Q DEAR BOB: I have worked for 34 years as a secretary, with the past 12 years for a sole practitioner lawyer in a busy office. At age 63, I'm not sure I can keep up the 8-to-5 routine and would like to get into a less-demanding field. I am considering obtaining a real estate sales license to supplement my income. My three choices are to take night or weekend community college real estate classes, learn if there are correspondence courses, or take online real estate courses. Do you think I'm too old to become a real estate salesperson? What is the best way to learn the realty fundamentals? -- Jeannie R.

ADEAR JEANNIE: Age is an advantage, not a disadvantage, in real estate sales. And with your secretarial and legal backgrounds, you have excellent experience for entering realty sales.

The best place to obtain your real estate education is at a community college. Start with the real estate principles course. Then take real estate law, finance, appraisal, practice, economics, property management and other realty classes that interest you.

As a community college real estate instructor for 28 years, I've seen hundreds of students become successful sales agents. My youngest students have been high school juniors and seniors who were interested in real estate. My oldest student now is a retired high school principal in his 70s who plans to sell real estate. The oldest student I ever had was an 83-year-old realty broker who came back for a refresher course. There is nothing like taking a class to meet other students who have the same goals as you. When you meet the requirements and feel prepared, then take your exam to obtain your real estate sales license.

DEAR BOB: I bought and moved into a new house. If I sell it before living in it a full two years, can I prorate that $250,000 tax exemption or maybe get the entire deduction because the house isn't five years old? -- Clark O.

DEAR CLARK: In limited circumstances, you can claim a partial $250,000 principal residence sale exemption under Internal Revenue Code 121, even you haven't met the two out of the last five years ownership and occupancy tests.

You can claim a partial exemption if your reason for selling your principal residence after less than two years is a job location change qualifying for the moving expense deduction -- your new job site must be at least 50 miles farther away from your home than your old job site; health reasons; or unexpected circumstances, still to be defined by the IRS.

The age of the house doesn't matter. If you qualify for a partial exemption, the percentage is the number of occupancy months divided by 24. For example, if you lived in your principal residence 12 months and qualify for the partial tax break, you get a 50 percent profit tax exemption; that is, up to $125,000. For details, consult a tax adviser.

DEAR BOB: A few months ago we tried to refinance our home loan through a local mortgage broker. He gave us a good-faith estimate of our costs, which would be a 1 percent loan fee, title insurance for the lender, appraisal fee and small fees of about $200. When we received the final loan papers to sign, we were shocked to see an administration fee, warehouse fee, processing fee, underwriting fee and even a miscellaneous fee. When we protested, he said the lender, a major nationwide bank, imposed those fees.

Because we found a much better deal at our credit union, we canceled, but he insisted on keeping our $500 application fee as a cancellation charge. Are these junk fees, or was the mortgage broker justified in passing them along to us? -- Derek G.

DEAR DEREK: Your situation is a classic example of unnecessary mortgage fees that are pure profit to either the mortgage broker or the actual lender. The mortgage broker should have been satisfied with his 1 percent loan fee. It's not unusual for borrowers to pay the lender's title insurance and appraisal fee. Your original good-faith estimate of loan charges would have been acceptable.

But that mortgage broker went overboard by adding all those junk fees to your final loan closing papers. They are pure-profit items for either the broker or the actual lender. Congratulations on refusing to accept the actual loan. You were a potential "bait and switch" victim.

As for getting your $500 refunded, if I were in your situation, I would send a polite demand letter to the mortgage broker, giving him 15 days to refund your $500. Be sure to explain the "bait and switch" loan terms he delivered were totally different from what he disclosed up front. Send a copy to the state agency that licenses him, too. I'll bet you get a $500 check so that you don't have to sue him in small claims court for the refund because of breach of contract.

DEAR BOB: We sold our home in May. Our real estate agent gave us a disclosure statement that we truthfully filled out, signed and gave to the seller. It disclosed a few minor defects, such as leaks at the gutter joints, an obvious crack in the garage slab and a weak fence. A few weeks ago, during a heavy storm with strong winds, the 15-year-old roof leaked. The next day, the buyers phoned us and the realty agents, demanding a new roof for nondisclosure. When we owned and lived in our home, we never had any roof leaks. Are we liable to our buyers for either roof repairs or replacement? -- Henry U.

DEAR HENRY: No. The purpose of home-seller defect disclosures is to alert buyers of problems that they should consider when buying a house. Your buyers accepted the house with the defects you disclosed.

You have no legal liability for fraud, misrepresentation or anything else if a roof leak develops six months after the home sale in a severe rainstorm. Unless your buyer can prove you knew about roof leaks and failed to disclose them, you have no legal liability.

DEAR BOB: I want to become a first-time home-buyer. I have less-than-perfect credit and my FICO credit score is 620. I am a veteran so I am hoping I can get a VA mortgage.

A mortgage person said I can get an 80-20 mortgage on a condo. Part of the loan is at 7.75 percent interest, and there is a second mortgage at 10.5 percent interest. She says that way I can avoid private mortgage insurance (PMI) premiums. But I think these rates are too high, based on what I read in the newspaper. What do you think? -- Matthew S.

DEAR MATTHEW: Shopping for a mortgage is often harder than shopping for a home. You should spend $12.95 to obtain your FICO score and credit report on the Internet at www.myfico.com. Perhaps your credit report has errors that can be corrected to raise your FICO credit score and lower your mortgage interest rate.

