DEAR BOB: You recently suggested to another reader that she list her home for sale with her area’s best Realtor. My question, as a person who has not bought or sold a home for many years, is how can I find my area’s best Realtor? – Ron T.

DEAR RON: First, I should explain a Realtor is a licensed real estate agent who is a member of the National Association of Realtors and the state Realtors association. Realtors subscribe to a code of ethics, enforced by their local association, whereas non-Realtor real estate licensees do not. Of course, all licensed sales agents are subject to state real estate license laws.

Purchase Bob Bruss reports online.

Next, to find your area’s top-volume home sales agent, just phone the local association of Realtors. Ask for the names of their top five Realtors in sales volume for last year. Most associations are glad to publicize those names of their most successful agents.

However, be sure you get the names of agents who specialize in your area. Don’t waste your time considering any agent who doesn’t sell homes in your vicinity.

When you’re ready to list your home for sale with a top agent, be sure to also include the agents who “farm” your neighborhood. That means they have probably sent you a mailer once a month or so sharing news of neighborhood home sales.

In addition, ask your friends and neighbors for their recommendations of Realtors selling homes in your neighborhood. However, be sure your friends and neighbors have recently bought or sold a home through that agent.

From your list of successful realty agents, then interview at least three before listing your home for sale with the best agent.

The reason you want to interview three or more agents is so you can evaluate their listing presentations. Then you can compare their recommended asking price for your home, services they offer, and their client references of previous sellers.

Before selecting the best agent to list your home for sale, be sure to phone their client references. Ask, “Were you in any way unhappy with your agent and would you list your home for sale again with this agent?” You will soon know which agent should get your listing.

CLEAR YOUR TITLE AS SOON AS POSSIBLE

DEAR BOB: My wife and I owned our house together as joint tenants with right of survivorship. She passed away in December after fighting cancer for three years. Our home has many great memories for me and our two grown children so I have no plans to sell. Do I need to do anything about the title? My late wife’s will left everything to me. Do I need an attorney? – Marc S.

DEAR MARC: As soon as possible, you should clear the title to your home. For your situation, that is very easy. Unless something unusual is involved, you probably don’t need an attorney.

In most states, all that is usually required is to record an affidavit of survivorship and a certified copy of your wife’s death certificate. A phone call to your county or city deed recorder will provide the exact local recording requirements.

SHOULD TWO SENIOR HOMEOWNERS GET A REVERSE MORTGAGE?

DEAR BOB: I would like your opinion on reverse mortgages. My husband and I own our $190,000 home with no mortgage, live on a fixed income, and have a small amount in annuities and a small amount in savings. With the cost of everything going up, at our ages, 84 and 78, do you think a reverse mortgage could help us? – Mary M.

DEAR MARY: A reverse mortgage might be ideal for your “advanced ages” if you plan to stay in your home at least five years. If you are in poor health or want to move within a few years, a reverse mortgage might not be ideal.

The reason is the up-front costs can be high if you don’t use your reverse mortgage benefits for at least five years.

For your situation, an FHA reverse mortgage will probably be the best deal for you. The reason is the up-front costs are usually lowest on FHA reverse mortgages.

If you had a more expensive home, I would recommend a Fannie Mae or Financial Freedom Plan reverse mortgage. More pros and cons are in my special report, “Secrets of Tax-Free Reverse Mortgage Income for Senior Citizen Homeowners,” 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.

GOOD AND BAD ABOUT V.A. HOME LOANS

DEAR BOB: My husband and I want to buy our first home. But we have “credit challenges.” However, one of my husband’s Navy buddies told him about a Veteran’s mortgage he got last year. But when we checked in our area, we can’t find any VA mortgage lender. How can we get one of these VA home loans? – Marge T.

DEAR MARGE: There is exciting news about VA mortgages. Although the VA insured over 375,000 home loans in the last year, many mortgage lenders won’t touch VA mortgages because of the qualification red tape.

But the VA loan qualification rules are more liberal than for conventional loans so you and your husband can probably qualify.

The exciting news is the old low loan limit for VA mortgages has been removed. VA mortgages are now available up to $359,650 with nothing down. That is a $120,000 increase from the old rules.

Surely, you can find a local mortgage broker or other lender in your community who originates VA home loans. A good place to start is the phone book yellow pages under “real estate loans” where many lenders advertise VA and FHA mortgages.

HOW TO LEARN REALTY LICENSE REQUIREMENTS

DEAR BOB: I am a schoolteacher who wants to become a realty sales agent. But I live in a “dying community” where there aren’t any realty agents left. I realize I will have to move to a better area. How can I learn the real estate license requirements when I decide where I want to move? – Karen B.

DEAR KAREN: When you determine where you want to relocate, just write to the real estate commissioner (or similar title) at that state’s capital and ask for the real estate sales license requirements. You will receive a reply with the exact pre-license requirements for that state.

Every state requires new realty licensees to pass an exam. Most states also require completion of a pre-license course, such as Real Estate Principles.

After you pass the exam and start selling real estate, the state might also require you to complete additional courses within the first year to keep that license. But your goal should be to eventually obtain a real estate broker’s license, which will require additional courses and a tougher state exam.

SELL THIS HOME FAST TO AVOID CAPITAL GAINS TAX

DEAR BOB: My wife and I are debating whether we should sell our rental house. We moved out about 30 months ago. Our purchase price was around $150,000. Today, it is worth almost $600,000. If we sell this house for this price, will we have to pay capital gains tax? – Steven S.

DEAR STEVEN: If you sell that house within the next six months, your capital gain up to $500,000 can be tax-free.

The reason is Internal Revenue Code 121 says you can qualify for up to $250,000 tax-free principal residence sale profit (up to $500,000 for a married couple filing jointly) if you owned and occupied your home at least 24 of the 60 months before its sale.

You and your wife still qualify, although the rental house is no longer your principal residence. However, if you sell it more than 36 months after moving out, you lose this very generous tax exemption. For full details, please consult your tax adviser.

WHAT IS A CARRYBACK MORTGAGE?

DEAR BOB: You often use the term “carryback mortgage.” What is that? – Kathy H.

DEAR KATHY: A carryback mortgage is a first or second mortgage that the property seller “carries back” for the buyer to help finance the sale.

Sometimes a carryback mortgage is called an installment-sale mortgage. The big benefit for the seller is the capital gain tax can then be spread out over the years the seller receives principal payments from the buyer. However, interest received is taxable to the seller as ordinary income.

Carryback mortgages are good for both sellers and buyers. Buyers benefit by having to make smaller cash down payments. Sellers benefit by easy, quick sales for top dollar.

When I sell a property, I love to carryback a first or second mortgage because of the secured monthly income I receive. If my buyer defaults (which rarely happens), I can foreclose and either get paid in full at the foreclosure sale or get the property title back to sell for another profit.

The brand-new Robert Bruss special report, “2005 Realty Tax Tips: 8 Chapters of Tax Savings for Homeowners and Investors,” 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 Internet download 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
).

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

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