Bruce Williams
http://www.NewsAndOpinion.com |
DEAR BRUCE: My wife and I have been living in our current house for about 15 years. Recently, especially with the economy and foreclosures, the neighborhood has declined immensely. We are going to be retiring in a few years and are not sure if we should stay in this house. With the decline in the value of the house, our equity is much less than it was three years ago. What should we do with the house? — Reader, via e-mail
DEAR READER: If you're in a declining neighborhood, the time to get out was a couple years ago. If the neighborhood is going downhill, it's in your best interest to get out and relocate. Unfortunately, with the economy and the devaluation of property, this isn't the best time. If it was declining before the economy took a turn for the worse, then it may be difficult for the neighborhood to come back — they seldom do. However, if the decline came because of the state of the economy, there is hope. I would hate for you to lose money on your home to get out now. If you can wait until property values increase and the market is good again, that would be the way to go. You didn't specify how long until retirement, but holding out would be the way to go.
DEAR BRUCE: We have been renting our condo for 10 years. It is in a great location for our work, which works well for us. We recently heard that our landlord is putting it up for sale. From what others have sold for in this area, we know we can afford it. We haven't talked to our landlord and would like to negotiate an offer less than what we think he will ask. We have taken care of all the repairs and maintenance on the condo as if we owned it and have saved every receipt. Right now, there are some major things wrong with the unit that need fixing, and we would like to use these as a negotiating tool. We don't want to lose our home, but we feel we are being fair. Should we offer a lower price? — Reader, via e-mail
DEAR READER: The fact that you have been there for a long time and took care of the repairs has nothing to do with anything. The fact that there are deficiencies in the unit is quite another matter. These can be brought to the seller's attention and used as a bargaining chip. While I understand that you don't want to lose your home, that fact should not prevent you from negotiating. During the negotiations, you should also point out that by him selling the condo to you, he will be saving money on the commission of using a broker to sell the condo. You know what they say, "You don't get unless you ask." Make your counter-offer reasonable based upon market values in the area, condition, etc.
DEAR BRUCE: The names of my sisters and I are on the deed to my mother's house, in addition to hers. Now my mother wants to take our names off. She's afraid that if my sister or I were sued, that they could come after her house as part of a settlement. Is this true? — Reader, via e-mail
DEAR READER: Should a judgment be recorded against you or your sister, in theory there could be a lien placed against your mother's house. The likelihood is that they could not take the house away during her lifetime. From a tax point of view, what she wants to do becomes even more valid. When the house passes to you and your sister, it will pass to you at the value of the house at the time she passes, not what she paid for it, which would give the house a higher base and less capital gains tax.
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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).
