For Sale By Owner

Bruss is away. These questions are taken from previous columns.

Q: DEAR BOB: Twelve years ago, we successfully sold our home ourselves and saved the real estate sales commission. Now we are trying to sell our townhouse without an agent and are encountering nothing but problems. The additional legal paperwork and required disclosures are amazing. More important, we discovered that even paying $795 to put our listing into the local multiple listing service hasn't brought results. The local agents aren't showing our home even though it is reasonably priced and we offer a 2 percent broker co-op commission. We had one very serious prospective buyer who came back three times. But she wanted us to reduce our sales price by 6 percent because we wouldn't have to pay a sales commission. Any suggestions on how we can sell our home and save the sales commission? -- Norman V.

A: DEAR NORMAN: No. As longtime readers know, I do not recommend attempting to sell your home without a professional real estate agent. Although I am a real estate broker, unless I sell a rental house to my tenant, I always list it with a local real estate agent.

Full-time, professional real estate agents know local market values, whether they are rising or falling. By attempting to sell alone, you could be vastly underpricing your home. Or maybe it is overpriced, so prospective buyers stay away.

Most prospective home buyers shy away from "for sale by owner" newspaper classified ads. They fear the seller is strange for not listing with a realty agent. There is a good reason more than 80 percent of home sales are handled by real estate agents.

Although you paid $795 to put your listing in the local multiple listing service, that doesn't mean it will be actively marketed. The MLS is a powerful marketing tool, but your home also needs exposure on the Internet, such as Realtor.com and other Web sites, which only a proactive listing agent can provide.

Offering a 2 percent sales commission to a buyer's agent is an insulting joke. Get realistic. In today's competitive home sales market, you should list with a successful, aggressive real estate agent to get your home sold and to comply with today's disclosure requirements.

DEAR BOB: My father died in 1986. He left his house to me, his only child, subject to a life estate for his second wife. My stepmother is now 93 and still living in the house, which is in a horrible state of disrepair. About five years ago, after reading your item about terminating a life estate for "waste," a local real estate attorney brought a lawsuit against her on my behalf because she let the house deteriorate. However, the sympathetic judge ruled there was not sufficient waste to terminate her life estate. The house (worth about $300,000) is in a decent neighborhood, and the life tenant isn't spending a penny to maintain it. Is there anything I can do? -- Ryan R.

DEAR RYAN: Of course you could bring another lawsuit for waste, but there is no guarantee of success.

Another alternative is to offer your stepmother cash to terminate her life estate. Perhaps she would like to move to an assisted-living center where she can receive care and cooked meals in a nice facility. Waving $50,000 or $100,000 cash in front of her might convince her it's time to move out.

DEAR BOB: After reading a recent column by you, I got the impression that it is better to inherit property than to receive it as a lifetime gift. But both situations are subject to tax. Please expand on this topic. -- Al R.

DEAR AL: From the heir's viewpoint, inheritance is better than a lifetime gift because the heir receives a new "stepped-up basis" of market value on the date of death. This is a huge tax benefit, especially if the property had been owned many years with a low basis.