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Jewish World Review March 8, 2000 / 31 Adar I, 5760

Bruce Williams

Bruce Williams
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Real-estate lawyers are essential -- DEAR BRUCE: We recently put a contract on a newly constructed home. We made the contract contingent on all plumbing, heating, cooling and appliances passing inspection by a licensed technician. The heating and cooling are OK, but the plumber found 14 areas in which the plumbing does not meet code.

We want to break the contract, but the seller is trying to keep our 10-percent down payment as a wrongful refusal to sell. He has even gone so far as to say that we should have had the inspections done prior to our signing the contract. He can't fix things that would entail the removal of structural items.

We would like to get our deposit back. What do you have to say? -- J.K., Okla.

DEAR J.K.: You haven't mentioned it, but I am absolutely positive that you didn't have an attorney representing you in this matter. This is a classic example of why you should have one.

Whether or not he will be able to sweat you for the 10-percent deposit is difficult to know. I am reasonably sure that an attorney can protect you from any suit given the deficiencies that they are either unwilling or unable to correct.

Which brings us back to square one. If you are represented by an attorney from front to back, it is much easier to avoid these types of problems.

DEAR BRUCE: My wife and I had our first child. We set up a savings account, but the interest rates are almost invisible. There is currently about $500 in the account, but we expect to add another $1,000 to $2,000 each year.

How should we go about investing the money? -- D.H. (e-mail)

DEAR D.H.: First of all, I would not open an account in a child's name even with what little tax advantage will accrue later on. You should be in the driver's seat.

You might wish to consider putting $500 each year into a Roth IRA education account, which is an extraordinary deal. These contributions must be after tax dollars, but they will labor for the next 18 years until your child is ready for college in a tax-exempt mode, as opposed to the tax-deferred mode that you would find in a U.S. Savings Bond.

As to the specific vehicle, consider mutual funds. There are many from which to choose. Bear in mind that some are not doing so well, and some are still doing very well. You are in for the long pull.

You might also consider the pre-paid college plans that are available in many states. Simply put, they allow you to buy tomorrow's college at today's prices. There are tax advantages here, and in my opinion these are the true answers for college education for the middle class.

DEAR BRUCE: In a recent column you told a 60-year-old gentleman that he should consider renting an apartment or buying a condo rather than buying a house. Your response was, "Who needs home ownership responsibilities at 65?"

I am not sure what you meant or what your reasoning is. -- S.D., Waterloo, Iowa

DEAR S.D.: As long as someone in their 60s has already sold their home, I see no purpose served in buying another. While cutting grass, shoveling snow, painting, and so forth are worthwhile and easy to handle endeavors in your 30s, in your 60s and 70s these can be enormous challenges.

Furthermore, in today's world, the overwhelming likelihood is that you can rent for less money than owning and with a great deal less responsibility. Not a bad combination.

I should add that if someone is 65 or 85 and are happy and content in their home I would never suggest that they change that way of life.

Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).


03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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