When a listing agent disappoints

Question: When we are not happy with our home listing agent and wish to terminate the listing early, what alternatives do we have?

Answer: Unhappiness is not a legal reason to terminate a valid home sale listing contract. Legally, to cancel a listing you must be able to prove the agent’s lack of “due diligence.”

That means the agent isn’t taking the customary steps to properly market your home, such as erecting a for-sale sign, putting your listing into the local multiple listing service (MLS), advertising it on the Internet at https://www.realtor.com and other Web sites, advertising it in local newspapers, holding weekend open houses and arranging local broker tours to network among agents who have prospective buyers.

Maybe your home is overpriced and a price reduction will stimulate buyer interest. Perhaps there is another problem. I recommend you have a meeting with the listing agent and his or her supervising broker to discuss the situation. If the agent is doing a bad job, you might suggest the listing be transferred to a more effective agent within the same brokerage. As I frequently recommend, I hope you did not sign a listing for longer than 90 days. If it is just a short time until your listing expires, then you can list your home with a better agent after the expiration date.

Children, parents spar over home

Question: My parents own a summer beach house in New Jersey. My brother and I want to buy this house in a tax-smart way by using seller financing to provide additional retirement income for our parents. Then we want to rebuild the home and rent it out to cover our costs. But our parents want to sell the house for cash. Any ideas?

Answer: You have an excellent situation to obtain seller financing from your favorite and easiest lenders, your parents. Everyone benefits. I suggest you and your brother write up a simple purchase offer to your parents with the sales price, cash down payment (if any), and monthly mortgage payments to them at a fair interest rate, perhaps 5% or 6%.

You might offer them a 20- or 30-year amortized mortgage, due in 10 years if they wish. Where else can they invest the sales proceeds from that house at such a high yield with safety? Explain that in the unlikely event of your default, they can foreclose on their mortgage and take back the property (of course, you will never allow that to happen).

Another advantage for your parents is they will have an installment sale to spread out their profit tax over the years of the mortgage payments. However, interest income will be taxed to them as ordinary income. If they instead sell the house for cash, their entire capital gain will be taxed in the year of the sale. To clinch your purchase, be sure to emphasize to your parents this plan is good for increasing their retirement income and good for you too by keeping the house in the family.

Wayward roots vex neighbor

Question: Last year the property next door to my home was sold to a developer. This spring the roots of a tree on that property began pushing its shoots through my driveway. I’ve phoned the developer and sent him a letter about this problem. No response so far. What is my next step?

Answer: The general rule is a property owner can cut tree branches and roots of a neighbor’s tree back to the property line. Your neighbor has no legal duty to cut those branches or roots that encroach on your property. The legal reason is he would be trespassing if he came on your property.

But a rule of reasonableness applies. If the tree on your neighbor’s property would die as a result of your cutting its roots, then you can be held liable to your neighbor for loss of the value of the tree. Please be very careful. For your protection, before you cut those tree roots you might want to consult an arborist who can advise if cutting the roots risks killing the tree.

Don’t gamble with home equity loan

Question: Would it be wise to take out a home equity loan to invest in the stock market under today’s real estate and stock market conditions?

Answer: No, no, no. Why risk your safe, secure home equity to gamble in the world’s largest casino (the New York Stock Exchange)? Homes have proved during the recent stock market debacle to be ultra-secure.

‘Rent back’ might not be good idea

Question: I want to delay possession on the sale of my home until a week after the sale closes. I can picture all sorts of awful scenarios if I don’t, such as my moving out and then the buyer backs out of the sale and my old home sits empty while I am still making payments. But my real estate agent says this is unheard of. She tells me possession is always given to the buyer at the close of the sale. My realty agent is really “leaning” on me and says I am being stubborn. However, I think I’m just being prudent. I am in my 50s and disabled, so moving out is not something I could do twice if the buyer defaults. What should I do?

Answer: If this was important to you, you should have included in the sales contract a right to remain in your home up to seven days after the sale closes and the deed is recorded. That is called a “rent back.”

