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Jewish World Review May 2, 2000 / 27 Nissan, 5760

Bruce Williams

Bruce Williams
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Consumer Reports


You know you are in trouble when ... -- DEAR BRUCE: I recently bought my first home, directly from the owner. I gave her $7,500 of earnest money as my 10 percent down payment. Everything was going great: We'd arranged for financing from a local bank, the title company said that everything was OK, and we were ready to close.

The day before the closing, the bank called me and said that there was a small problem. They found a $7,500 lien against the property, but the owner assured them it would be cleaned up. The bank told us that since we had anticipated closing and had already made plans to move right in, that we could go ahead and move in, which we did.

The following week we were blindsided with information that there is over $200,000 worth of liens against the property. Obviously, the sale of the property wouldn't clean up those liens. Now the bank says that we may never close, and furthermore, the owner has already spent my $7,500 and she has no access to any money. What do I do? -- In Trouble (e-mail)

DEAR IN TROUBLE: You sure are!

You failed to say that you had an attorney, so I assume that you did not. While the attorney would not have solved the problem, he or she would have obviated all the difficulty in the deposit and the subsequent non-sale.

I don't see that there is a whole lot that you can do. Yes, the owner improperly spent your money, and, yes, she owes it to you -- but she does not have it, and as evidenced by the liens, she's in hock up to her eyes.

Any competent attorney would have come across these liens well before the closing, and your attorney would have insisted on holding the deposit personally, instead of giving it to the owner. An expensive lesson learned.

DEAR BRUCE: We are really in a jam. We found a home that we were really pleased with, and the price was even in our range. To make it an even better deal, across the street and down the block was a public elementary school that has an excellent reputation, which would be great for our two school-aged children. We bought the house and moved in, expecting to enroll our children the following week. You can imagine our shock when we found out that our kids could not attend this school but would be bussed to one of the least desirable parts of town to achieve some kind of racial equality. When we insisted that our children attend the school in our neighborhood, we were told that this was impossible. The school system was operating under a court order to achieve integration.

Our kids hate their new school. I was raised in a neighborhood with schools like that and have broken my back to get out -- now my own kids are thrust back into the same situation through no fault of theirs or mine. -- J.T. (e-mail)

DEAR INCENSED J.T.: I really feel sorry for you and your children. This idea of social engineering has been described in many parts of the country as a poor plan. I particularly sympathize with you since you have worked very hard to get out of the situation and now your children are thrust right back into it.

About the only choice that you have is private school or selling your home and moving into another neighborhood where your children will attend the school of your choice.

It's a sorry situation that things like this can happen. No longer can we assume that because there is a good school in the neighborhood our children are entitled to attend it.

DEAR BRUCE: I recently sold my home. When I purchased my home years ago, it came with an alarm system, which I believed to be operative, although I never used it. I told the new purchasers that it was in good shape, as I was told this when I bought the house.

Now the purchaser has come back and said that lightening must have struck it, and it will take a couple hundred dollars to repair it -- which they are looking to me to pay.

I had told him in good faith that it was in working order but sadly did not qualify that statement with the fact that I had never used it. What do you think? -- L.W., Toledo, Ohio

DEAR L.W.: I suspect that you will have to pay them. If you had qualified your statement by saying that you had never used it, but that you were told it was in good order, you would be off the hook. But since you told them, unequivocally, that it works, you are responsible.

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).


05/01/00: Can primary residence be rented out?
04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
04/24/00: Beware of errors in your favor
04/18/00: $10,000 limit on gifts
04/17/00: Invest or repay student loans?
04/13/00: Beware of Internet auctions
04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
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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