QDEAR BOB: Almost two months ago I listed my house for sale for 90 days with who I thought was a very good realty agent. Following your suggestions, I interviewed three agents, checked their seller references, compared their comparative market analyses and chose the one I thought was best. But I have been very disappointed. After I signed the listing papers, my agent informed me I would be dealing primarily with her assistant, Cindy. Whenever I call my listing agent to ask why no prospects have inspected my home, I get Cindy (who appears to be a total dunce). However, every Sunday my house is advertised as an "open house." Promptly at 1 p.m., a novice agent with the same brokerage (one I've never met) arrives to hold my house open to visitors. So far, no offers. I listed my home for sale at the asking price suggested by my listing agent. She has never called me, except about a week ago, to suggest a $10,000 price reduction. When I asked why she hasn't held my home open herself, she offered vague excuses. Do open houses sell houses? -- Coreen H.

ADEAR COREEN: Rarely. The two prime reasons listing agents hold weekend open houses are to (1) show activity for the home seller, and (2) meet prospective sellers (curious neighbors who are thinking about selling) and buyers (who don't want to buy your house but are in the market).

The reasons your listing agent sends the novice agents in her brokerage office to hold your open houses are (1) she wants to give them experience meeting buyers and sellers, (2) she knows open houses rarely sell the house being shown and (3) she probably has something more important to do.

Instead of relying on open houses, the most successful realty agents primarily market homes among their peer agents who sell homes in your neighborhood and price range. The best agents hold weekday open house tours for competitive realty agents who have buyers, provide "virtual tours" at www.realtor.com and other Web sites, use local newspaper and home magazine advertising, and mail listing brochures to neighbors who might recommend prospects.

I'm glad you listed your home for only 90 days. It sounds as if you listed with a "numbers agent" who is too busy, so she lets her assistant answer your inquiries. A numbers agent carries too many listings but hopes a percentage of them will sell.

Your listing agent should personally call you at least weekly to update you on local home sales activity news, both good and bad. Unless she shapes up fast, when your 90-day listing expires, I suggest you list your home for sale with a better agent.

DEAR BOB: My wife and I live in a typical upscale suburban neighborhood, which we like very much. The area was developed about 40 years ago, so it is mature. We enjoy our neighbors. Our two teenagers love the public high school. We're very happy, except for one disturbing situation. About a year ago, a neighbor's German shepherd got out of the fenced back yard and attacked and severely injured a passerby who was walking her own dog. We just learned (from the neighborhood gossip grapevine) that the dog owner's insurance company paid more than $450,000 to the injured passerby. There was no question about the homeowner's liability. Although we don't have a dangerous dog, my wife and I want to know how much homeowner liability insurance we should carry. -- Doug W.

DEAR DOUG: Great question. I asked that question of my insurance agent many years ago. To minimize costs, he suggested I carry $300,000 liability insurance each on my home, automobile and investment properties, plus a $2 million "umbrella liability" insurance policy.

If I am negligent, like that dog owner, my individual policy would pay up to $300,000 and then my umbrella policy would pay any excess up to its $2 million limit. It's very important to have all your real estate insurance policies with the same insurer so there is no dispute among companies. For full details, please consult an insurance agent.

DEAR BOB: I am in the process of buying my first home. To get mortgage preapproval, as you constantly recommend, I have two mortgage lender quotes. One is from a local lender. The other, slightly lower, is from an Internet lender in Atlanta. Can you recommend a reputable mortgage lender? -- Dolma W.

DEAR DOLMA: Sorry, I can't recommend specific lenders. But many readers have reported mixed results when dealing with Internet lenders.

Personally, I had a very good Internet experience obtaining a Wells Fargo home equity loan. But that's no guarantee you will also have a good experience with the same lender.

Especially because you need a written preapproval letter or certificate from an actual lender, I suggest you do business with a local mortgage broker or direct lender. Then you will know where to find the office.

I suggest you do not do business with an out-of-state Internet lender, which might not even be licensed in your area.

DEAR BOB: I rent a townhouse. I have a five-year lease, with more than one year remaining. But the landlord and his wife are divorcing. I recently received a call from him saying I have to be out of my townhouse by Aug. 1, 2004. But my lease expires in August 2005. The landlord's wife's lawyer wrote me saying she will take possession on August 1, 2004. However, I don't want to move because my son is doing very well in school. Can my landlord break the lease and force me to move out? -- Sharon S.

DEAR SHARON: No. If you have a valid lease until August 2005, presuming you pay the rent on time, you can stay in your townhouse. You cannot be forced to move out by the landlord due to his divorce.

I presume you already called the landlord to remind him your lease doesn't expire until August 2005. Perhaps he thought it expired this year.

You might want to retain a real estate lawyer to write a polite letter to the divorce lawyers for the husband and wife explaining you have a valid lease, which you have performed for four years, and you expect to remain until August 2005.

DEAR BOB: I am in the process of selling my rental triplex. As you often discuss, I am using a Starker exchange to defer the tax. However, I am told I can't take any cash out of the exchange (my buyer is paying all cash for the triplex). Is this true? I want to take out about $35,000 cash to pay some pressing debts -- Isadore B.