However, I do not recommend home buyers accept such a provision because some holdover sellers fail to move out as promised.

Before you vacate, perhaps you will feel more confident if the buyer places their funds with the closing agent a few days before the scheduled closing date. If you haven’t moved out by the scheduled date for title transfer, however, I wouldn’t blame the buyer for delaying the closing until you have vacated and the buyer can have a final walk-through inspection to be sure there is no unexpected damage.

Before upgrading, consult agents

Question: I’m getting ready to sell my home. But the cooktop and spa are broken, a couple of ceramic tiles in the kitchen are smashed, the carpet absolutely needs to go, the kitchen counter tops would look better if they were granite, and my tract home could really take advantage of the view with some new windows. Should I sell my home as a fixer-upper or should I do the fix-up work myself?

Answer: I usually advise getting a home into tip-top condition before exposing it to the market. However, before you definitely decide to fix up your home, please consult at least three successful local realty agents in your vicinity.

They will give you their listing presentations. Ask if you should spend a modest amount to make the improvements listed to make your home more attractive. If those improvements will make your home more salable and raise its price by at least the cost of those improvements, then do it. However, if the market in your home’s price range is “hot” and your home will quickly sell “as is,” why go through the hassle of all that fix-up work? Of course, if you sell it as a fixer-upper, don’t expect the price you might get if it were in model home condition.

Hitch in appraisal hangs up buyers

Question: We paid a $40,000 good faith earnest money deposit on the purchase of a $360,000 house. The mortgage lender tells us the appraiser cannot appraise it because he cannot find comparable nearby home sales. If there is no way to locate any comparables, and the house is overpriced, the lender won’t approve our mortgage. If we have to cancel the purchase, can we get our $40,000 refunded?

Answer: Don’t give up so easily. I hope you made obtaining a home loan a contingency clause in your purchase contract. If you did, and you applied with several mortgage lenders who all refused to appraise the house because of lack of comparable home sales nearby, you are entitled to a full refund of your $40,000 deposit due to inability to obtain a mortgage. However, if you applied with only one lender, if I were the seller I would argue you forfeited your deposit for failure to use good faith to obtain a mortgage. However, I am surprised that appraiser was unable to appraise the house. If there were really no comparable nearby home sales, the appraiser should have used another appraisal method such as replacement cost.

Siblings fight over co-owned home

Question: When my father died, he left his home to my three sisters and me. One of my sisters lived in the house until she died last year. Now we are preparing the house for sale. But our problem is one of my sisters refuses to sell. She lives out of state in Hawaii and is mentally depressed. What can we other sisters do to sell this home?

Answer: Without the signatures of all the co-owners, marketable title to the home cannot be delivered to a buyer. It might be necessary to get a court-appointed conservator or guardian to represent your sister in Hawaii. If your sister is mentally competent, then your legal remedy is to bring a partition lawsuit to force the sale of the house. Please consult a local attorney as well as a title insurance company to determine the best course of action under the circumstances.

It might be better to inherit than buy

Question: I am trying to prepare to inherit a valuable home that has been in our family for more than 50 years. I have no desire to sell it. Is it better to wait to inherit it or should I buy it?

Answer: It is always better to inherit property than to receive it as a gift before the owner’s death. I will presume your benefactor has not yet died.

Before you can receive title, federal estate tax must be paid by the estate if assets exceed the $1-million exemption and the decedent dies in 2003. If you buy before the owner dies, there won’t be any advantage.

Neighbors can’t dictate fence rules

Question: We bought a house where a neighbor recently paid to erect a fence, which appears to be on the boundary line. He is limiting what we can do on our side of the fence because he paid for it. What latitude do we have in sharing the fence?

Answer: Your neighbor has no legal right to dictate what you do on your side of the fence. If it is exactly on the boundary, you are co-owners. You can plant anything you want on your side as long as it doesn’t damage the fence. Of course, if vines climb up the fence and over on his side, he can cut them at the top.

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Letters may be sent to 251 Park Road, Burlingame, CA 94010, or https://www.bobbruss.com .