DEAR BOB: Our offer to buy a house was accepted by the seller, the mortgage was arranged, Two days before the closing, the realtor phoned to say that the title insurance company found a "cloud on the title." He said the seller will get it removed as quickly as possible. It has already been four weeks with no action. How long do these things usually take? Larry O, Frederick, Md.
DEAR LARRY: A property "cloud on the title" can be anything from a technicality to another person's claim to be property's true owner.
Title problem examples include forges signatures on previous deeds, tax or mechanic's liens, impresonation, easement problems, and undisclosed marital rights of a previous owner.
The seller has a "reasonable time" to remove such defects before you can cancel the sale and get your deposit refunded. Ask the title insurer what the problem is, what is being done, and how long it should take to clear the title. If problems develop, see your attorney.
DEAR BOB: Last night we received a phone call from an out-of-state real estate agent. He said he represents a bank that is closing out the last parcels in a land development at a bargain price. After extolling about how large a profit we could make on this land, he invited us to dinner to see a color slide presentation on the development. One lot there requires a $3,500 cash investment. The bank will finance the rest. My husband thinks it's a good idea. I'm doubtful. What do you advise? Beth A., Alexandria.
DEAR BETH: Go have the free dinner if you wish. But never buy any land you haven't personally inpected. Beware of telephone salesmen promising large profits on land purchases. The large profits will probably only be made by the salesman. Investigate carefully before buying any land speculation.P.S. Banks don't sell land by telephone so I think that salesman made his first misrepresentation to you already.
DEAR BOB: Last week a stockbroker offered me a limited partnership syndication investment for as little as $5,000. He says it will produce a tax write-off of 125 per cent of my investment the first year. I drove to inspect this property, now under construction. It is a new apartment complex far out in the suburbs. Would this be a good investment? Mike N., Hagerstown.
DEAR MIKE: While I can't advise on specific investments, I'm glad you went to inspect the property. Fewer losses would result if more syndication investors would do that. But never buy investment property just for the tax gimmicks. The property should be a sound investment without the tax deductions. Ask your attorney or tax advisor to review the prospectus with you before you invest to be sure there are adequate safeguards for the investors. Also check the syndicator's track record.
DEAR BOB: I heard that if I buy new furniture and appliances for my apartment house I can deduct 20 per cent of their cost the first year. True? Mark D., Laurel.
DEAR MARK: True. The "bonus depreciation rule" permits the owner of depreciable personal property, new or used, with at least a six year remaining useful life, to deduct 20 per cent of its cost in the year acquired.
For example, suppose you spent $1,000 on new or used furniture for your apartments. Even if you bought that furniture on the last day of your tax year, you can take a 20 per cent "bonus depreciation" of $200. The remaining $800 is depreciated over the furniture's useful life, which must be at least six years. For further details, see your tax advisor or attorney.
The new report, "How to Sell Your Home With or Without an Agent," is available for 25 cents in coin plus a self-addressed STAMPED envelope sent to Robert J. Bruss, P. O. Box 6710, San Francisco, Calif. 94101.