DEAR ISADORE: Your adviser is correct. If you take $35,000 out of the otherwise tax-deferred Internal Revenue Code 1031(a)(3) Starker exchange, you will owe capital gains tax on that $35,000. However, the balance of your profit will remain tax-deferred.

Here's a tax trick, which is perfectly legal. You can receive tax-deferred cash either before or after, but not as part of the exchange.

To illustrate, you might want to refinance the triplex before selling it. Better yet, you can refinance the acquired property after the exchange to take out the $35,000 you need. Please consult your tax adviser to discuss the details.

DEAR BOB: I think the man and his wife who want to sell their New York City condo did not tell you everything in their letter. You criticized his accountant who told him the sale would not qualify for the Internal Revenue Code 121 $500,000 principal-residence-sale tax exemption. I'll bet the seller and his wife own a Florida residence that they have been claiming as their principal residence to avoid New York income tax. If that is the situation, they are not entitled to the IRC 121 tax break on their New York condo sale. -- Virginia A.

DEAR VIRGINIA: You may be right. The reader said he and his wife lived in their New York City condo as their principal residence until about two years ago. All I know is what he said.

The point of running that letter was to emphasize that a property does not have to be the seller's current principal residence to qualify for the Internal Revenue Code 121 tax exemption.

Internal Revenue Code 121 provides a tax exemption on up to $250,000 in sales profit (up to $500,000 for a married couple filing jointly) if the principal residence was owned and occupied an aggregate two of the five years before its sale. However, the residence need not be the owner's principal residence at the time of its sale.

DEAR BOB: I read with great interest your recent item about stepped-up basis on inherited property. My father-in-law recently passed away. My mother-in-law intends to stay in the house, which was built by her father in 1923. Should we at this time get an appraisal to establish her stepped-up basis due to my father-in-law's passing? My mother-in-law's will says when she dies the house will go to her three surviving children. Will there then be another new stepped-up basis? -- Paul D.

DEAR PAUL: Presuming your late father-in-law and your mother-in-law both held title to the house, she should obtain evidence of the house's current market value, such as an appraisal, to establish her new stepped-up basis.

Depending on what state the house is located in, she either received a 50 percent stepped-up basis on the inherited half, or if it is in a community property state, a 100 percent stepped-up basis.

Establishing the new stepped-up basis for your mother-in-law could become very important if she decides to sell the house. She should also take your late father-in-law's name off the title.

When your mother-in-law dies, if she hasn't sold her house, the three surviving children who inherit the house will then get a new stepped-up basis at the market value when she dies. For full details, she should consult a tax adviser or lawyer.

DEAR BOB: Your recent answer about that noisy gun club was way off base. Why didn't the real estate agent tell the home buyer about the nearby gun club before she bought the house? She obviously didn't do her homework before purchasing. If the gun club has complied with state and local regulations, why should she sue? Because she doesn't like guns? I suspect the noise element is minimal and the word "gun" provoked an emotional and irrational response.

-- Tyrone S.

DEAR TYRONE: You are correct that the home buyer's real estate agent, if she had one, and the home seller should have informed the home buyer about the nearby gun club shooting range.

If the buyer were a gun enthusiast, the gun club would have been a benefit, rather than a detriment.

But just because a public nuisance has existed for a long time does not allow it to continue existing without abatement if it seriously disturbs a large number of neighbors.

DEAR BOB: When I let it be known I want to sell my house, an acquaintance said she would be interested in buying. After inspecting my home with her husband, she said they definitely want to buy. A few days later they came back with papers prepared by their lawyer for me to sign. However, not being familiar with all the current requirements, I asked for time to have somebody review the papers. When I called several real estate agents who had been soliciting me for years to ask how much they would charge for such a prearranged sale, they all wanted the full sales commission. I felt this was outrageous because I had already found the buyer and just wanted the agent to be sure everything is legal. I offered a 1 percent commission and was refused. How much should an agent charge to handle an easy sale like this? -- Jerome H.

DEAR JEROME: Most realty agents don't want to become involved in such a sale. The reason is that the agent might incur full legal liability if something goes wrong, despite the minimal commission.

Instead, you should contact a local real estate lawyer to review the documents presented by the prospective buyer. Most lawyers will charge an hourly fee, probably a few hundred dollars, for making certain your home sale is properly conducted.

DEAR BOB: You are very unfair to us hard-working mortgage brokers. We do our best to provide home loan borrowers with honest "good-faith estimates." But it is the actual lenders that tack on the junk or garbage fees that you often discuss. Please stop blaming the mortgage brokers who shop the loan applications to find the best deal for our borrowers. We are often just as surprised as our borrowers at all the unnecessary fees that some mortgage lenders tack on to their loan charges. -- Bruce C.

DEAR BRUCE: When you submit a borrower's loan application to an actual lender and the lender replies with a loan commitment, doesn't it specify the junk or garbage fees, which the lender will insist upon receiving? Of course it does.

Also, do you always disclose to your borrowers that you will be receiving a "yield spread premium" kickback from the lender when you produce a mortgage with a higher-than-market interest rate?

