Idle Equity? A Reverse Mortgage Could Be the Answer.

DEAR ARNIE: Yes. If your daughter owned and occupied her principal residence at least 24 of the 60 months before its sale, Internal Revenue Code 121 entitles her to claim up to $250,000 tax-free home-sale profits. This includes the entire $100,000 expected sale profit so no capital gains tax will be due on the sale. Consult a tax adviser for details.

DEAR BOB: I have renters living in the houses on each side of my house. These rented houses have trees that overhang my property. Is the owner responsible for trimming these trees? If not, can I trim these overhanging trees? -- Jim H.

DEAR JIM: A property owner can trim overhanging trees back to the property boundary. However, be sure your trimming is not so severe that it kills a tree or causes it to fall and cause damage, in which case you could be held liable for the loss.

Before trimming the overhanging trees, try to contact the adjacent owners on a friendly basis. I recently did that about two trees that leaned toward my house.

My nice neighbor paid to have his trees removed to avoid future possible damage liability if they fell and damaged my house.

DEAR BOB: Thanks for those recent items about raising the home sales commission to 7 percent, with 4 percent going to the buyer's agent, to get a house sold in a slow market. That is exactly my problem. However, when I showed your article to my listing agent, her broker said it would be "unethical" to charge a 7 percent sales commission so he refused. My listing still has about 60 days left and I want the house sold. What should I do? -- Pat C.

DEAR PAT: I have never heard of a real estate broker refusing to raise the sales commission to push through a sale. There is nothing unethical, illegal, immoral or even fattening about a home seller offering to pay a 7 percent sales commission with 4 percent going to the buyer's agent and 3 percent to the listing agent.

If I were in your situation, I would phone the listing agent's broker, politely explain you want to get your house sold in a slow market, and wish to raise the sales commission to increase the incentive for buyer's agents to sell your house. If he or she refuses to agree, then it's time to consider canceling the listing for lack of due diligence so you can list with a better agent.

DEAR BOB: I don't expect you to print this letter because I am a nontraditional real estate agent who charges my home sellers a set sales fee of $9,950, which is not commission based on the home's final sales price. I still make a profit while doing the exact same things traditional agents do for their clients. My client's best interest and net savings always come first. It is unfortunate some Realtors claim to be ethical while practicing their self-serving interests. Instead of a taking seminar courses on how to defend your commission, they should take courses on true ethics to look out for your client's best interest. -- Luis T.

DEAR LUIS: That chip on your shoulder must be heavy. Lighten up. Real estate agents are in business to earn a profit, as you are. If your brokerage office can survive on $9,950 per home sale, good for you. However, I question if you are really looking out for the best interests of your home sellers to get top price for their residences.

You conveniently neglected to say if all your listings are immediately placed in the local multiple listing service and on the Internet to give your home sellers maximum exposure to the market of prospective buyers represented by other agents, and how those buyer agents are compensated.

DEAR BOB: I am considering buying rental property near Austin, which is a good rental market. Our real estate broker recommends a 10 percent first mortgage to buy this property. My wife and I both have excellent credit. Does this make sense? -- Byron T.

DEAR BYRON: There are two potential mistakes. The first is buying rental property out-of-state where you are not able to manage your own property. Nobody has as great an interest in your investment property as you.

The second mistake is paying 10 percent mortgage interest for a rental property in today's market.

You should be able to obtain a much lower interest rate on investment property. Borrowing at 10 percent to buy a rental property makes it extremely difficult to create a positive cash flow.

Readers with questions should write Robert J. Bruss at 251 Park Road, Burlingame, Calif. 94010, or contact him via his Web page, www.bobbruss.com.

2006 Inman News Service