Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 16, 2006.
DEAR BOB: My parents divorced in 1995. The judge gave the house to my mom, but she had to either sell it or keep it and refinance the mortgage. She wanted to keep the house. But she couldn’t refinance because her debt-to-income ratio was too high. So my mother gave me a quitclaim deed, signing the house over to me, and I helped her refinance with a new mortgage. Now I want to get my name off the title and put my mother back as sole owner, as she desires. If I do that and my mother dies, am I responsible for the mortgage payments although I don’t hold title? What do I need to do to quitclaim the house title back to my mom? Do I need to go through a title company? –David P.
DEAR DAVID: If you are now on the title alone, you can sign a quitclaim deed to your mother. However, you will still remain liable to make sure the mortgage payments are made even when you don’t hold title to the property.
Purchase Bob Bruss reports online.
When your mother dies, the title to the house then goes to whomever she names in her will or revocable living trust.
You don’t need to go through a title company to quitclaim your title to your mother. The deed must include a legal description of the property, usually with its parcel number, and your signature must be notarized so the deed can then be recorded to transfer title to your mother. For full details, please consult a local real estate attorney.
BE CAREFUL ABOUT HELPING ELDERLY NEIGHBOR
DEAR BOB: Our next-door neighbor, Charlie, is about 65 and retired. He is divorced and lives alone in his house. In 1995, he and his ex-wife bought the house for $220,000. Today, it is worth around $650,000. The ex-wife is asking that he now sell the house to pay off its $187,000 mortgage to get her name off the mortgage so she can receive her half of the profit. Charlie doesn’t want to sell the house and move. He is a wonderful man and neighbor. My wife and I trust him completely and are willing to use our liquid assets to help him stay in his house. We are thinking of buying the house from him for cash and then selling the house back to him. Or perhaps we can loan him the money to pay off the mortgage and buy out his wife’s share, with him getting a home equity line of credit (HELOC) to pay us back. Your thoughts please –Ashley S.
DEAR ASHLEY: If Charlie can qualify to get a HELOC for the amount needed to buy out his ex-wife and pay off the existing mortgage, let him do it on his own. No sense in you getting involved in a potentially messy situation.
If he can’t qualify for a new mortgage, perhaps you can buy the house and rent it back to Charlie. That would give you the rental property tax benefits and Charlie (and his ex-wife) can each claim their $250,000 principal residence sale tax exemption up to $500,000 total. For more details, you and Charlie should consult your tax advisers.
IS A TAX LIEN CERTIFICATE SEMINAR WORTH $2,495?
DEAR BOB: I recently attended a motivational real estate conference at a fancy hotel with a free lunch and a well-known ex-NFL quarterback as the special guest. The speaker claims investing in tax lien certificates will return a yield of 16 to 36 percent from counties across the U.S. The price for his seminar package is $4,285, but as a “nice guy” he offered it at a special discount price of just $2,495. I smelled a shark so I didn’t jump in the water. But many people bought the seminar. Are tax lien certificates really this lucrative? –Ken Y.
DEAR KEN: Congratulations for not spending the $2,495 for that tax lien course. Yes, tax lien certificates can be very profitable investments. However, you’ve got to know what you’re doing if you want to avoid losing money.
An excellent book (cost less than $25) you can read on this topic is “Profit by Investing in Tax Liens” by attorney Larry B. Loftis. It is available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
The new special report, “Probate Property Profit Secrets Revealed,” by Robert Bruss 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 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).