Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, April 16, 2006.

DEAR BOB: We recently purchased a beautiful waterfront home in the state of Washington. This will become our retirement home in three years, but we are reluctant to rent this home and are leaning towards having a housesitter live in it until we move in. This individual is highly recommended by our new neighbors. However, I read somewhere if we allow an individual to house-sit, we are granting “squatter’s rights.” Is that correct? This individual would not pay rent but will pay the monthly expenses. –Jeanine W.

DEAR JEANINE: “Squatter’s rights” (legally called a “tenancy-at-sufferance”) refers to occupancy without the owner’s permission. Obviously, your housesitter will occupy the house with your permission so you need not worry about squatter’s rights.

Purchase Bob Bruss reports online.

Be sure to consult your insurance agent in Washington to be certain you have adequate insurance for this unusual situation, including liability coverage in case the housesitter trips on a loose carpet, which could be considered negligence by you.

You need a written agreement with your housesitter so you can remove him or her at your will without cause. I suggest you consult a real estate attorney located near the property.


DEAR BOB: We are in the process of buying an older home in a great neighborhood with outstanding public schools. As you often suggest, we insisted on a professional inspection contingency clause in our purchase offer. We also accompanied the inspector to discuss the problems he discovered. Two defects that the seller did not disclose are: 1) the roof is leaking water into the attic, and 2) the foundation is sinking slightly in one corner, probably due to poor drainage, which can be corrected. But the roof will cost at least $12,000 to replace. How can we get the seller to pay for the repairs? –Josh R.

DEAR JOSH: Congratulations on including a professional inspection contingency clause in your home purchase offer. Although the seller made a good faith effort to disclose known defects, perhaps he was not aware of the roof leaks and the foundation problem.

The best approach is to reopen negotiations and ask the seller to give you a “repair credit” for the leaky roof and the foundation repairs. This is better than asking the seller to install a new roof and fix the foundation. The reason is most sellers will hire the cheapest contractors who might not do a quality job.

A repair credit usually doesn’t affect your mortgage eligibility amount or the appraised market value. If your seller refuses to give you a repair credit, you can always walk away.

In today’s slowing home sales market, you can be sure the listing agent will help with negotiations. But don’t be unreasonable. It’s a good deal for both parties if the seller agrees to credit you with half the cost of a new roof.


DEAR BOB: My wife and I own a two-thirds interest in a nice house with a pool. The other one-third belongs to the occupant who is not taking care of the property, is on food stamps, and is not likely to repay us or buy us out. How can we sell our interest in this house without a partition lawsuit? Private investors suggest paying him off to get him out. They offered us only a fraction of full-market value. –John L.

DEAR JOHN: You were very lucky to find anyone who would buy a two-thirds interest in a house. Without a partition lawsuit to force the sale of the property, you can’t force the occupant to sell.

Just because the resident is “down-and-out” doesn’t mean he should be able to keep you from selling. I suggest you remind him that if he sells, he will receive one-third of the net sales proceeds.

If I were an investor interested in buying that property, I would make you a very “low-ball offer.” After you accept and taking title to your two-thirds interest, I would bring a partition lawsuit to force the sale of the property at full market value, thus making a “quick-flip” profit. For more details, please consult a local real estate attorney.


DEAR BOB: We had a sales contract to sell our house. The buyer was supposed to pay a deposit into a trust account with the realty office representing the buyer. We expected to close with no problem. But a few days after the scheduled closing date, the buyer’s agent told us the buyer is a “fraud” and passed forged checks for the deposit and the down payment. The agent cannot locate the buyer. Does the buyer’s agency have any obligation to us to pay the deposit, which was supposed to be in a trust account? –Charles S.

DEAR CHARLES: That dishonest buyer’s agent should be reported to both the state real estate commissioner (for possible license revocation) and to the local Association of Realtors (for discipline) due to breach of fiduciary duty to you.

There is no valid excuse for not promptly telling you the buyer’s good-faith earnest money deposit check bounced.

However, I would not bother suing the buyer’s agent because proving your loss might be difficult and costly. I suggest you move on. However, your listing agent should have been monitoring the situation so perhaps he or she should share the blame too.


DEAR BOB: I am thinking of selling my home to one of those “we buy houses” companies. They claim to buy “as-is.” They ask the seller to inform them of any repairs needed, but they also say if the seller does not inform them of any necessary repairs, they presume repairs are necessary anyway. This firm offered me a very low price. If accepted, they then perform a “due diligence” inspection before the contract is final. Does the fact that they assume repairs are necessary and that they highly discount the sales price change the seller’s legal liability for repairs? –Mark P.

DEAR MARK: Most states now have laws and court decisions requiring home sellers to disclose known defects of the residence in writing. Making an “as-is” home sale is not a method to avoid liability for undisclosed defects of which you are aware.

If you sell to those professional buyers at a price heavily discounted from market value, you should insist on a written waiver in the sales contract that you have disclosed all known defects, and the buyer has investigated and will not hold you liable for any latent (hidden) defects that might become evident later. For more details, please consult a local real estate attorney.


DEAR BOB: I read in the AARP newsletter that Internal Revenue Code 121 will expire in 2007 but that it will be extended if Congress passes President Bush’s 2007. Do you have any further information on this topic? –Helen K.

DEAR HELEN: There is no such expiration date in Internal Revenue Code 121, which provides principal residence sale tax exemptions up to $250,000 for a qualified single home seller and up to $500,000 for a married couple filing a joint tax return.

If there were such a provision in either IRC 121, or President Bush’s proposed 2007 budget, you can be sure the National Association of Realtors (the nation’s largest trade association with over 1.2 million members), the National Association of Home Builders, and other real estate groups will be extremely vocal to stop such an irrational tax law repeal.


DEAR BOB: I own a house that has been rented to tenants for many years. Now we want to use this as our primary residence and sell it after 24 months. What documents should I have to prove to the Internal Revenue Service this is indeed my primary residence so I can claim the $500,000 exemption of Internal Revenue Code 121? –Deb S.

DEAR DEB: Just move in. Save your utility bills and other evidence of principal residence occupancy. Be sure to file your income tax returns from your new principal residence, change your car registration, driver’s license, bank accounts, etc. to your new address.

You mentioned “we.” If your spouse is not on the title, that’s all right as long as he also meets the 24 out of last 60 months before sale occupancy test. However, if your co-occupant is not your spouse, he or she must be on the title to claim their $250,000 principal residence sale tax exemption. For more details, please consult your tax adviser.

The new Robert Bruss special report, “How to Sell Your House or Condo for Top Dollar With or Without a Real Estate Agent,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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