Q-Last month we signed a contract to buy a house. The seller accepted our offer, but he wanted to wait 60 days to close instead of the 30 days we wanted. We agreed. Then, last week the real estate agent phoned to tell us the seller had died of a heart attack. He was a bachelor with no known relatives. The coroner told us an administrator will be appointed by the court to handle the seller`s estate, since no will has been found.
Does this mean we won`t get to buy this house, which we really like?
A-No. The general rule is a real estate sales contract is binding on the heirs and estates of the deceased person. Although your sale closing will obviously be delayed, you can still acquire that house, because you have a valid purchase contract.
Be sure to contact the local probate court to learn whether an estate administrator has been appointed. If so, notify him of your purchase contract for the house.
You also may want to consult your attorney to be certain your legal rights are protected.
Merging households
Q-I will be getting married next March. My bride-to-be owns a condo, which she plans to sell. I own a one-bedroom house that I plan to sell. Then we will buy a two- or three-bedroom house together.
Should we sell our residences before or after we get married?
A-It doesn`t matter. If you and your bride get financial profits from the sale of these residences, you both can avoid paying tax on them by purchasing a replacement principal residence that costs as much as or more than the adjusted (net) sales price of your two former residences. This is called the
”rollover residence replacement rule” of Internal Revenue Code 1034.
To illustrate, suppose your bride`s condo sells for $75,000 and your house sells for $125,000. To defer tax on the profits from the sale of both residences, you and your new wife would need to buy a replacement principal residence for at least $200,000 within 24 months.
For further details, please consult your tax adviser.
Borrowing on poor credit
Q-Because of some financial problems last year, we got behind on our mortgage payments. But now we are current with our payments and have steady monthly income. We want to add a family room to our home and remodel the kitchen. The cost will be about $25,000. We asked our mortgage company to refinance, but it refused because of our poor payment record.
Is there any way we can borrow about $25,000 to pay for the improvements? A-Of course. Finance companies make second mortgage loans. They are much more flexible about credit problems than are banks and S&Ls. But they charge higher interest rates, too.
Also, the local hard money lenders who often advertise in the newspaper classified ads will loan on the equity in your home and they usually aren`t too concerned about your credit report.
However, their interest rates usually are quite high. Perhaps that`s why they`re called hard money lenders.
Square footage fudging
Q-We recently bought a house and the listing agent told us it has 1,600 square feet. But when our insurance agent measured it, she said there are only 1,475 square feet, not including the garage. I feel we were cheated out of 125 square feet. At $50 per square foot for construction, that is $6,250 we overpaid.
Does the seller`s agent have a duty to us as buyers to be honest? If so, can we expect the agent to pay us $6,250 for the 125 square feet she misrepresented?
A-Please consult a local real estate attorney. Although the listing agent works for the seller, that agent also has a fiduciary duty to the buyer to be honest and not misrepresent material facts.
Because the house was misrepresented to you, it appears the real estate agent and/or the seller owes you money for the misrepresentation.
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The new special report ”How to Shop for the Best Home Mortgage,” by Robert J. Bruss, is available for $4 from NewspaperBooks, 64 E. Concord St., Orlando, Fla. 32801.
Please note: Real estate laws differ from place to place, and laws of your area should be checked before making decisions on real estate problems. Robert Bruss will answer inquiries addressed to Tribune Real Estate Features Service, P.O. Box 280038, San Francisco, Calif. 94128.
