Freshening an Old Listing, and Other Tips for Worried Sellers

At any time during this process and once you have found the problem, you'll have to find contractors who can come in and assess what's wrong with the property and how much it will cost to fix it. Construction isn't cheap, but it could be that you simply need an extra drain in the garden to tie into the city sewers. It may also be a city problem -- perhaps a sewer is clogged and needs to be repaired.

Until you know what the problem is and how much it will cost to fix it, you don't know what you're dealing with and can't make a smart decision about any legal options you have. So get moving and start talking.

If I were to get a VA loan to buy my girlfriend's home, could she sell it to me for less than the appraised value? And if so, would her income be considered part of my total income on the VA loan?

According to the Department of Veterans Affairs, which backs VA loans, there is nothing in the rules that prohibits a seller from selling a home for less than the VA-determined value of the property.

As far as using your girlfriend's income to help qualify for the loan, it is possible, according to a VA spokesperson. However, "When a veteran obtains a loan with a person who is not his or her spouse, the VA is only authorized to guarantee the veteran's portion of the loan. This sometimes creates a problem for the lender."

It doesn't sound as though your girlfriend is selling you her house. It sounds as if she is selling you half of the house, but you are hoping to qualify for the purchase with her. If you buy half of the house from her and then you refinance the entire purchase, will there be enough money to pay off her old loans on the home?

There are other considerations. In some states, your "purchase" of your share would cause you to pay transfer taxes and other costs. Your girlfriend, in some circumstances, may be considered to have sold part of the home to you for federal income tax purposes. If she has a gain from the sale of that share and she has not lived in the home for two of the last five years, she might have to pay capital gains taxes.

There may be other issues for you to consider, and you need to sit down with a good mortgage person to go through them. Because you are not married, you might want an agreement between the two of you to cover the many issues that may arise if you break up -- division of the equity in the home, who would get to keep the home, and whether the person who stays in the home must refinance to pay off the old debt.

Ilyce R. Glink is an author and nationally syndicated columnist. Her latest book is "100 Questions Every First-Time Home Buyer Should Ask." Samuel J. Tamkin is a real estate lawyer in Chicago. If you have questions for them, write Real Estate Matters Syndicate, P.O. Box 366, Glencoe, Ill. 60022, or contact them through Glink's Web sites, http://www.thinkglink.comandhttp://www.expertrealestatetips.net.

© 2008 Ilyce R. Glink and Samuel J. Tamkin

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