Buyers ready to take over payments but need advice
Q: We are looking to take over payments on a home. The owner just wants out of the mortgage payments. We will have the option to buy in one to three years. What do I need to do to make this legal for my protection as well as the owner? -- J.
A: You're right to take precautions before you start paying off someone else's debt. You want written assurance that the owner won't put more mortgages on the house, that property taxes will be kept up-to-date and that you agree about who will make repairs. You need a binding agreement that you can buy, for what price, when and on what terms. You need an understanding about what happens if you later change your minds and want to back out, or if the seller backs out. Unless that happens to be an assumable Federal Housing Authority or Veteran's Administration mortgage and you can qualify to take it over, you'd have to find financing elsewhere when you are ready to buy. What if you couldn't get a loan at that point? You need to have that spelled out as well. Where real estate sales are concerned, oral promises are not binding. Your lawyer will know what should go in your signed contract.
On the mortgage
Q: What does adding my son's name to the mortgage do? Does he become part owner? -- V.
A: If your son signs a promise to be responsible for your mortgage, that makes him personally liable for the whole debt, just as you are. It does not change the ownership of the property. The real estate is still owned by the person or persons named in the deed.
Rent or sell?
Q: We (three siblings) own an inherited house in another state that is rented, but will be vacated soon. My brother is interested in selling to an interested buyer without a real estate person involved. I think keeping the property as investment income might be better. The market will begin to reflect increased value in homes, right? What would you suggest? -- K.D.
A: I don't know your financial situations, how much trouble it is to keep the house rented, whether any of the others live near enough to keep an eye on it, how long it was rented, what the tax consequences of a sale might be, or what the third sibling thinks.
I don't know what the real estate market will do or how you'd come out if you sold and put the proceeds into other investments. On top of all that, if you haven't tested the house on the open market, I don't know whether the proposed sale price is in line with market value.
I am unable to give you any suggestions without knowing the answers to the above questions.
Selling condo
Q: I'm selling my condo. While no one has a crystal ball, I'm worried that it can take up to two years to sell. Is that possible? The average time on the market here is six months (apparently), but some properties are on the market for one year. -- e-mail
A: Properties that take a year to sell are priced at more than the buying public thinks they're worth today -- and that's the only opinion that counts. You'll just have to find a price level that will attract interest.
Getting into real estate
Q: I lost my job of 14 years due to layoffs. Do you think real estate is a profession to get into at this time? I have desired to enter this profession for years. I have read numerous books and attended a few seminars. I would really like to go to school to learn the business. -- e-mail
A: Like every other business, real estate brokerage is hurting these days. But for someone who is really interested, like you, it's certainly worth trying. You have nothing to lose. You can take the required courses, pass the state exam, get a license, and start working with an experienced broker, even if you're job hunting or taking on part-time work at the same time.
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.