Q– About eight months ago we bought our home. We didn’t think to ask if it was connected to the sewer. A month after we moved in, our toilets plugged up. When we called Roto-Rooter, we learned the house has a septic system and is not connected to the sewer. We had the septic system pumped out and cleaned, but it recently backed up again. The lowest bid to connect to the sewer is $3,850.
Do you think the seller and realty agent should have disclosed that the house wasn’t connected to the sewer? Under our local ordinance, such a connection is not required for existing homes.
A–Just as it didn’t occur to you to ask, perhaps it never occurred to the seller that lack of a sewer connection might be considered a home defect that should be disclosed to a buyer. There is no right or wrong answer to your question.
“If in doubt, disclose” is the best rule for home sellers to follow. As to whether or not the seller and/or realty agent owe any financial obligation to you, please consult your attorney.
Q–You often tell home buyers not to buy a house with an incurable defect. I agree. But you never give any hint how the seller of such a home can sell. In my situation, the extension of a parkway greatly increased the traffic in back of my house.
I have been trying to sell my home since before my husband died a year ago. All the realty agents who see my home say it would sell in a minute if it weren’t for its location adjoining heavy traffic. I have a four-foot high sound wall, bushes on both sides of the wall, and double-pane windows to stifle the sound.
I’m sure this is not the type of question you like to tackle, but what should I do?
A–I love tough questions like yours. A few years ago, I sold a similar house near a noisy freeway. As I learned, there is a buyer for every home, but at the buyer’s price and terms.
The first step is to get your home into tip-top “red-ribbon-deal” condition. It sounds like you’ve already done that. Just to be sure, please read a great new book “Dress Your House for Success” by Martha Webb and Sara Parsons Zackheim, available at your favorite bookstore or library.
Second, interview at least three successful Realtors who sell in your neighborhood. Since you’ve had your home on the market, I’m sure you know the best agents. But don’t sign a listing longer than 90 days unless it contains an unconditional cancellation clause.
Third, listen to the agent’s suggestions. A reasonable asking price is a key factor, of course. More important, you’ll need to offer extremely attractive terms with a low down payment. If you’re expecting an all-cash sale, you’re dreaming.
For example, I sold my “noisy house” by (a) hiring an outstanding Realtor who aggressively marketed the home to his network of other successful agents who represented many buyers, and (b) carrying back a large second mortgage at a low interest rate.
Incidentally, residents get used to traffic noise.
My special recommendation for your home is a lease-option. I have yet to find a home that cannot be sold by using a properly structured lease-option. The rent credit “hooks” the tenant into buying even when the home is less than perfect. I’m sending you my special report “How to Quickly Buy or Sell Your Home With a Lease-Option.” Readers can obtain a copy for $4 sent to Robert Bruss, 251 Park Rd., Burlingame, Calif. 94010.
Q–Next fall our son will be entering college. We are considering taking out a home equity loan. Its interest rate is 3 percent above the cost-of-funds index. Is this a good or bad idea?
A–Using a home equity loan to pay college expenses is an excellent idea because you don’t pay any interest until you borrow the money. Please shop around. All home equity loans are not the same. Each lender offers a different program. But I like adjustable rate loans tied to the very slow-moving cost-of-funds index.
Q–My husband just received a job promotion, but it means we’ll be moving to the Orlando area. We’re not sure which part of town is best. We’ve made several visits and each person we talk with gives a different answer about where the best schools are, the best commute, etc. We aren’t moving until school is out. What’s the best way to select a neighborhood for buying a home?
A–Start by selecting the best school district for your children. Most Realtors can give you the school statistics for the local areas you’re considering.
But don’t be in a hurry to buy a home. If you can’t find one to buy in the school district you like, lease a home for a year so you don’t make a costly mistake. Better yet, lease with an option to buy. Negotiate as large a monthly rent credit as possible. Lease-options are good for both home buyers and sellers.
Q–I am a new real estate agent looking for the best brokerage office. One of the firms I am considering charges a monthly $1,250 desk fee, but each agent gets to keep 100 percent of earned sales commissions.
I like the people and the manager of this firm, but friends who work for other companies tell me a new agent should go with a brokerage where the commission split is 50-50 with no monthly desk fee. Which type of firm is best for a novice like me?
A–The so-called 100 percent commission real estate brokerages are usually populated with aggressive, experienced, very successful realty agents. That’s the kind of agent you want to become.
However, starting out with a monthly $1,250 desk fee will force you to “sink or swim” very quickly. You might be better off at a firm with a traditional 50-50 sales commission split if it has a continuous training program, because education is what you need most.
Q–About 12 years ago, my husband and I bought 36 acres with a real estate investor friend. He left town about 10 years ago and we haven’t heard from him. We have paid all the expenses for our land and received the storage rental from a farm equipment firm. This company has made us an excellent offer to buy the land so they can build on it. But we can’t find our missing ex-partner. What should we do?
A–Consult a local real estate attorney. He or she will recommend bringing either a partition or a quiet title lawsuit so you can deliver marketable title to the property. Since your co-owner can’t be found, his share of the sale proceeds can be held in trust until he or an heir is located.
Q–There’s a vacant lot with a `for sale’ sign on it next door to our home. We would like to buy the lot so nobody can build on it and block our view, but the asking price seems very high. How can we determine the true value of the lot and avoid overpaying?
A–Vacant land value is based on the square foot sales prices of similar nearby lots with adjustments for the pros and cons of each property. If there haven’t been any recent sales of comparable nearby lots, valuing a vacant lot can be extremely difficult.
I suggest you hire a professional appraiser who is experienced appraising vacant lots. The appraisal will be valuable for showing to the lot seller to justify your purchase offer.
Q–We bought our home in 1991. Recently we sold it for a net loss about about $5,600. A friend said there is a new law allowing tax deductions for home sale losses. Is this true?
A–Not exactly. A bill has been proposed in Congress that will allow home sellers to deduct their sale losses. Under current tax law, such home sale losses are not deductible. I suggest you write your senators and congressperson urging them to include such a provision in the 1997 Tax Act and ask that it be retroactive to Jan. 1, 1997.
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PLEASE NOTE: Real estate laws vary from place to place. Be sure to check the laws of your state and municipality before making decisions on real estate matters.
Write to Robert Bruss at Tribune Media Services, 435 N. Michigan Ave., Chicago, Ill. 60611.
