In today's Real Estate section, which is printed in advance, the Real Estate Mailbag column incorrectly attributes the source of a statistic. Real Trends Inc., a real estate information firm, not the National Association of Realtors, reported that the average commission rate for U.S. real estate agents is 5.1 percent. (Published 9/4/04)

QDEAR BOB: About five years ago, I added my adult daughter to the title of my home as a joint tenant with right of survivorship. At the time I was in poor health and she was taking care of me. I recovered and am now in excellent health for age 68, but my daughter and I have had a falling out. When I recently contacted her to sign a quitclaim deed so I can sell my home to use the money to go into a life-care home, she refused to sign. She claims she is entitled to 50 percent of my home's sales proceeds and added that she can force the sale of my home. Is this true? -- Jennifer H.

ADEAR JENNIFER: In most states, the answer is yes. A joint tenant, or a tenant in common, can usually bring a successful partition lawsuit to force the sale of a property. Of course, it is up to the judge to decide. In most situations, the court will order a partition sale of the property with the sales proceeds divided between the co-owners.

Your situation shows why co-owners are usually better off holding title in a living trust, partnership or other ownership form in which a partition action is not available. Consult a lawyer for details.

DEAR BOB: In 2001 I paid off a Small Business Administration loan secured by my home. Since then, I have been trying to get the county assessor and the tax collector to clear my title of this lien. No written confirmation of my request to release this lien has been sent to me even though I have written several times. What should I do? -- Lucille D.

DEAR LUCILLE: No wonder you haven't received a reply -- you're asking the wrong person.

Only your mortgage lender can clear your title of that mortgage lien. The county (or city) recorder of deeds just records documents presented for recording. The tax assessor and tax collector have nothing to do with clearing your title when you pay off a secured mortgage. You should be contacting the lender of the mortgage you paid off in 2001. It is the lender's responsibility to record, or at least deliver to you for recording, a deed of reconveyance or a satisfaction of mortgage.

Have you checked the title to your property? Perhaps the lender has already properly recorded the document to clear the lien from your property.

DEAR BOB: I am 67 and a healthy retiree. My wife and I need extra income to supplement our Social Security and other income. Our two daughters, for sentimental reasons, do not want us to sell our home or get a reverse mortgage. After my wife and I die, one of the daughters will buy out the other and live in the house with her family. In return, they now will jointly pay half of our mortgage payment, which may let us survive financially. In return for accepting their financial help, they want to be sure after I am gone that their mother won't sell the house. I told them, if we accept their offer, I will add their names to the deed as joint tenants with right of survivorship. Will I be doing the right thing? -- Perry P.

DEAR PERRY: I'm sure you and your wife love your daughters, but they are looking out for themselves, not necessarily for you and their mother. The situation you describe can be dangerous. Why let your daughters control your life by putting their names on the title to your home?

If you and your wife have a substantial equity in your home, why give up all the benefits of a reverse mortgage? A reverse mortgage, depending on the market value of your home and the ages of you and your wife, can provide all the cash flexibility you need. You can choose among any combination of a lump sum, lifetime monthly income, or a credit line.

DEAR BOB: Why are real estate sales commissions based on the sales price of the home? Why does the seller of a $500,000 home have to pay a higher sales commission to a full-service real estate broker than the seller of a $100,000 home? -- Sheldon V.

DEAR SHELDON: Real estate brokers charge percentage sales commissions based on the sales price of the home because that's the way it has always been done. As home sales prices have risen in recent years, the dollar amounts earned by the sales agents have kept pace.

Although the customary real estate sales commission has been 6 to 7 percent of the home sales price, as home prices rose, the negotiated commission rate has dropped to an average of 5.1 percent, according to a 2003 report of the National Association of Realtors.

You will find discount real estate brokers who charge less, either a flat fee or a lower percent to sell your home, but these agents often also cut their services. They may not advertise your home, they may make the seller hold the weekend open houses or they may fail to include listings in the multiple listing service, which is the most powerful sales tool listing agents have.

DEAR BOB: Can home-purchase closing costs for appraisal, title search, notary, attorney, loan processing and other charges that are not tax-deductible be added to the purchase price cost basis of the home? Will doing so save tax dollars when the home is eventually sold? -- Andrew M.

DEAR ANDREW: Yes. Home buyers should add their home purchase costs that are not tax-deductible in the year of purchase to their home's acquisition price. The major tax-deductible expense in the year of purchase is the mortgage loan fee. Also, there might be prorated property taxes. Other than those expenses, most of your home purchase costs are not deductible. Other expenses, such as those you listed, should be added to your purchase price. The result is called "adjusted cost basis." The higher your adjusted cost basis, the lower your capital gain at the time of home resale. Consult a tax adviser for details.