Armed with your credit report and FICO score, your next step is to consult at least three mortgage lenders to compare their offerings. If you belong to a credit union, check their usually low interest rates.

Before shopping for a house or condo, you should get preapproved in writing by an actual lender (not by a mortgage broker who thinks you might "prequalify" for a mortgage).

Your 620 FICO credit score is a bit low, but still reasonable. You won't get the lowest interest rate, but those rates quoted to you seem high in today's ultra-low mortgage market. Consult several lenders who specialize in VA mortgages. Many lenders won't handle VA and FHA home loans because of the extra paperwork, but some lenders do. With a VA mortgage, you won't have any down payment, and the interest rate is competitive with conventional mortgages.

DEAR BOB: My husband and I plan to divorce soon. He wants me to keep the house, which we bought it in the early 1970s for less than you would pay for a car today. If I sell the house after the divorce, my profit will be more than the $250,000 tax exemption and I would owe capital gains tax. Should we sell before the divorce to claim the $500,000 married couple exemption? -- Cindy A.

DEAR CINDY: Discuss this transaction with a tax adviser. Internal Revenue Code 121 requires ownership and occupancy of your principal residence for an "aggregate" two of the last five years before the sale. I'll presume both you and your husband meet that test.

However, I see a flaw in your tax strategy of selling your principal residence while you are still married to claim the $500,000 tax exemption. For a married couple to qualify for up to $500,000 tax-free principal residence profits, they must file a joint tax return in the year of the home sale.

If you won't be filing a joint tax return, because you're not married in the year of the home sale, maybe you need to go to "Plan B," whatever that might be. That's why you need to plan the tax details before divorcing.

DEAR BOB: My new wife and I planned to sell our homes and move closer to our children. We found out that the lender who refinanced my wife's home has a $9,600 prepayment penalty if she sells and pays off her mortgage during the first five years of the mortgage. Is there any way to avoid this rip-off? -- Terry T.

DEAR TERRY: Read the mortgage or deed of trust carefully because many specify the prepayment penalty will be waived if the home is sold or if the buyer finances with the same mortgage company. If that doesn't work, ask the lender to reduce or eliminate the prepayment penalty. It can't hurt to ask.

DEAR BOB: My husband and I recently sold our second home. On the closing statement, in addition to the listing agent's 6 percent sales commission, there was a $250 marketing fee.

I asked our agent about this and was told it was for advertising costs. The house was on the market for 24 hours, my husband showed the house to the buyers, and they called the agent, who wrote the sales contract. When she presented the purchase offer, she never disclosed she was a "dual agent" representing both seller and buyer.

After an argument, our listing agent reluctantly removed the $250 from the closing statement. Lately, I am hearing about other realty brokerages imposing such fees. Is it true realty agents are starting to impose junk fees just like mortgage brokers do? -- Jan A.

DEAR JAN: Yes. If the $250 marketing fee were disclosed in your listing agreement, which you signed, then it would be a legal charge in addition to the sales commission.

DEAR BOB: My wife and I are thinking of selling our home in Florida where we have spent the winters for the last 12 years.

If we sell the home, our net profit will be $300,000. Our accountant says our Florida home is not our principal residence so it can't qualify for the $500,000 tax exemption. However, after reading Internal Revenue Code 121, it looks to me like we qualify, because we have spent at least six months full time in our Florida home for each of the past 12 years. What is your opinion? -- Herbert H.

DEAR HERBERT: Internal Revenue Code 121 says to qualify for the $250,000 principal residence sale exemption (up to $500,000 for a married couple filing jointly) you must have owned and occupied your principal residence an "aggregate" two of the five years before its sale.

It appears your Florida residence qualifies. While you lived there each year for at least six months, it was your full-time principal residence. That's an aggregate 30 months during the five years before the sale. It appears the sale of your Florida home qualifies for up to $500,000 principal residence tax-free profits.

DEAR BOB: I am 72. Is there any special tax break when a senior citizen like me sells investment real estate, which I've owned for over 20 years? -- Ben R.

DEAR BEN: The Internal Revenue Code offers no special tax breaks to principal residence owners or realty investors based solely on age. I'm presuming the property you want to sell is not your principal residence. If it is, then you can probably qualify for the Internal Revenue Code 121 principal residence tax exemption up to $250,000 (up to $500,000 for a married couple filing jointly).

DEAR BOB: I wanted to refinance my home at the lowest interest rate. On the Internet I found a highly recommended lender offering a 5.5 percent fixed interest rate. My application was approved.

The appraiser they sent was a bit stingy on her appraisal of my home's market value, but I could live with that. However, when I went to the closing, I was socked with all sorts of unexpected fees that totaled about $4,600. Also, the fixed-rate loan fee was 6.2 percent, not 5.5 percent as promised. So I walked away.

Now the lender refuses to refund my $1,000 application fee. What should I do, as this is an out-of-state lender? -- Rene H.

DEAR RENE: Congratulations on refusing to do business with that dishonest lender. When an out-of-state lender is doing business in your state, it is regulated by your state's law and must hold a valid state license.

Ask the lender for its license number in your state and file a complaint with the applicable state regulator. As for your $1,000 application fee, send the lender a demand letter with a 15-day deadline. If you don't receive your refund, sue that lender in your local small claims court for fraud and breach of contract.

Now you know why I don't recommend most Internet mortgage sources.

Readers with questions should write Robert J. Bruss at P.O. Box 280038, San Francisco, Calif. 94128, or contact him via e-mail at robertjbruss@aol.com.

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