REAL ESTATE MAILBAG
Backing Out of a Sale at the Last Minute
Q: DEAR BOB: I recently put my house on the market for sale. I received a purchase offer from a buyer, and we agreed on closing the sale. But because of job-related issues, I am no longer willing to move and do not want to sell. Can I get out of this agreed purchase offer without selling my home? -- Tim S.
A: DEAR TIM: Seller's remorse can be very expensive. Presuming there are no loopholes in the sales contract for you to cancel the sale, if your buyer really wants the house he can sue you in a specific-performance lawsuit. He will probably record a lis pendens (suit pending) against your title to effectively prevent you from selling to another buyer or refinancing the mortgage.
Even if you can get the buyer to cancel the sale, you may still owe a sales commission to a real estate agent for finding a ready, willing and able buyer.
DEAR BOB: My 31-year-old niece died recently. She did not have a will. She had purchased a condominium about three months ago. Can her mom sell the condo, or does she have to do something else first? -- Georgia Z.
DEAR GEORGIA: Unfortunately, because your niece died without a will or a revocable living trust, her condo and other major assets will have to be probated. That means a court will determine who inherits her assets.
If her mother is her closest living relative, the state law of intestate succession will probably give the assets to the mother after all debts are paid.
Before the mother can sell the condo, the title must be transferred to her name by the probate court. Depending on the local court backlog, this can take six to 12 months, or longer. The mother should consult a local probate lawyer.
DEAR BOB: Can a Starker tax-deferred exchange be used on a primary residence? I find myself moving often within the same town. My next move will be within less than 24 months. I am always moving up in value and equity. -- Eric G.
DEAR ERIC: Sorry, an Internal Revenue Code 1031 tax-deferred exchange applies only to real estate held for investment or use in a trade or business, such as a rental house. Your personal residences won't qualify.
However, if you own and occupy your principal residence at least 24 of the last 60 months before selling, then Internal Revenue Code 121 applies, and you can avoid tax on up to $250,000 in capital gains ($500,000 for a married couple in which both spouses meet the occupancy test).
You could be entitled to a partial IRC 121 exemption if the sale is because of health reasons, a job change or unforeseen circumstances.
DEAR BOB: My husband and I owned a house with a third person under joint tenancy with right of survivorship. The third person married and quitclaimed his one-third share into a revocable living trust. He died a year ago. The quitclaim was recorded, but I do not believe the deed was changed. Has the joint tenancy been broken if a new deed was not recorded? -- Donna L.