be; I just don't know whether they're still in business.

Assuming mortgage doesn't mean getting a free and clear title

Q: My sister wants to have her son and his wife assume the payments on her house while still "selling" to them, thus clearing some profit for retirement.

Is there a way to do this without a conventional mortgage with closing costs and lawyer fees? -- L.

A: It's not clear what your sister wants to do, but she needs to know that few mortgages these days can be assumed by the next owner of the property. Usually the loan must be paid off when there's a change in ownership. She can talk with her lender, though; sometimes they'll allow it.

Some closing costs are always necessary. At the least, someone must prepare documents and have them properly executed, acknowledged and recorded. The kids would be foolish to buy without legal assurance they're receiving clear unclouded title. And most states charge the seller a transfer fee.

Mom's 'bargain' house

comes with catch

Q: My mother recently sold me a house for a bargain, however, I just found out that she owed about $18,000 of property taxes. I recently got this year's bill. I will pay the new taxes, but do I owe the $18,000? -- via e-mail

A: It's not you who owes those back taxes; it's the house. And when you received the property, that debt (lien) came with it. You'd better pay, or you risk losing the place to a tax foreclosure.

Sellers often welcome back-up deals on pending sales

Q: Can you offer on a home that already has a sale pending? -- D.

A: Yes, you could write an offer, and the sellers would be free to accept it if it said your contract would take effect only if the first deal fell through. Sellers might welcome such a back-up offer.

Perhaps, though, you're asking whether you could offer a bonus price and upset the existing contract.

That you can't do.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.