DEAR BOB: We have owned our home many years and are thinking of selling, perhaps early in 1991. Is there any rule of thumb as to how much home prices are expected to appreciate in the next 12 months?

Our home has been our best investment, so we are wondering if we should sell or if you expect home prices to go up substantially next year? -- Melba H.

DEAR MELBA: I have no idea how much home prices might appreciate in the next year. Historically, home prices have appreciated about 5 percent annually on a nationwide basis in recent years. But that includes high appreciation rates of 20 percent to 30 percent annually in some areas, as well as major price declines in states such as Texas, Oklahoma, Louisiana and Alaska.

In the buyer's market that prevails in most of the nation, home prices are stagnant or rising only slightly. If you have a good reason to sell next spring, that should be a good time. But if you have no compelling reason to sell, you might be better off keeping your home. Sorry I can't be of more help, but real estate is a very local industry, so it is difficult to give an exact answer to a general question like yours.

DEAR BOB: I am 26 and anxious to earn real estate profits. I have taken the 11 real estate courses I can get at our local community college. In other words, I consider myself well prepared.

At a property management class I met an elderly gentleman, about 65, who owns several downtown apartment buildings that are very management intense. This old man offered to sell me one of his buildings for nothing down and he will carry back a second mortgage for his equity at 5 percent interest. The building will break even if I can keep the vacancy rate below 10 percent.

Do you think this is a good or bad deal? -- Brent W.

DEAR BRENT: Be careful. That "nothing down" offer might be too good to be true. If you decide to go ahead, be sure there is no personal recourse on the second mortgage. I presume the existing first mortgage has no due-on-sale clause. If it does, forget the sale because it could be very dangerous to buy subject to a first mortgage with a legally enforceable due-on-sale clause. Consult a real estate attorney for more details.

DEAR BOB: Shortly after we sold our home I became severely ill and unable to look for a replacement home, so we could defer our profit tax by purchasing another home of equal or greater value.

I contacted the IRS and my congressional representative, but have been unable to find out how to get a six-month extension of the time I need to buy a replacement home. How can I do this? -- Ruthie P.

DEAR RUTHIE: Sorry, but Internal Revenue Code 1034 has no provision for granting any extension of the 24-month time limit for buying a replacement home of equal or greater cost, so you can defer the profit tax on the sale of your old home. For further details, consult your attorney.

DEAR BOB: I own a small auto repair business and need additional capital for my business. I am thinking of selling the building where my business is located. Of course, I want to lease back the building. Do you think this makes sense? -- Bruno T.

DEAR BRUNO: Yes. The advantage is you would acquire working capital. But the disadvantage is, presuming the sale is for more than your depreciated book value for the property, you will owe tax on your profit.

The sale and lease back of business property is a common business event. However, be sure to consult your tax adviser to maximize your tax advantages.

DEAR BOB: I rented an apartment on a month-to-month tenancy. After about six months I decided to move out. I had a $250 security deposit. I left the apartment spotless. But the landlord kept my deposit because she says it is her policy to repaint apartments after each tenant moves out. My apartment doesn't need repainting, since I don't smoke and none of my friends do either. How can I get my $250 back? -- Damon H.

DEAR DAMON: Your first step is to make a written demand on your landlord for immediate refund of your security deposit within 15 days. If you don't receive your money, small claims court or housing court is the place to sue for your deposit refund.

DEAR BOB: We bought our home about five months ago and are very happy with our purchase. However, I have been wondering if the real estate agent did anything wrong.

We met her at a Sunday open house. As she showed us through the home, we said it was a nice home, but the price seemed too high for us. Then she told us that in her opinion her listing was overpriced.

When I asked what price the seller would take, she said she didn't know, but she would be willing to present our offer about $20,000 below the asking price. We knew that would be a bargain, so we agreed to make such an offer. The seller accepted our offer that evening.

Two things concern me. One is the listing agent encouraged us to make a low-ball offer. The second is the seller's acceptance of our first offer with no negotiation. Do you think we were set up? -- Morris W.

DEAR MORRIS: No. The agent probably knew her listing was overpriced. However, the agent often has no choice but to accept an overpriced listing or not take the listing at all. When I was actively selling real estate as an agent, I often took overpriced listings with the understanding the seller would reduce the asking price if no purchase offers materialized.

As for the agent's encouraging you to make an offer $20,000 below the asking price, there is nothing wrong with that. Perhaps the agent knew the seller might accept such an offer. Of course, it would be unethical for her to tell you the seller would accept such an offer.

I see nothing wrong with the listing agent's tactics. She was using good salesmanship to get you to make an offer. The final decision was the seller's, not the agent's.

The only thing I would be concerned about is that your first offer was accepted. I know how bad that feels because it means the seller might have sold for a lower price if you had offered less. But be happy with your bargain and forget about how you stole that home from the poor unsuspecting seller.

DEAR BOB: We have about $45,000 equity in our home. Our first mortgage has a 7.5 percent interest rate, so we are reluctant to refinance. But with that much equity, I hate to leave it sitting idle. Do you know any lenders who make wraparound mortgages? Would we be better off getting a new first or second mortgage? -- Sheridan R.

DEAR SHERIDAN: Sorry, I do not know any lenders who make wraparound loans.

Since you didn't give the balance on your first mortgage, I can only give you general advice. If the balance is more than 50 percent of the additional amount you can borrow, then you will be better off adding a new second mortgage, rather than refinancing with one large first mortgage. Compare the total loan payments both ways, but you will probably come out best by adding a new second mortgage and leaving the old first mortgage alone.

