| Page 5 of 5 < |
Paying Cash for a Home Carries Risks
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
DEAR HARRISON: No. If your real estate agent has a valid exclusive right to sell, exclusive agency or open listing and he is the "procuring cause" of the sale or found a "ready, willing and able" buyer but you owners took control after that, the agent is still entitled to the agreed 6 percent sales commission.
When the sale closes, if you refuse to pay the full sales commission, the listing agent can sue for any unpaid commission. Just because the agent doesn't attend meetings of the sellers is no reason to deny a sales commission for producing an acceptable buyer.
DEAR BOB: Can I use Internal Revenue Code 1031 dollars to buy a home to live in? It is a two-family house. What are the mechanics of tax deferral? -- Linda Jo E.
DEAR LINDA JO: If you own a rental property and want to avoid paying capital gain tax upon its sale, you can make an Internal Revenue Code 1031 tax-deferred exchange for only another investment or business property of equal or greater cost and equity.
If you use part or all of the sales proceeds to buy your personal residence and don't use the entire amount to acquire another qualifying "like kind" property, you will owe capital gains tax on that portion of your capital gains from the sale. For details, consult a tax adviser.
DEAR BOB: Three siblings are tenant-in-common co-owners of our family property. One sibling put in a large amount of personal money to improve the property and wants to keep it. The other two siblings don't want the property. She is negotiating to buy out the two-thirds shares. How should the buyer be compensated for her personal expenses for the improvements? Who pays to cure the problems found during the pest inspection and professional inspection of the whole house?
-- Mr. C.G.
DEAR MR. C.G.: Real estate co-owners are obligated to pay in proportion to their ownership shares for ordinary and necessary property expenses such as mortgage payments, property taxes and necessary repairs. That means all three co-owners are obligated to pay for the pest control repairs and the professional inspection.
If the property improvements made by one co-owner weren't necessary or agreed to by the other co-owners, that individual might not be entitled to reimbursement. However, if the improvements added to the property value, it is the right thing to do for the other two owners to pay their one-third shares. This can all be worked out in the sales agreement. For details, consult a local real estate lawyer.
Readers with questions should write Robert J. Bruss at 251 Park Road, Burlingame, Calif. 94010, or contact him via his Web page,http:/
2006, Inman News Service
