Q–My mother, 74, is in excellent health for her age. She wants to continue living in her house, but doesn’t have enough income to meet major expenses, such as property taxes. Her house needs a new roof and some windows are rotted. We both read your report on reverse mortgages and agree this could solve her financial problems. Would she be better off taking a lump sum, credit line or monthly payment reverse mortgage?
A–The “big three” reverse mortgage lenders, FHA, Fannie Mae and Transamerica, offer lump sum, credit line and monthly cash advance programs. Your mother can get a lump sum to pay for the new roof and windows, plus monthly cash advances as long as she lives in the residence.
The big risk old people have is living too long. Many outlive their income and assets. With a lifetime reverse mortgage, that can’t happen.
Transamerica offers a lifetime annuity program with payments continuing even after the senior citizen sells the home.
I suggest you and your mother interview representatives of all the reverse mortgage lenders. Write your questions down in advance so you won’t forget to ask them. Then decide which program is best for your mother.
Q–My husband and I foolishly signed a six-month listing for the sale of my home. After two months, we decided we don’t want to sell. We think our home’s pretty nice after all, and we don’t want to move.
When we told our Realtor, she was pretty mad at us. She said she spent money printing brochures and advertising.
We offered to reimburse her, but that didn’t satisfy her. She says if we cancel our listing, she will sue us for our commission. She has worked hard to get our home sold, but she hasn’t produced any purchase offers. How can we get out of this listing?
A–If you were a regular reader of this column, you wouldn’t have signed a home sale listing longer than 90 days. However, because you have four months remaining on your listing, my suggestion is don’t do anything.
Just let the listing quietly expire in four months. If you cancel the listing now, your Realtor is correct that she is entitled to the full sales commission even though no sale takes place.
When the Realtor wants to show your home, let her do so. Cooperate fully. But don’t worry. The only way you could owe her a sales commission is if she (or a cooperating agent) brings a full-price, all-cash purchase offer with no contingencies. Chances of that happening are very remote.
Q–For the last 12 years, we have faithfully made payments on our land contract. Our home seller was supposed to keep up payments on the existing mortgage, but apparently she hasn’t done so, because last week we received a foreclosure notice from the bank that holds the mortgage.
When we contacted the seller, we learned from her son she died about a year ago, leaving virtually no assets. What should we do?
A–Run, don’t walk, to the nearest real estate attorney’s office. He or she can probably get an injunction to delay the foreclosure until this mess can be straightened out. Your situation shows another reason why land contract sales are not recommended.
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Have a question about real estate? You can write to Robert Bruss in care of Tribune Real Estate Features Service, 435 N. Michigan Ave., Suite 1400, Chicago, Ill. 60611. Answers will be provided only through the column. Please note that laws vary from state to state and area to area. Consult an attorney for specific legal advice.