DEAR BOB: My husband and I obtained title to our home from his mother. We are buying the house from her. What concerns us is we have only a quitclaim deed.

Should obtain a warranty of some sort? -- Julie P.

DEAR JULIE: A quitclaim deed means the grantor conveys whatever title she owned in the property. It can be the conveyance of a full fee simple absolute title. Or it can be delivery of no title at all if the grantor didn't own the property.

For example, I can give you a quitclaim deed to the Empire State Building, but it conveys no title rights because I don't own the Empire State Building.

But a quitclaim deed is perfectly safe if you also obtain an owner's title insurance policy. If you did not buy such a policy at the time you obtained the quitclaim deed, I suggest you buy an owner's title policy now. It will protect you against many unexpected title risks, such as forged signatures in the chain of title.

DEAR BOB: I want to sell my expensive home and buy a less costly one. But I want to use the "over 55 rule" $125,000 tax exemption to reduce the basis of my new home. I can sell my current home for about $350,000 and I want to buy a replacement for around $300,000. Can I use the $125,000 exemption to reduce the basis on my new home? -- Fred H.

DEAR FRED: No. I am not aware of any method of doing so. You can use your once-per-lifetime $125,000 exemption by subtracting it from the net (adjusted) sales price of your old home. That would bring your $350,000 sales price down to $225,000. If you buy a replacement home costing at least $225,000 in this example, your profit tax is deferred. But the basis of your replacement home is not reduced by the amount of your $125,000 exemption. Consult your tax adviser for details.

DEAR BOB: We were very fortunate to sell our home last year for cash. Now we want to buy a new house. The builder offers a plan with as little as 10 percent down payment. However, I am wondering if we have to reinvest the cash we received from our home sale if we are to avoid paying tax on our sale profit. Please clarify. -- Scott P.

DEAR SCOTT: Internal Revenue Code 1034, the "rollover residence replacement rule," does not require you to reinvest any cash from your home sale into your replacement home. All that matters is you must buy and occupy the replacement principal residence within 24 months before or after the sale and its cost must equal or exceed the net (adjusted) sales price of your old home.

To use an extreme example, you can sell your old home for cash and buy a replacement home of equal or greater cost for nothing down, such as with a VA mortgage, and spend the tax-deferred cash from your home sale as you wish. For further details, consult your tax adviser.

DEAR BOB: I am considering investing $20,000 with four other investors who will put up $20,000 each for a down payment on an apartment property. The building will have a resident manager.

Although this is a break-even cash flow situation, the building should appreciate in value and we will have tax shelter deductions in the meantime. What do you think of this investment idea? -- Emily W.

DEAR EMILY: Not much. I do not recommend group real estate investments. Too many things can go wrong, such as a disagreement developing among the investors. I realize that $20,000 won't buy much of an individual real estate investment, but please don't say I didn't warn you about the pitfalls of partnerships.

DEAR BOB: You harp on making a small down payment and getting a big mortgage when buying a home. Does that advice also apply to older folks? I am 74 and my husband is 79. We are both in good health and plan to buy a small home in central Florida near Orlando.

Is there any place we can get a 20-year mortgage at our advanced ages? -- Flo R.

DEAR FLO: Yes, even retirees should make a minimum down payment and obtain a maximum home loan. Mortgage lenders cannot discriminate on the basis of age. They must judge your loan application on your income and credit history.

Even though you are unlikely to live to pay off a 30-year mortgage, if your income and credit justify it, you can obtain such a loan. Florida mortgage lenders are especially savvy about the merits of making loans to older people because the default rate is practically zero.

DEAR BOB: Our home mortgage is less than two years old, but it has been sold three times. We now have to make loan payments to a loan servicer in a small Texas town I've never heard of and where the Pony Express apparently delivers the mail once a week.

This company claims our escrow impound account was under-funded by $454 that we were asked to pay in a lump sum. When we refused, the lender agreed we can spread out the extra payments over 12 months.

But for the last two months we have been assessed late charges even though I mail our mortgage payment on the first day of the month.

The loan company says our payment is due by the first, even though there is a 15-day grace period. What can we do about these mortgage problems? -- Grady S.

DEAR GRADY: Your situation is not uncommon. The sale of home mortgage servicing is a multibillion-dollar unregulated business. The abuses by loan servicers are shocking, yet Congress refuses to regulate this business. To make matters worse, some loan servicers do not have 800 toll-free phone numbers and require borrowers to write letters stating their complaints, which often go unanswered.

It sounds like your loan servicer is working the "late payment scam" by claiming your payments are not received until after the 15-day grace period expires.

It is true your loan payment is "due" on the first day of the month, but most lenders give a 10- or 15-day grace period. As long as your payment is received within the grace period, the lender cannot give an adverse credit rating on you. Some of the biggest loan servicers use this scam. The only way to protect yourself is to get a proof of mailing receipt at the post office or send your payments via certified mail with a return receipt requested.

As for the escrow account rip-off, that is another tactic some loan servicers use to increase balances in borrower-impound accounts for property taxes and insurance. The best you can do is double-check the loan servicer's estimates of required payments. Federal regulation of loan servicers is long overdue, but don't expect any new laws soon because the loan servicers strongly oppose any such control of their very profitable operations.

Readers with questions should write Bruss directly at P.O. Box 280038, San Francisco, Calif. 94128.

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