Q: I recently made an offer on a foreclosed property that was rejected by the listing agent because I had preapproval from a correspondent lender instead of a direct lender such as Countrywide, BOA, etc.
My cash deposit and earnest money were well over 20 percent of the price. The listing agent wouldn’t even present the offer to the lender that currently owns the property. My credit is excellent and I have great income. This is the first time I’ve heard of this practice. Is this normal with bank-owned property? — N.E.
A: License law requires that an agent present any written offer promptly to the property owner. The agent has no right to reject an offer. Contact the managing broker in that real estate office. If you’re already dealing with the managing broker, contact the state licensing authority.
I suppose it’s possible the lender/owner authorized the agent to reject certain kinds of offers. But, by all means, also discuss this with the bank that owns the property.
Changing deed to son
Q: I just paid off my mortgage. We would like to change the name on the deed from our name to our son’s name. How or where do I go about doing that? — R.S.
A: You have a lawyer draw up a new deed, naming your son as the owner. You sign it, have your signatures notarized and have the deed entered in the county’s public records. That part is easy.
But first you discuss possible complications with your lawyer.
If you want to sell in the future, for instance, your profit won’t qualify for the home sellers tax exclusion. Assuming your son doesn’t reside in your home, he will owe capital gains tax on the profit, which is calculated from your cost basis.
If you ever wanted to take out a reverse mortgage you couldn’t. Your son, though, could mortgage the property any time he wanted to. If he ever had the bad luck to have a judgment placed against him, it would be a lien on your home. If he ever got divorced, your place might be mixed up in the settlement. If he died leaving everything to his wife, your home would be in her hands, or might some day even end up owned by her next husband.
Every person’s situation is different, and there may be good reasons for doing what you propose. And your attorney may suggest legal procedures for avoiding some of those problems.
So first talk it all over with a lawyer who specializes in estate planning.
Using the Same Agent
Q: We are planning to list our home for sale with a real estate agent who we have known for several years; she has shown us homes from time to time.
On my own time, I researched and found a home I would like to buy. Which real estate agent should get credit for that purchase? I think that the man who listed the home I want to buy should get full credit for it. My wife feels an ethical obligation to give half the credit to the lady that we will list our home with, and then the other half for the agent of the home we want to buy.
But why should our first agent get partial credit for a home she didn’t even find for us? I am also concerned that if the listing agent feels his percentage is going to be reduced, he will not try to negotiate the best/lowest deal possible for us. He could actually try to keep the home’s selling price higher to recoup some of his lost percentage. — C.
A: Many transactions take place with only the seller’s agent arranging everything, and they work out fine. You’re better off, though, with your own buyer’s agent, and here’s why:
By law, the listing agent’s loyalty is due to the seller. His fiduciary duties, by the way, include getting the highest possible price for he property. So, it won’t hurt to have someone else acting as your own buyer’s agent, legally obligated to put your interests first while you’re negotiating.
You could explain to your original agent that you’ve found the house you want. If you’ve already seen the interior, be sure to make that clear to her. The two agents can work out the matter of commission splits, and it shouldn’t concern you.
As for your wife’s concern about ethics, your longtime agent has already invested time with you, even if she didn’t find “The House.” And anyhow, you need a lot more additional services. Locating the place you want to buy is just the tip of the iceberg. You’ll need someone to advise on price, help with negotiations and keep tabs on financing, inspections and legal procedures until closing. And it may be easier to dovetail your sale and purchase settlements if you’re using the same agent for both transactions.
So, I guess I’m with your wife on this one.
If you pay an extra thousand dollars, by the way, that listing agent gets enough additional commission to pay for a cup of coffee. Take my word for it, agents don’t calculate that way. Their goal is to bring buyer and seller to a meeting of the minds so the deal goes through.
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 email@example.com.