For Sale By Owner

For example, when I was at a convention in Honolulu years ago, we went to inspect a beautiful new high-rise condo building. I asked about the land lease and its terms and if there was a renewal option. I learned it was a 40-year land lease with no renewal option. Buying a condo in that building was clearly a bad deal because as it gets close to the 40th year, the condo loses all its value, as the building title then reverts to the land leaseholder.

Several years later, when I visited Honolulu, I inquired about the fate of that building. I discovered the condos did not sell and it is now an apartment rental building. When buying any improvement on leased land, you can't be too careful.

DEAR BOB: I bought a property as my sole and separate property under my name alone. Then I added my wife and the in-laws to the title. We refinanced, and I signed a deed to my in-laws. The title and mortgage are in their names. It seems that they don't want me to go back on title. Is there anything I can do? I made the down payment from my 401(k) plan. Please help. -- Eric D.

DEAR ERIC: Why would you add your in-laws to the title to your property? That makes no sense.

Worse, unless you have horrible credit, why would you transfer your interest in the property to your in-laws? Was refinancing so important that you were willing to give up ownership?

Now there is nothing you can do to force them to deed the property back to you unless you can prove fraud, duress or mistake.

DEAR BOB: We live in a very nice apartment upstairs from a commercial grocery store, which our family owns and operates. It has been a very convenient arrangement for the 23 years we have owned the store and lived above it. Not many folks have the luxury of just walking downstairs to the work they love. But we had an opportunity to sell the store to a relative at a handsome profit. Now we are thinking of selling the property, subject to the 25-year grocery store lease. Our nice problem is that our net profit will be around $800,000 for the sale of the building. My wife and I can shelter $500,000 of that with the principal-residence-sale tax exemption you often discuss. Is there any way to avoid paying tax on the remaining $300,000 profit? -- Hugo V.

DEAR HUGO: Congratulations on your profitable situation.

Yes, you can sell your combination principal residence and business property and avoid paying tax on your handsome profits. Please consult an experienced tax adviser for complete details.

Be sure the tax adviser is familiar with Internal Revenue Procedure 2005-14. It permits concurrent use of both Internal Revenue Code 121 for the sale of your principal-residence portion of the property and Internal Revenue Code 1031 for the tax-deferred exchange of the business or investment part of the property by trading for another business or investment property of equal or greater cost and equity.

DEAR BOB: About eight months ago, I received my real estate sales license. Since then, I have been working in a large brokerage office, where I have yet to make a sale. My manager is very supportive. However, I feel she is losing confidence in me. So am I. What can I do to get started selling homes? I have been trying to get listings and have taken floor time to work with buyers, but no sales so far. Fortunately, my husband has been very supportive, but we need more income. Any ideas? -- Sharon V.

DEAR SHARON: I notice your letter is postmarked from a large city and you are working with an excellent brokerage firm. However, maybe you are trying too hard.