Dishonest seller not protected by declaring home in ‘as-is’ condition

Q: Last week, you indicated that the seller is not necessarily off the hook when property is bought "as is." We were told he is, so please clear up this confusion. Please tell us the pros and cons of buying as-is property and how responsible the seller is by law. -- J.R.T.

A: I can't find the article you refer to. Perhaps you read it somewhere else? At any rate, selling "as is" does not protect a seller who lied about the condition of the property or who concealed some major fault the buyers couldn't see for themselves.

When buyers take property in as-is condition, they acknowledge that they realize what repairs are needed and have adjusted their purchase price accordingly. They have not agreed to accept hidden defects or undisclosed disputes about ownership.

Losing historic house

can be prevented

Q: I own a historic home that I have worked hard to bring back to its original condition. This house is soon to be added to the Register of Historic Places. Now I must sell. My broker has brought me a couple of offers, but has told me the prospective buyers plan to demolish the house or alter it so that it would lose all historic qualities. Am I legally obligated to sell if offered full price, even though I know it will be destroyed? I'd rather take it off the market and rent. -- M.H.

A: I understand just how you feel about that house.

Although listing on a Historic Register does not prohibit tearing the building down, potential buyers probably wouldn't know that. Maybe mentioning it would scare off the wrong ones.

I once asked my own lawyer if an owner has the right to refuse a written purchase offer that meets the exact terms of the listing. (That's assuming, of course, that the refusal isn't based on a violation of Fair Housing laws.) My attorney said, "Oh, you could always find the offer contained an unacceptable closing date or something of that sort." I guess the answer would be to work with the best real estate lawyer you can find.

Let me know how it comes out. I'm interested.

He's filing for bankruptcy

Q: I am considering purchasing a house with my significant other. The problem is that while I have good credit, he has filed for bankruptcy. I do not want my interest rate affected by his poor credit, so is it possible to have two separate mortgages put toward the same property?

For instance, if purchasing a home, could I take out a mortgage for half the amount while he takes out his own mortgage for the remaining money needed to purchase the home? Also, if we do decide to get one mortgage together, how much influence will his history have on our rate? -- L.B.

A: Your significant other doesn't simply have poor credit. If he's filing for bankruptcy, he can't get a regular mortgage loan, either on his own or with you, until several years after the discharge, not the filing. Anything else he might find would come from a predatory lender, with a trouble-making high interest rate.

Buy whatever you can afford on your own. Keep it in your own name only, with your own mortgage. You can change the title, or buy a bigger house together later when his bankruptcy is settled and his financial affairs are on a better footing. Anything else is asking for problems.

What is culture index?

Q: I was looking up some homes for sale on the Internet and they said total crime index (4), personal index (4) and culture index (113). What do these numbers mean? -- J.S.

A: Beats me. If I knew which site you were looking at, I could see whether it includes an explanation of those figures.

Worried about taxes

Q: My daughter and her family are selling their home. They will use part of the proceeds as a down payment on a less expensive house, but they are not sure what the tax consequences would be if they were to use part of the equity to pay off some bills rather than putting it into the new house. Can they do this and not have it impact their taxes? -- H.M.

A: The government is not interested in what your kids do with the money from their sale. You may be thinking of an old regulation that is no longer in effect.

Because they will have lived in their home at least two of the five years before they sell (even the last two years would have been enough), they can take up to $500,000 profit free of federal capital gains tax.

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