Value of home defined: what a buyer is willing to pay

Q: When I sell my house, should I be able to get close to the tax appraisal price? Or how should I determine a sale price? -- A.S.

A: You don't determine sale price and neither does the tax assessor or a real estate agent.

Value is set by the buying public. No matter how skillfully and carefully updated, assessed value is not a reliable guide to probable sale price.

To judge the right asking price, you must think like a buyer. Find out what people have paid recently for similar nearby properties. Find out what failed to sell. Find out what's currently on the market near you and how it compares with your place.

Any nearby real estate broker can bring you those figures, and most will do it at no obligation.

Lien can be placed on

house for many reasons

Q: We were talking at work, and one of the girls was telling us what happened to her mother's house. Liens were put on the house for nonpayment of medical bills. Is this true? Can doctors and hospitals put liens on houses if we are unable to pay?

My house is my only asset. My husband is on Social Security, and I am going on Social Security next year. What protection do we have, or what can be done to prevent this from happening?

We worked hard for everything we have, and this bothers me that someone could come along and do this. Maybe we should sell the house and buy a condo and put the condo in my son's name. But I really don't want to sell my house. Ever since I heard about liens, I don't know what to do. -- E.M.

A: Not only health care providers but also others to whom you owe unpaid bills can go to court and ask for a lien (a financial claim) against your property. That's always been true. But putting your home in your son's name could lead to some unexpected problems. For one thing, if he had unpaid bills, the house could be hit with liens placed by his creditors.

None of this is anything new, and nothing has changed in your situation. You might as well just relax and enjoy your home as you always have.

Refinancing without agent

only involves lending institution

Q: Is there any way that I can refinance my existing mortgage without going through a broker or agent? If not, then am I correct in assuming that I would have to pay only 3 percent, not the normal 6 percent in commission that a buyer's and seller's agents would get on the sale of the house because there is no seller involved? -- J.S.

A: There wouldn't be a buyer involved either, so you'd have no need for a real estate agent's services at all.

Borrowing that money is simply a matter between you and the lending institution, though sometimes people do consult a mortgage broker to find out what's available. Start by talking with your present lender to see what they have to offer. Your expenses all will be concerned with the mortgage itself.

Selling one-third requires

buyer to share ownership

Q: I own a family cabin with my brother and sister. Each of us has a one-third interest. How would I sell my interest to another party? --via e-mail

A: Selling your part interest is the same as selling any other real estate. You just have to find someone who wants to share the ownership with your brother and sister. Or perhaps the two of them would buy you out, after an estimate of current value by a qualified appraiser.

Your other route is to force a sale of the whole property by going to court and requesting an order for "partition." That's an expensive and unpleasant process and seldom yields the true value of the property. Not recommended!

FHA has loan to cover

purchase price, improvements

Q: We have found a home that is bank-owned and has sustained an incredible amount of water damage.

The house will need about $30,000 to $40,000 worth of work.

We have been preapproved for about $270,000. Is there a way to secure a loan for $270,000 but attempt to purchase for about $225,000 and take the remaining funds in the loan to fix it up?

Would it be appraised for the current state, or can it be appraised based on the home after the capital improvements? -- via e-mail

A: The Federal Housing Administration insures a mortgage program called 203(k), which is exactly what you're looking for.

It allows a prospective owner-occupant to borrow the purchase price plus money needed for extensive rehab work. Perhaps the bank that owns the property handles that FHA plan, or you could inquire of mortgage brokers who know what's available.

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.