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Real estate professionals can advise on repairs needed

Q: We are thinking about moving, but our house needs siding and a roof. The roof is not horrible, but should be redone soon. The siding is made of some type of composite. Above the garage doors, the gutters leaked and caused a hole above each door. My question is, should we just fix the holes and then put the house up for sale? Or should we go ahead and have the house sided and put in a new roof and gutters? Would it be worth it? — e-mail.

A: I have no idea how bad your roof and siding are, so I don’t know if a buyer’s mortgage lender would require repairs. Nor do I know anything about price levels in your neighborhood.

You can receive good local advice — free — from real estate brokers who are familiar with your market. Call three companies that are active in the area and ask for someone to come over.

You won’t have any obligation until you sign a contract authorizing someone to market the place for you. Meanwhile, you’ll get some expert opinions and, perhaps, a chance to meet an agent who seems right to handle your sale.

What is a purchase-money mortgage?

Q: We’ve relocated to Delaware, but still have a home in another state that is currently for sale. We’ve been approached by buyer wondering if we would sell the home under a purchase-money mortgage. We would love to have your thoughts as PM is new to both us and our seller’s agent. — e-mail

A: Strictly speaking, a purchase-money mortgage is any loan used to buy real estate, as opposed to further borrowing in the form of refinancing or an equity loan.  But I suspect your prospective buyer wants to know if you’ll hold a mortgage for part of the purchase price, lending the money yourselves, acting as the bank and receiving monthly payments.

There’s nothing wrong with seller take-back financing, but at least three things must be considered. 

First, do you presently have a large mortgage on the house?  It would probably need to be paid off before you could sell, so you’d have to find the cash for that somewhere.  Second, and this is related to the first problem, are you willing to wait to collect your purchase price over a period of years?  Third, and probably most important, how come these buyers are proposing such an arrangement?  Is it because they can’t qualify for a regular bank loan?  And if so, are you willing to take a chance on someone that lending institutions feel poses too much of a risk?

If, on the other hand, the buyers have dependable income and good credit and will make a substantial down payment, a purchase-money mortgage may work out perfectly well.

Breaking joint tenancy

Q: The deed lists me and my brother as joint tenants with rights of survivorship. If I quit claim my interest to my son, and if my brother dies, will I get the property? Or will my son gets the property? — S.W.

A: As it stands now, with you and your brother as joint tenants, if you die your brother takes over your share. If he dies, you take over his share and become full owner of the property. This situation applies as long as the two of you remain as joint tenants.

If you give your share to your son, the house is then owned by your brother and your son. You’re not involved in any way from then on.

But when you transfer your ownership, the joint tenancy-survivorship is broken. Instead, the co-owners become what’s known as tenants in common, and there’s a change in what happens if one owner dies. If your brother dies, his share goes to his heirs, let’s say his wife. The house would then be owned by his wife and your son. If your son dies, his share goes to his heirs, who would then own it along with your brother.
For sale by owner

Q: We are selling our house ourselves through a company that we’ve paid to show or list. We have a buyer asking if we would be willing to accept a Veteran’s Administration loan. I did research and it seems that a lot falls on the seller. What is your opinion? — G.W.

A: VA loans are fine. As a seller, I’d be more concerned with the buyer’s financial qualifications. You don’t want to get the house tied up in a contract that ends up going nowhere.

If your buyer has been preapproved by a lending institution, you should continue with negotiations.

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.

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