Cutting Back on Home Sales Commissions

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

Q: DEAR BOB: As a real estate agent, I want to thank you for your recent item about the drawbacks of cutting home sales commissions below the customary rate. My specialty is listings. I find that working with buyers is much less productive, though I make exceptions for good referrals. I've been selling homes for 14 years and will negotiate the sales commission on expensive homes to remain competitive. However, I tactfully tell my sellers that if I reduce my commission to 4 percent or 5 percent, the buyer's agents will show my listings last, only after showing all the full-commission listings. Whether it's ethical or not, that's what happens.

You also might enjoy knowing about a recent full-commission, well-priced listing I had, which didn't get even one offer after 60 days on the market. It's a beautiful older home but on a very busy street. I suggested that my seller raise the commission from 6 percent to 7 percent, with 4 percent to the buyer's agent. She agreed. I held a well-publicized "broker's tour" with a deli lunch and got 125 local agents to re-tour the house. Within the week, the house sold for nearly the full asking price. Raising the sales commission can sell a house in a slowing market -- Sharon R.

DEAR SHARON: Thank you for your insights based on longtime sales experience. Too many home sellers focus on the sales commission, thinking they are saving money if they cut the rate. But, as the volume of home resales slows in most towns, the houses and condominiums listed with reduced commissions usually get shown last to prospective buyers.

DEAR BOB: The deed to our home says, "Va and Sid, husband and wife." How can we correct it to joint tenancy with rights of survivors? -- Virginia C.

DEAR VIRGINIA: Depending on where the property is located, a local real estate lawyer or title company can prepare and record a quitclaim deed from yourselves to yourselves "as joint tenants with right of survivorship." If you live in one of the 24 states allowing tenancy by the entireties between husband and wife, you will probably prefer that title method. Or, if you live in a community-property state allowing it, you might select "as community property with right of survivorship."

The quitclaim deed must include the legal description of your property, the local tax assessor's parcel number (in most states), and the notarized signatures of you and your spouse so it can be recorded with the local recorder of deeds.

DEAR BOB: A few years ago, on the advice of our attorney, my wife and I (now 72 and 75) added the name of our mentally challenged daughter to our free-and-clear home title in joint tenancy with right of survivorship. She lives with us and has been a real blessing. Our other two adult children agree that when we pass on, she should get the house to sell and provide for her care from its equity. The problem is that my wife and I need to increase our income because my pilot's pension was recently cut drastically. We investigated a reverse mortgage and learned that it could solve our income problem. However, we can't qualify because our daughter's name is on the title and she is under 62. Any suggestions? -- Henry R.

DEAR HENRY: My personal opinion is that your attorney gave you bad advice to add your daughter's name to your home title. I know he and you meant well, but it could tie up the property if she isn't capable of understanding. It's like adding a minor child to a title; they can receive title, but they can't convey it.

If your daughter is capable of understanding, she can sign a quitclaim deed to you and your wife, thus removing her name from the title. Then you can qualify for a reverse mortgage and provide for her by amending your wills or living trust.

If she is unable to sign a quitclaim deed, then a court-appointed guardian will be needed to remove her name from the title. A reverse mortgage is ideal for your situation to provide lifetime income as long as you or your wife lives in your residence. Your home equity can provide the income lost from your pension.

DEAR BOB: My father and his brother were left joint ownership of their mother's house in 2002. Dad wants to sell the house and divide the proceeds, but his brother doesn't want to sell. The house has no mortgage. My father has paid for a new roof and other necessary work. There are unpaid property taxes of about $15,500. The house is scheduled for a property tax sale later this year. If my father pays the $15,500 property taxes, can he obtain full ownership? Is there any other way he can obtain full ownership? It would be a shame to lose this house over unpaid property taxes. -- Scott C.