DEAR BOB: As a Realtor, I am extremely frustrated trying to hold my home sales together while arguing with mortgage lenders to get the buyers' loans approved and funded. Lately, I've had to tell my buyers and sellers to plan on 60 days to get the loan. The big hangup has been slow appraisals, which take from two to six weeks, depending on the lender. But the lender's processing delays add several weeks more. Just yesterday, after waiting six weeks, the lender called to say the loan is ready to close and my buyers must sign their loan documents within 24 hours. Unfortunately, my buyer is out of town on business, so the closing will be delayed and the lender wants to charge an extra fee for redrawing the loan papers. What can be done about these sassy mortgage lenders who charge high fees for bad service? -- Greta H.
DEAR GRETA: 1986 will be a record-breaking volume year for mortgage lenders, and they are obviously not prepared. From reports I'm receiving from most states, the poor service you've encountered from local lenders who originate home loans is becoming normal. The huge volume of refinanced home loans, the active market of home sales -- due to lower interest rates -- plus the shortage of appraisers and loan processers has resulted in massive back-office delays.
Personally, I've also encountered unreasonable delays such as those you describe. But what irritates me is that the lenders charge high loan fees, usually 2 or 3 percent of the amount borrowed, for very bad, rude service. However, I find that setting a deadline for the lender and then justifiably complaining when the lender doesn't meet the promised goal keeps things moving. The squeaky wheel gets the oil. That certainly applies to getting a home loan today.DEAR BOB: We have our home listed for sale and are trying to figure out how much our profit will be. We bought the house in 1949 but have lost most of our receipts for improvements such as a room addition, kitchen and bath remodeling, swimming pool and a hot tub. How can we calculate our profit if we don't have our receipts? -- Carlton H.
DEAR CARLTON: If the IRS audits your income tax return, the auditor can accept reasonable cost estimates for your home and its improvements. However, a nasty auditor might refuse to accept your figures and come up with a less favorable total. In Tax Court, the IRS numbers are accepted unless you can disprove them. So keep looking for those receipts.DEAR BOB: Please clarify how an installment sale works. I understand it allows the property seller to spread out receipt of payments and the profit tax over future years. Is this the same as a land contract sale? -- Jack W.DEAR JACK: No. The purpose of a deferred-payment installment sale is to spread out the tax payments over the years the seller receives payments from the property buyer. A boost into a high income tax bracket in the year of sale is thereby avoided.
A land contract sale, also called a contract for sale, contract for deed, agreement for sale, and installment land contract, is a legal device whereby the property seller retains the legal title until the buyer makes all or an agreed number of payments. Obviously, because payments are spread out over a number of years, a land contract sale is also an installment sale.
In other words, a land contract sale is just one way of giving security for an installment sale. Other installment sale devices to secure the buyer's future payments to the seller include a mortgage, a trust deed, and a long-term lease-option sale. See your tax adviser or attorney for details.
DEAR BOB: About a year ago, we bought our semirural home, which is located on 2.5 acres. Occasionally, we noticed a neighbor driving across our property to reach part of his land. Recently, we fenced our land because we bought two horses. The neighbor objected to the fence, which blocks his use of the dirt road across our land. He claims to have an easement that dates back many years. Because he can reach his land by using the public highway, although the distance is further than when he shortcuts across our property, what can we do to block his easement? -- Hart M.
DEAR HART: Consult your attorney. If your neighbor owns a recorded easement across your land, it would have been disclosed in the title insurance policy I hope you obtained when buying your home. The neighbor probably never perfected his easement, so your new fence blocked his possible right to obtain a prescriptive easement (due to continuous uninterrupted use). Another way to thwart your neighbor from acquiring a prescriptive easement is to give him written permission to drive across your land.
Your situation is a classic example of why realty owners should periodically inspect their property to be sure nobody is possibly acquiring rights to a prescriptive easement. Either stopping such use or giving permission will stop the neighbor from going to court to acquire an easement across your land.
DEAR BOB: I recently bought a 16-unit apartment building. When I went to my CPA to set up a bookkeeping system, he said the "last month's rent" I received from the seller for 15 apartments, a total of about $8,000, will be taxable to me as rental income in 1986. Is this correct? -- Jim L.
DEAR JIM: Yes. When a landlord collects a tenant's "last month's rent," that amount becomes taxable rental income to the owner in the year of receipt even though the tenant may not use the rent credit for many years. However, when a tenant eventually moves out and uses the previously paid last month's rent, you need not declare it as rental income at that time.Readers with questions should write Bruss directly at P.O. Box 6710, San Francisco, Calif. 94101.