DEAR BOB: We had a horrible experience with our listing agent. She lied to us about the status of our home sale after we thought we had a solid sale. Long story short, our buyer was not pre-approved by an actual lender (he had only a worthless pre-qualification by a mortgage broker), as our listing agent misrepresented to us. This went on and on for four months before we realized our agent was lying to us and the buyer couldn’t financially buy our home. After the listing expired, we sold our home to a friend and saved the sales commission. But I was so upset, I filed a written complaint with the local Realtor association. Two months later, all I received was a rude letter from the association director saying the Realtor had been warned to be more cautious in the future. Why didn’t they kick the guy out? – Claudia I.
DEAR CLAUDIA: Realtor associations rarely discipline their members by kicking them out of membership. The reason is the associations don’t want to get sued by their disciplined member for deprivation of the ability to earn an income.
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Although the Realtors heavily advertise their code of ethics, and they do enforce it when a complaint is filed against a member, they rarely remove an active member because they might get sued.
Your best recourse is to file a complaint against that wayward realty agent with your state real estate commissioner. If there was a state real estate law violation, the real estate commissioner might revoke that agent’s license.
PAY SMALL MORTGAGE WITH HOME EQUITY LOAN OR REVERSE MORTGAGE
DEAR BOB: I am a widow, mid-70s, with an 8.25 percent interest rate mortgage. I owe about $33,000 and would like to refinance. But because my balance is so low, mortgage lenders don’t want to help me. I have only Social Security and a retirement check, which gets smaller each year. What should I do? – Jean M.
DEAR JEAN: You have two excellent choices. One is to take out a home equity loan to pay off that $33,000 mortgage. Most such loans are at the prime interest rate (6.5 percent as I write this) and you can pay interest only to reduce your monthly payment to rock bottom.
However, you might not have enough income to qualify for a home equity loan. But don’t despair. You have a better alternative.
As a senior citizen homeowner over 62, you qualify for a home equity mortgage. You can select the lump sum alternative to pay off that $33,000 balance. Then you can use your excess reverse mortgage entitlement to receive lifetime monthly income, or a credit line (except in Texas). In your situation, a reverse mortgage can help you enjoy your retirement years without cash worries.
WHY LAND LOANS ARE HARD TO OBTAIN
DEAR BOB: Several years ago, I inherited about 140 acres of Southern Pine timberland free and clear. It had been recently harvested so I am waiting for the trees to regrow from new planting. Meanwhile, the land produces zero income and I have to pay the property taxes and other expenses. I am told this land is very valuable. But I can’t find any bank or other lender willing to make me a mortgage loan. Any ideas? – Jon R.
DEAR JON: Land loans are very risky for mortgage lenders, especially if the land doesn’t produce any immediate income. Also, you have a risk that a forest fire might destroy your pine trees. Perhaps selling is your best alternative if you need cash.
The new Robert Bruss special report, “The 10 Key Questions Condo Sellers Hope Buyers Don’t Ask,” is now available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant PDF Internet delivery at www.bobbruss.com. Questions for this column are welcome at either address.
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