DEAR BOB: The house in back of mine recently was sold. The new neighbor contacted me to inform me that "my fence" is about two feet on his side of the true boundary and he wants me to pay to have it moved. That fence has been there as long as I have owned my home. He claims his survey shows my fence is on his property. Do I have to pay to move it?

-- Matt M.

DEAR MATT: No. Whether you or a previous owner of your home built the fence on the neighbor's lot, presuming the survey is accurate, you have no legal obligation to pay for its removal.

There is a logical reason. Because the fence is on the neighbor's lot, that fence belongs to the neighbor. If he wants to tear it down, he can do so at his expense. Consult a lawyer for details.

DEAR BOB: I was recently offered a mortgage refinance at a bargain interest rate. The loan officer locked in my interest rate. But the mortgage contains a stiff prepayment penalty for the first three years. Do you think this is a big risk for me? -- Russ R.

DEAR RUSS: Although I don't like mortgage prepayment penalties, unless you think you will be refinancing again within the next three years, I wouldn't reject a bargain interest rate just because the new loan has a prepayment penalty.

Lenders have learned to insist on prepayment penalties because some home loan borrowers will refinance again if interest rates drop as little as one-half percentage point. However, be sure the prepayment penalty does not apply if you sell the home. That is important.

DEAR BOB: My wife and I recently bought a Florida condominium and are looking forward to retiring there, so we plan to sell our home soon. As you suggest, we interviewed several real estate agents. One agent, who works for a big-name franchise brokerage, emphasized her firm's Web site and relocation referrals. Another agent works at a local independent firm that is successful and has been in business since 1924. A third agent works for another national chain and was a little pushy about explaining its "famous name" benefits. Should we go with a franchise or independent listing agent? -- Harley R.

DEAR HARLEY: It doesn't matter where your listing agent works. You are hiring that individual agent, not the brokerage, to make a successful sale of your home. The name on the door of the brokerage firm is irrelevant to your sale. What counts is the record of the listing agent you hire.

I'll presume you asked all the right questions of each agent during the listing presentations. Also, if you haven't already done so, call their most recent home sellers to ask, "Were you in any way unhappy with your listing agent and would you list your home for sale again with the same agent?"

Recommendations from past satisfied home sellers are the most important reference a real estate agent has. Those testimonials are far more important than whether your listing agent works with a famous-name brokerage or a local independent broker.

DEAR BOB: In your property management report, you recommend having both tenants sign the rental agreement. Would you run a credit report check on both tenants or just one? What if the second applicant's credit report isn't so good? -- Michael M.

DEAR MICHAEL: It is extremely important for a landlord to obtain credit reports for all adult tenants applicants for an apartment or house. If possible, also get the applicant's Fair Isaac and Co. credit score. A FICO score of less than 620 is not good.

Be sure your rental agreement provides for joint and several liability. That means if one co-tenant doesn't pay his share of the rent, the other is liable for the full amount.

This can become extremely important if you have one good and one bad co-applicant. Don't necessarily reject them both. Just be sure to explain that if one co-tenant doesn't pay his share of the rent, or moves out, the other is expected to pay the full amount.

Concentrate on the strong applicant. Ask yourself, "If the weak tenant moves out, will the remaining tenant be able to pay all the rent?" Or, if the strong tenant moves out, and the weak tenant can't pay, do you want to sue the tenant who has moved out but remains legally obligated for the rent?

DEAR BOB: I am working in Europe and will be there for two more years. When I left the United States, I entrusted the rental of my house to a real estate management firm that seemed competent. Basically, all it has to do is collect the rent, deduct its 10 percent fee, send me a monthly expense report and check, and take care of any repairs. About two months ago, my tenant moved out at the end of her lease. Since then, the management company says it hasn't been able to find a new tenant. Phone calls and e-mails haven't produced results. What should I do?

-- Brent H.

DEAR BRENT: Now you know why I don't recommend long-distance property ownership. Although many rental markets are slow now, primarily because most qualified renters have bought their own homes with low mortgage interest rates, your rental management firm should have had at least a few prospective tenants in two months.

Unless you have a local friend or relative to manage your rental house, it is obviously time to switch management firms. Before you do that, call the president of your management firm to see if the situation can be salvaged, perhaps by more advertising for tenants. If not, perhaps you need to make a trip back home to interview other property managers.