Mortgage brokers often perform home loan finance miracles, especially when obtaining mortgages for credit-challenged borrowers.

But the big drawback some mortgage brokers force on borrowers at the last minute is the unexpected junk fees charged either by the mortgage broker or the actual lender.

As soon as you know about any unexpected fees for such nonsense charges as administration, documentation, underwriting and preparation, and even a miscellaneous charge, you should notify your borrowers so they can reject that loan.

This problem usually doesn't arise when a home loan borrower deals directly with a lender. The reason is a direct lender's "good-faith estimate" of loan charges is very difficult for the lender to pad with unexpected, last-minute junk or garbage fees.

DEAR BOB: When I was in the military, my wife and I bought a house in Virginia. After I was transferred, and eventually left the military, we kept our Virginia house because we thought we might like to move back to the area some day. That was about 14 years ago. Since then we have had the house managed by a so-called professional property management company, which charges us 10 percent of the gross rent for service. Recently, we have had several months of vacancy. When I call the management company, I always get the voice mail. If I were a prospective tenant, I would be very upset. When I recently asked the firm to send me a check for the $1,400 balance in my account, the check bounced. What should I do? -- Richard R.

DEAR RICHARD: You obviously have a very bad property management company because a property management firm's check should never bounce. Also, there is no valid excuse for the firm not answering the phone during business hours.

In addition to firing that firm and hiring a better property management company, you should report the problem to the Virginia real estate commissioner for investigation and possible revocation of that firm's license.

DEAR BOB: We recently bought a house as an investment. We knew it was tenant-occupied. However, after the title was transferred to us, the tenant informed us she has almost two years remaining on her very low rent lease. The seller and the realty agent never told us about any lease. Can we cancel the tenant's lease? -- Cecil S.

DEAR CECIL: The buyer of any property must honor the terms of an existing lease, even if it is at a very low rent. Your recourse, if any, is against the seller and the realty agent for failure to disclose the important fact of the lease. You could sue for rescission or monetary damages.

DEAR BOB: I own several acres of vacant land, zoned agricultural, which is valued at $145,000 per acre. Until about five years ago I had many prospective buyers. But then the city and county announced future plans to build a frontage road through my property. Now there is no interest in my land from buyers. But the city and county refuse to make a decision to buy or condemn my land. In the meantime, I have to pay property taxes and also pay for trash removal. Do I have any recourse under Internal Revenue Code 1033 for "involuntary conversion"? -- Zoe H.

DEAR ZOE: Internal Revenue Code 1033 applies to tax-deferral benefits for real estate owners whose property is condemned by eminent domain or whose property is seriously damaged, such as by fire or flood.

Your situation does not appear to qualify because the city and county are just considering a frontage road through your property. Until official action is taken, you are free to sell or trade your land.

As I read your letter, I thought about a rental house investment property I bought about 10 years ago. It was a run-down fixer-upper. The real estate agent warned me the city was considering condemning all the houses on my side of the street for widening.

But I went ahead, bought the property at a bargain price, fixed it up, and sold it at a handsome profit to a nearby gas station owner who was well aware of the possible condemnation.

Today, more than 10 years later, the street still hasn't been widened. I suggest you go ahead and build on your property. If the city refuses to issue you building permits, then you can sue the city for inverse condemnation damages that take away the full use of your property.

DEAR BOB: You are so right that parents should not add their children to their realty titles. My wife and I learned that the hard way. When our son was in his twenties, he was very ambitious and successful. We were so proud of him. As we had some health issues about six years ago, we decided to add him to the title to our home so he wouldn't have to go through probate if we died. Thanks to modern medicine, we both overcame cancer and are now in excellent health. But now we want to sell our home, worth about $450,000, to move to a warmer climate. However, our now-unemployed son demands his one-third share (for which he paid nothing). What can we do to force a sale? -- Henry S.

DEAR HENRY: The legal answer is you can bring a partition lawsuit against your ungrateful son to force a sale of the property. But the drawback is the sale proceeds will then be split three ways. For more details, consult a local real estate lawyer.

DEAR BOB: When we bought our home, the real estate agent sold us a one-year home warranty policy from a company headquartered in Idaho. I can't find any nearby office. When our water heater "blew up," the company refused to pay for a replacement. It said the water heater was old (true) so there was a pre-existing condition for which the company doesn't have to pay. So we had to pay the $579 replacement cost, including upgrade to conform with the current building code. It's not a large amount. But I hate to see the company get away with this. How can I sue the home warranty company without having to go to Idaho? -- Jan C.

DEAR JAN: If that home warranty company is doing business in your state, it is required to have a designated agent to accept service of process. To find that agent, contact the appropriate state official who regulates corporations. Where I live, that's the secretary of state.

Contact that official to learn who is authorized to accept service of process for that home warranty company in your state. If the company isn't registered, then you can serve a small-claim- court summons and complaint on the appropriate state official. Your local small-claims-court clerk should be able to give you more details.

Readers with questions should write Robert J. Bruss at 251 Park Rd., Burlingame, Calif. 94010, or contact him via his Web page, www.bobbruss.com.

{copy} 2004, Inman News Service