QDEAR BOB: Now I know why you constantly nag home sellers to interview at least three successful agents, check their references from previous sellers, and then list for 90 days with the best one. We didn't do that and it cost us. My wife's real estate broker friend recently bought a discount brokerage franchise, so she wanted to help her by giving her our home listing. We liked the idea of a reduced commission rate, but we didn't realize the pitfalls. We overpriced our house based on the broker's recommendation. As a result, few other agents showed our house although it was in the multiple listing service. We received no offers after two months although we reduced our asking price. We had foolishly signed a six-month listing and now the broker won't let us cancel although she has only advertised our home twice. She says the market is slowing down, but we notice lots of sold signs on nearby homes. Other agents won't even talk to us while our home is listed with another firm. What should we do? -- Stan W.

ADEAR STAN: You needed to interview at least three agents who sell nearby homes, check their references from recent sellers, and then list for 90 days with the best agent. That's plenty of time for a sharp agent to sell most homes. If you had done that, instead of listing with your wife's friend, you wouldn't be in your situation with a long listing that the broker refuses to cancel.

As for the sales commission rate, you should be aware commissions are negotiable. Especially on expensive homes, many agents reduce their commissions to get the listings without cutting their services. As I've pointed out before and as you discovered, many buyer agents won't show listings where they will receive a reduced commission share compared with other listings. If you had interviewed three or more agents, you would have learned this possible pitfall.

Because time is money when selling a home, I suggest you talk with your listing broker to get her either to cancel the listing or to expend more effort to get your home sold.

DEAR BOB: I own a townhouse and fell behind on my mortgage payments to the private-party lender who sold me my home about three years ago. The reason I couldn't make my payments was I became ill, lost my job, had family problems and only recently was able to find work. Meanwhile, the lender (a wealthy woman) foreclosed on my townhouse. There was nothing I could do to save it from foreclosure sale. I was forced to move out. Should I have filed for bankruptcy to save my home? -- Audrey T.

DEAR AUDREY: When you realized you couldn't make the mortgage payments, you could have sold the townhouse to receive all or most of your equity rather than losing it by foreclosure. Instead, it sounds as if you did nothing, although I realize you were not in good health at the time.

Just because your mortgage lender was a wealthy private party is no reason to expect her to be soft on you because of your personal situation. Personally, every time a tenant or borrower didn't pay me, when I gave them extra time they took advantage of me. Most lenders and landlords have learned that harsh lesson.

If you had filed for Chapter 13 bankruptcy, that would only have delayed foreclosure unless you made up the missing payments as promised. Chapter 7 bankruptcy entitles the secured mortgage lender to foreclose and be paid the mortgage balance. I suggest you stop blaming yourself and, now that you are working again, start over and buy another home as soon as possible.

DEAR BOB: In the early 1960s, I bought a small piece of vacant land in New York City. Over the years, the value has increased greatly. I am now retired with little income, so proceeds of a sale would greatly help toward my living expenses. The taxes would be so huge I am just about resolved to leave the property in my will to my children and let them deal with it after I die. What are the tax rules for the sale of such land? -- Jenny W.

DEAR JENNY: There are no special tax breaks applicable to your situation. Because you have owned the property well over the 12-month minimum for long-term capital gains, your federal tax rate will be a 15 percent maximum. In additional, New York will also claim a capital gain tax.

If you die while still owning the property, your heirs will receive it at a new stepped-up basis of market value on the date of your death. Then they can sell the land virtually tax-free.

Because you now need the sales proceeds to enjoy retirement, don't let the modest capital gains tax stop you from selling your vacant land. Nobody enjoys paying taxes, but long-term capital gains taxes are the lowest rates available.

DEAR BOB: Our son and daughter-in-law have been told by their real estate agent about 80-20 mortgage financing. Is this a good thing for young adults and how does it work? -- Janet S.

DEAR JANET: Yes, 80-20 home mortgage financing is a good deal for home buyers. The primary reason is it saves the dreaded private mortgage insurance premium, which is required by lenders for more than 80 percent financing.

An 80-20 mortgage means a zero-cash down payment, a first mortgage for 80 percent of the home purchase price, and a 20 percent second mortgage for the balance. Both mortgages are usually made or arranged by the same lender.

