DEAR BOB: You recently advised a condo owner who could not get any satisfaction from his homeowner’s association board of directors to sell and move on. I highly disagree. We had a similar situation where we live. Our condo board of directors was as corrupt as you can imagine. Finally, several of my neighbors and I decided (instead of selling our condos) to do something about it. We ran as a “team” for the condo board of directors. The incumbents were shocked. We contacted every condo owner, even the absentee owners. The result was we threw out the incumbent directors and won by 69 percent to 31 percent for the opposition. Then we shockingly discovered the reserves were less than $500 per unit. We immediately voted, after two meetings and lots of publicity, to increase the monthly fees to raise our reserves. After two years, our reserves are where they should be, now well over $1,000 per unit; we threw out the old mis-management company and instituted tough anti-renter rules, which reduced our rental percentage to 14 percent. Instead of recommending condo owners sell out, why don’t you recommend they stay and fight? – Paula H.
DEAR PAULA: Congratulations on your success getting rid of those rascals and implementing good management for your condo association.
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Unfortunately, that is not always feasible. Sometimes, it is better to cut your loss and move out, as I recommended. But I am very glad you and your cohorts succeeded in turning around the operation of your condo association.
HOW TO BUY PROPERTY FOR UNPAID REAL ESTATE TAXES
DEAR BOB: I am told I can buy homes from owners who failed to pay their property taxes. Is this true? – Debra W.
DEAR DEBRA: Yes, you can bid at the local tax collector’s real estate sales for unpaid property taxes.
However, my experience has been you will rarely see a property with a house on it come up for tax sale. The reason, if the house has a mortgage, is the mortgage lender will receive notice of the pending property tax sale. The lender will then pay the property tax so the house never goes to a tax deed sale. Then, if the homeowner doesn’t reimburse the lender, the lender declares the mortgage in default and begins foreclosure.
The result is only properties that have no institutional lender will usually go to property tax sale. These are often vacant lots and other parcels of limited value.
SHOULD ATTORNEY CHARGE TO PROBATE A LIVING TRUST?
DEAR BOB: My sister died last June. She had all her major assets in her living trust to avoid probate. But when my brother and I went to see her attorney, he said it would cost about $2,800 to probate the estate. He demanded a $1,500 fee to handle the estate. I stupidly wrote him a $1,500 check. How much should it cost to probate an estate where almost all of the assets were in the deceased’s living trust? – Levin W.
DEAR LEVIN: If you and your brother are the named beneficiaries in your sister’s living trust, except for convenience, there is no valid reason why you would want to hire an attorney.
However, if there are assets that were not deeded into your late sister’s living trust, then you might need an attorney to probate those assets. Maximum attorney fees for probating an estate are usually set by state law. But most attorneys will negotiate these fees downward if you ask.
BUYING AT FORECLOSURE SALE REQUIRES CASH
DEAR BOB: My wife and I want to buy our first homes. Do you think we should buy a house at a foreclosure sale to save money? – Kirt K.
DEAR KIRT: Buying a property during the foreclosure process isn’t simple. If you buy at the foreclosure auction sale, in most states you must have cash (cashier’s checks are safer) either at the sale or shortly thereafter.
Most home buyers are unable to raise all the cash necessary to bid at foreclosure sales. However, there are other foreclosure purchase opportunities to either buy from the defaulting owner before the foreclosure sale, or from the foreclosing lender after the sale if no bidders showed up.
To learn more about how to acquire foreclosure bargains, I suggest you read my special report, “Pros and Cons of Earning Big Profits from Foreclosures and Bargain Distress Properties,” available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column may be sent to either address.
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