DEAR BOB: About 10 years ago, I bought a nice lot on a top-rated golf course. The community is filled with $500,000 to $1 million homes. Mine is the only unimproved lot fronting on the golf course. Builders who want to buy my lot often call me. The area is booming and a large corporation recently announced it plans to build its headquarters nearby. My tax appraisal recently jumped substantially. I will be retiring next spring and plan to sell the lot then. But how can I determine its market value? The developer still owns a few lots nearby but he no longer offers them for sale as he builds speculative homes on them before selling. How can I determine my lot value? -- June F.

DEAR JUNE: Disregard the local tax assessor's valuation, which is usually below market value.

As a starting point, hire an experienced local professional appraiser who is familiar with the community to evaluate your property. It won't be an easy assignment, so he or she might charge a substantial fee.

Next, I would contact the developer to see what he would offer you for your lot. Of course, don't let him know you already have a professional appraisal.

He is your logical buyer. But if his offer isn't what you want, then you might list your lot for sale for 90 days with a real estate agent and see what happens.

DEAR BOB: I have outlived my wife and two sons. My closest relatives are in Europe and I hardly know them. I have my real estate and other major assets in my living trust. My total estate will probably be less than $500,000. Upon my death, does my executor have to pay tax on my assets before distributing my property to my European heirs? -- Van L.

DEAR VAN: Why leave your assets to distant relatives you hardly know? There are many worthy U.S. charities that will gladly accept your assets. Surely you have contact with a church or charity that can benefit from your estate. In 2004, the current federal estate tax exemption is $1.5 million. Because your total assets are well below that amount, estate tax is not an issue.

DEAR BOB: My brother died recently at age 67. Years ago, we bought a small commercial building together. It has been a great investment, which has appreciated two or three times in market value. My brother died without a will. Under state law, his widow inherits his property. However, several times we discussed that if one of us dies, the survivor is to inherit the commercial building. Do I have to accept the widow as my co-owner? -- Angela H.

DEAR ANGELA: Yes. Unless you and your brother held title as joint tenants with right of survivorship, his share of the property passed by his will or, because he didn't have a will, by the state law of intestate succession to his surviving widow.

Your conversations with your late brother are irrelevant to the situation. You should have insisted the title to the property be changed to joint tenancy with right of survivorship, or perhaps a living trust, to assure your mutual wishes resulted. From your report, it seems you own half of the property with your late brother's widow. Consult a lawyer for details.

DEAR BOB: My will provides that my assets, consisting of my primary house, a Florida luxury condo, several rental properties, various bank and stock brokerage accounts, and two automobiles, are left to my five living children. I recently consulted a lawyer about this arrangement. She said it was a bad idea to have a will leaving my assets equally to five children. She said they would likely fight over the assets and the probate costs would consume a substantial portion. Instead, she recommends a living trust to avoid probate costs in the three states where I own property and to specify that after I die all my assets be sold with the net proceeds then divided among my living children. Does this make sense to you? -- Rick R.

DEAR RICK: Yes. With five heirs, there will almost certainly be conflicts. Also, probate court proceedings in three states will require hiring costly probate lawyers in those jurisdictions.

All that can be avoided by transferring title to your real estate and other major assets into your living trust. You can amend it from time to time as the situation changes. After you die, the living trust becomes irrevocable. Then the successor trustee, perhaps your attorney or the most trusted offspring, can distribute the assets according to the terms of the living trust without probate costs and delays.

DEAR BOB: About three years ago, I bought a condo in a complex where I later discovered the homeowners association is ineffective. Many of the monthly directors meetings are canceled for lack of a quorum. When the directors hold a valid monthly meeting, they often disagree and refuse to take any action. The result is the property maintenance has become poor. I would like to sell my condo, but I fear I might take a loss. I tried becoming involved in the buildings and grounds committee, but I discovered they never meet and nobody cares about the upkeep. What should I do?

-- Lucy R.

DEAR LUCY: Sell. If you have already unsuccessfully tried to become active and to correct the condo management situation, maybe you should sell your condo and move on.

DEAR BOB: My wife and I have enjoyed our home for 32 years, but it is one of the few homes in the neighborhood that has not been upgraded. For example, most of our neighbors have installed double-pane windows and have renovated their kitchens and bathrooms. Now we have decided to sell and move to a retirement home. Should we remodel our kitchen, install new windows and fix our home up to get the best price? -- Henry G.

DEAR HENRY: No. My only suggestion is, if necessary, paint the exterior and interior of your home. Your listing agent can best advise if this will be a profitable expenditure. Paint is often the most profitable improvement you can make. However, remodeling your kitchen and bathrooms will rarely return in added sales price as much as your cost. Also, consider the great inconvenience of the renovation. Just get your home into its best presentable condition and let the buyer renovate it.

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

{copy} 2004, Inman News Service