There are variations, such as 80-10-10, with an 80 percent first mortgage, 10 percent second mortgage and either a 10 percent cash down payment or the seller carries back a 10 percent third mortgage.

DEAR BOB: I know about the Internal Revenue Code 121 principal residence sale tax exemption up to $250,000 that you often discuss. I am selling my summer home where I only spend about four months each year. Four months annually does not add up to the required 24 out of last 60 months before sale to qualify for IRC 121. I've owned my summer home for 16 years. Will I have to pay capital gains tax on my sale profit? -- Mary M.

DEAR MARY: Yes. There are no special tax breaks available for the sale of a part-time home such as yours. But the 15 percent maximum federal capital gain tax rate, plus any applicable state tax, is quite reasonable. Consult a tax adviser for details.

DEAR BOB: My wife, 82, and I, 75, own our modest, free-and-clear home worth about $100,000. It needs some repairs, such as a new roof. What is the most we can get on a reverse mortgage? -- Bobby B.

DEAR BOBBY: When a house is co-owned by two owners older than 62, reverse-mortgage eligibility is based on the age of the youngest co-owner. As a general rule, you can usually borrow a percentage of your home's market value based on your age minus 5 percent. In your situation, that means you can borrow up to 70 percent.

If you need more money, you could quit-claim the house to your older wife and then probably receive up to about 77 percent of its value. The reverse-mortgage amount can be any combination of a lump sum, a credit line (except in Texas because of state law), or monthly lifetime income based on the age of the youngest homeowner.

DEAR BOB: Several times you have mentioned the stepped-up-basis rule for property inherited from a deceased spouse. The last time you mentioned this, you said a surviving spouse gets a new 50 percent stepped-up basis for property inherited from a deceased spouse, except in community-property states where it is a 100 percent stepped-up basis. Why the difference? Which are the community-property states? -- David R.

DEAR DAVID: Community-property legal theory is that all assets acquired during a marriage belong equally to the husband and wife regardless of who earned the money to buy those assets. There are a few exceptions, such as assets inherited by a spouse during the marriage, and assets owned by a spouse before the marriage.

In 1848, the Treaty of Guadalupe Hidalgo ending the Mexican War required the rights of Mexican citizens to be respected, including community property between a husband and wife. Community-property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Don't ask me how or why Wisconsin adopted community-property rules a few years ago. Frankly, in my opinion all states should have community-property benefits for husbands and wives.

DEAR BOB: My husband, who died in 1987, and I owned our house together. Recently, I found a buyer for the house, but the title insurance company refused to transfer title without probate court approval. Is there any way to avoid this hassle? -- Agnes H.

DEAR AGNES: If you and your late husband owned title to your home in joint tenancy with right of survivorship, or in a living trust with you named as the surviving trustee, title transfer is easy. The title insurance company officer should have explained the easy transfer method that avoids probate.

But I presume you co-owned the house in another method, such as tenants in common. That means your late husband's share of the house was subject to his will. If he died without a will, his share of the house passed by the state law of intestate succession, probably to you.

However, a probate court action is usually necessary to transfer a tenancy-in-common title. Now you know why co-owners should hold title in a living trust or other method that avoids probate court proceedings. Consult a lawyer for details.

DEAR BOB: I sympathized with the homeowner who wrote you several weeks ago about the adjacent Wal-Mart store where noisy trucks keep her from a quiet sleep all night. I had a similar situation where a big auto dealership (owned by a famous former football player) was built across the street from my home. The bright lights at night are so intense I can read in my living room with my house lights off. It was so bad I had to take out a home equity loan to pay lawyers to apply for an injunction to get the auto dealer to install light shields. I won. But the auto dealer is appealing. My advice to that homeowner who wrote you is to get together with your neighbors to sue Wal-Mart to get a court injunction to ban those noisy all-night trucks so you can stay in your home and its market value won't be diminished.

-- Dave C.

DEAR DAVE: The situation you describe is a private nuisance because it only affects a few property owners. If it were a widespread nuisance affecting many properties, then it would be a public nuisance to be abated by a government official, such as the city or county attorney.

Congratulations on obtaining an injunction against that inconsiderate auto dealer who disturbs the enjoyment of your home. The private nuisance you describe seems ideal for mediation to get the auto dealer to turn off, or at least turn down, his car lot lights after 10 p.m.

