Homeowner makes big mistake when adding in-laws to title

DEAR BOB: I bought a property, as a married man, as my sole and separate property under my name alone. Then I added my wife and the in-laws to the title. We refinanced and I signed a deed to my in-laws. The title and mortgage is in their names. It seems like they don’t want me to go back on title. Is there anything I can do? I made the down payment from my 401k plan. Please help. –Eric D.

DEAR ERIC: Why would you foolishly add your in-laws to the title to your property? That makes no sense.

Purchase Bob Bruss reports online.

Worse, unless you have horrible credit, why would you transfer your interest in the property to your in-laws? Was refinancing that important to give up your ownership?

Now there is nothing you can do to force them to deed the property back to you unless you can prove fraud, duress or mistake. Please consult a local real estate attorney for details.

GET EXPERT ADVICE WHEN SELLING PART-HOME AND PART INVESTMENT PROPERTY

DEAR BOB: We live in a very nice apartment, which is located upstairs from a commercial grocery store, which our family owns and operates. It has been a very convenient arrangement for the 23 years we owned the store and lived above it. Not many folks have the luxury of just walking downstairs to the work they love. But we had an opportunity to sell the convenience grocery store to a relative at a handsome profit. Now we are thinking of selling the property, subject to the 25-year grocery store lease. Our nice problem is our net profit will be around $800,000 for the sale of the building. My wife and I can shelter $500,000 of that with the principal residence sale tax exemption you often discuss. Is there any way to avoid paying tax on the remaining $300,000 profit? –Hugo V.

DEAR HUGO: Congratulations on your profitable situation.

Yes, you can sell your combination principal residence and business property and avoid paying tax on your handsome profits. Please consult an experienced tax adviser for complete details.

Be sure that tax adviser is familiar with Internal Revenue Procedure 2005-14. It permits concurrent use of both Internal Revenue Code 121 for the sale of your principal residence portion of the property and Internal Revenue Code 1031 for the tax-deferred exchange of the business or investment part of the property by trading for another business or investment property of equal or greater cost and equity.

HOW TO GET STARTED SELLING REAL ESTATE

DEAR BOB: About eight months ago, I received my real estate sales license. Since then I have been working in a large brokerage office where I have yet to make a sale. My manager is very supportive. However, I feel she is losing confidence in me. So am I. What can I do to get started selling homes? I have been trying to get listings, and have taken floor time to work with buyers, but no sales so far. Fortunately, my husband has been very supportive, but we need more income. Any ideas? –Sharon V.

DEAR SHARON: I notice your letter is postmarked from a large city and you are working with an excellent brokerage firm. However, maybe you are trying too hard.

If your brokerage firm has an active rental department, I suggest you ask to transfer to rentals and become a “rental agent.” The result will be almost immediate rental commissions when you rent a house or apartment.

If your brokerage doesn’t handle house and apartment rentals, perhaps you should switch to another brokerage or property management firm, which specializes in residential rentals.

Then keep in touch with your renters with a monthly newsletter. If you did a good job for them, when they are ready to buy a house or condo you will be the first person they call. You can then gradually ease into residential sales.

I know several super-successful realty agents who started out as rental agents for immediate income and then switched to the “big money” of house and condo sales.

The new Robert Bruss special report, “Pros and Cons of Fast and Slow House Flipping for Big Profits,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet 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).