Real estate question
8 years ago
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Tax/Real Estate Question?
Comments (6)Yes, I know that. House A is our primary residence--that's essential so we can get the tax deduction when we sell that. C isn't an investment property--so I don't know if that advice would work for us. It's a little complicated. Our 18% share is because we refused to take money from MIL's assets when we had huge legal fees when other relatives were stealing from her. We were legally entitled to be repaid for bringing the matter to the court's attention, but as the outlaws had already stolen a quarter of a mil from her, we weren't comfortable taking even a penny of the little she had left for her end care (she had Alzheimer's). The lawyers (ours, MIL's financial guardian, and the out-laws' lawyer) and came up with the solution that they'd put a percentage of the house in our name which we'd get after she died. She did (outlaws never even told us, so we missed the funeral, but that's another post, GRRR). So, long story short--I'm not exactly sure how you would classify that bit of property--we've owned it on paper for a few years, but haven't had use of it, nor income--but we also haven't had any expenses for it's upkeep, either. So it's all a little complicated. Only thing I know, is that we really couldn't afford the money we put out at the time--but we felt we couldn't afford NOT to either, and now my sweet MIL is at peace, and we will finally recoup what we spent to protect her from a bunch of folks who professed to love her with their mouths, while they were shoving their hands into her pockets. But I do appreciate the suggestion and will bring it up when I get to sit down with my accountant. I was sort of thinking that I might want to invest in some sort of property eventually, once we've liquidated all this extra real estate we've found ourselves holding at the moment....See MoreIf you could ask a real estate agent only one question
Comments (9)I would ask about his/her "networking circle" and how quickly they respond to calls or inquiries. Anyone can list your house. You can list it yourself with a FSBO broker paying the buying agent 2-3%. Although, not ALL agents utilize all the possible websites to market your property. It costs money, so some scrimp, and therefore your house may show up only on the MLS and couple of other sites. They all work hard, and all promise to sell your property. Some will claim that they have a buyer in order to get your listing... To me, an agent who is liked in the community and one who has a lot of friends, and one who is active in the community has a larger buyer pool....friends of friends, fundraiser friends... They have to be responsible (answer calls promptly, keep their word), a go-getter, an outgoing person with PEEPS ;) If you try to reach them and it takes a while for them to return your call, do NOT employ them. That tends to be more of an irresponsible personality....See MoreAny real estate folks here, answer a heating question?
Comments (33)Just about the only thing that makes that happen is a very good and recent sale in the "neighborhood" of a house comparable to the one being appraised. Sometimes you'll have a buyer come in with cash (as from an inheritance or divorce settlement) who doesn't bother to get an appraisal. That sale can set a new high---although it is usually used as a fourth comparable since that doesn't represent the "typical" buyer. Strictly defined, a "neighborhood" is the either in the same subdivision or within one mile of the subject. Ideally the sale should have occurred within the previous six months. However, in rapidly changing market conditions some lenders ask for comps within three months. There are all kinds of exceptions to this guidline; for example, when you are in a subdivision that covers several miles and the only comps are within the s/d but beyond a mile. And a comp in the same s/d is better even if it is a mile or two away than a house just outside the s/d boundaries that is only a half-mile away. Things like s/d amenities that would attach to the subject but not the comp "outside the gates" so to speak, even if those gates are only metaphorical. When you have semi-rural properties or areas with no subdivisions it is permissible to go further away and farther back in time for comparable sales. It's very possible that someone bought a house a few miles from you that was in some way very like your house---and bought it within a few months of your own purchase. It's all about group behavior and not individual actions... you look at trends in sales and what other people have bought recently in the same area, try to find sales that match your subject best. When you have no subdivision, or you're in a rural area or dealing with unique properties, often the most difficult task is to identify the most important feature of a home---the number of bedrooms? the tennis court? the five-car garage? the finished basement media room? That's why Realtors are such wonderful resources for appraisers---if they will use their knowledge. They know what is selling houses in their area. Sometimes it is a school district---I've seen people pay $300K for a two-two in a highly desirable elementary school district. That's what makes the business interesting, there is something different with every assignment....See MoreReal Estate question
Comments (19)Patrick, Here in NC, we use a Due Diligence Period as you are aware. The appraisal is not REQUIRED to be performed during this period. However, it is very wise to do so, because if it comes back low, the seller has more incentive now to do nothing. The buyer still has to perform per the contract, or he/she will be in default. The buyer, if they do not move forward to purchase the home at the sales price, will be in default and the seller keeps the Due Diligence Fee, AND the Earnest Money Deposit. These funds are looked at as compensatory in nature and not punitive, therefore the seller would still have the option for mediation against the buyer for the breech. Personally, I let my client's lenders know exactly what the Due Diligence date is and they know for sure that we expect the appraisal to be completed, AND delivered, at least 24 hours prior to this date. It costs about $400 for an appraisal, far less than the cumulative costs of the survey, the inspection, attorney costs (which they will charge prorated even if there is no closing), moving fees, and not to mention the emotional stress of waiting until the end to find out if the home appraises. So the arguement for waiting until the end in order to save funds is silly. Patrick, in our contracts, there is no conventional financing contingency... But, if the buyer's appraisal comes back low, and it is performed during the Due Diligence Period, they have the conventional options that would come with a financing contingency. Your buyer's agent and lender is putting your buyer at risk by not having the appraisal done during this time. They also lose all leverage to negotiate with the seller to lower the price to match the low appraisal, because the seller knows that the buyers have to perform, unless they want to lose their fee and deposit. Yes, as of 2011, when we switched over using the Due Diligence clause, the buyer will lose the Earnest Money Deposit and the Due Diligence Fee if they back out of the deal for any and or no reason except for a seller default. As far as how to entice the buyer to get the appraisal soon, you would first have to find out why they have elected to wait to do it until the very end. My guess is that their agent and their lender just dropped the ball and do not understand the repurcussions if it does come back low outside of the Due Diligence Period....See More- 8 years ago
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