DEAR BOB: Twelve years ago, I bought some rural land and received a warranty deed. My seller has been dead at least 10 years. I have leased the property all these years to a farmer who grazes his cattle there. Now an adjoining farmer (not my tenant) claims about seven acres of my fenced land belongs to him. He threatens to sue me for using his land for the 12 years I have been allegedly using his land. What should I do? -- Althea W.

DEAR ALTHEA: A warranty deed, used in many states, warrants that the seller conveys valid title to the buyer. However, a warranty deed is only as good as the seller's honesty.

As with any deed, the buyer should always insist on receiving an owner's title insurance policy from a reliable title insurance company. With rural land, a survey is usually made at the time of the sale and the survey is insured as part of the buyer's title policy.

If you did not receive an owner's title policy, insuring a survey of your land, you are on your own if that neighbor sues you in a quiet-title lawsuit for those seven acres. However, if you have an owner's title policy, just turn the matter over to your title insurer to resolve with the neighbor.

DEAR BOB: Many years ago we sold some land and carried back the mortgage for our buyer. It has now been a year and half since we received the last payment. We get no response when we try to contact our buyer. We think he has health problems and is possibly dead. We would like the land back. How should we proceed? -- Vicki H.

DEAR VICKI: You certainly are patient. Rather than waiting all this time for your unpaid payments, you should have begun foreclosure long ago.

As an investor, I have begun foreclosure on many mortgages I held. My begging and pleading for payments fell on deaf ears. But when I filed foreclosure papers, I usually got my payments. In only two situations did my buyers refuse to pay and the property was foreclosed.

I suggest you begin foreclosure for the unpaid payments on the land you sold. Either you will receive the money, or you will wind up owning the land again, which is apparently what you want. Consult a lawyer for details.

DEAR BOB: I can't believe the high prices home sellers are receiving in my neighborhood. But I've read that we may be in a "real estate bubble" for home prices and today might be the time to sell. What is your opinion? -- Richard C.

DEAR RICHARD: I am a "newbie" real estate investor, having been investing for only 38 years. When I bought my first property, the real estate agent proudly told me home prices in the area had appreciated an astronomical 3 percent in the previous year.

I quickly figured a 3 percent return on my cash down payment was a terrific return. That's called leverage, meaning the owner controls the property with a small investment.

Recently, the National Association of Realtors reported the median U.S. home value appreciated had 15 percent in the last 12 months. But in 2004, homes appreciated only about 10 percent in, according to the association.

Of course, average home market-value appreciation varies widely by location and even specific properties.

The real estate value trend has always been up. However, along the way there are peaks, valleys and plateaus.

My best advice, if you want to sell your property, is to sell now and enjoy your profit. If you have no reason to sell, enjoy the property. Even if its market value plateaus, or even drops a little, unless you bought the property recently you probably still have a handsome profit.

Is this a good time to buy a home, I am often asked (especially on radio talk shows). My answer is it is always a great time to buy a home, but that you should never make more than a 20 percent down payment so you limit your maximum loss.

Real estate is a long-term investment, not a get-rich-quick scheme, so plan to hold your property at least five years.

DEAR BOB: My mother owns a wonderful house worth about $1.2 million. When she passes on, my two sisters and I are her living-trust beneficiaries. Although the house is held in her living trust, will we get a new stepped-up basis to market value? -- Jerry VonB.

DEAR JERRY: Yes. Holding real estate title in a living trust is just an ownership method, such as tenancy in common, joint tenancy or partnership. A living trust has no effect on the stepped-up tax basis rules for inherited real estate. Consult a tax adviser for details.

DEAR BOB: You often refer to a Starker exchange of investment property. My CPA and real estate brokers I know have never heard of this tax concept. The whole process seems quite complicated if I sell my rental property. But the tax savings could be profitable for me. What should I do? -- Pete W.

DEAR PETE: Hire a new tax adviser. If your tax adviser or real estate broker doesn't understand Starker exchanges for investment property, found in Internal Revenue Code 1031(a)(3), you need to locate a new tax adviser and a new real estate broker. This is basic tax saving information for real estate investors.

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.

(c) 2005, Inman News Service