DEAR BOB: I was divorced over 25 years ago. My ex-husband and I held title to our home together. Since he didn’t show up in court, the judge ordered in the divorce decree that my husband “quitclaim” our property to me. But he never signed the quitclaim deed. My attorney said it wasn’t necessary because of the judge’s ruling in the divorce decree. My adult daughter is concerned that because my ex-husband never signed the quitclaim deed, he could, after my passing, come back and claim half of the property. Should I take any action now? –Barbara V.

DEAR BARBARA: Yes. Your daughter’s fears are well-founded. It would be best to clear the title of your ex-husband’s name now.

After you die, he might show up to claim half of the property. Your daughter would then have to bring a quiet title lawsuit to clear his name off the title, using the divorce decree as evidence.

Purchase Bob Bruss reports online.

Presuming your ex-husband is still alive and can be located, you could bring a quiet title lawsuit against him to clear up the title now. When faced with a lawsuit, he might gladly sign a quitclaim deed to you and that would easily solve your problem at minimum expense. Also, if you wish to sell the property, you will need to clear his name off the title, and the divorce decree alone might not satisfy most title insurers.

LIVING TRUST WITHOUT ASSETS IS EMPTY

DEAR BOB: I was shocked to learn from your recent article that I should deed my residence and rental property into my revocable living trust. I have a living trust that specifies how my assets are to be distributed after I die. Do I have to sign a notarized quitclaim deed in recordable form from myself to myself as trustee of my living trust? –Hugo T.

DEAR HUGO: Yes. Until you transfer title to your real estate into your living trust, you have an “empty trust.”

If you die tomorrow, your named successor trustee (such as an adult child or a bank trust department) would have no authority to distribute assets that are not part of your living trust. They would have to be distributed through the local Probate Court, often taking a year or longer.

It is a simple matter to execute and record a quitclaim deed to yourself as trustee of your living trust. Be sure to record that deed. Then, when you die, your successor trustee can distribute the living-trust assets as you directed in the living trust, usually within a few months after your estate bills are paid.

CAN HOME BUYER PAY MORE THAN 20 PERCENT DOWN PAYMENT?

DEAR BOB: My husband and I are able to pay more than a 20 percent cash down payment when we buy our next home. However, the mortgage lenders we consulted seem to be against our making a larger down payment. We prefer to make a large down payment to lower our monthly mortgage payment. Is there a valid reason for a 20 percent down payment or should we keep searching for better mortgage lenders? –Prastavna M.

DEAR PRASTAVNA: Most mortgage lenders love to approve easy “slam dunk” home loans where the borrower pays 20 percent or more for the down payment. The larger the down payment, the safer the mortgage for the lender so you will probably get the lowest available interest rate if you have good income and good credit.

Shop around. You contacted the wrong lenders who want to maximize their loan amount and their fees.

However, please don’t tie up a major portion of your liquid assets in your next home. Don’t be property rich but cash poor.

I suggest making up to a 25-30 percent cash down payment. Then you won’t have a large amount of cash tied up, just in case you buy a “bad house.”

NO EASY WAY TO GET OUT OF AN EXCLUSIVE RIGHT TO SELL LISTING

DEAR BOB: We listed our empty condo for sale with a realty agent until October 2007. She is unable to do an open house every weekend, so hubby and I went over and held an open house. We think we have a buyer. The listing contract says we owe the agent a sales commission whether we find a buyer or she does. This is was our second open house, and the agent wants us to hold another open house next weekend. She did not return our phone calls so hubby went out and bought some “for sale” signs. We are willing to pay a sales commission, but we want to be paid for our time. When I finally talked to her on the phone, she said to tell the buyer to phone her. Suppose I just take the buyer to the title company? Or can I sell to the same buyer after the listing expires? Any tips on firing a lazy agent and getting paid for our services? –Patty H.

DEAR PATTY: You are the “stuckee.” Why did you sign such a long exclusive-right-to-sell listing until October 2007? No wonder your listing agent is so lazy.

She has no time-deadline incentive to get your condo sold fast. As regular readers know, I recommend 90-day listings, with extensions if the agent is doing a good job.

Forget about getting paid or reducing the sales commission for the time you spent holding the condo open houses.

When a buyer wants to make a written purchase offer, it’s up to you to accept, counteroffer or reject that offer. If you make a sale behind the listing agent’s back, such as by going direct to a title company or having a real estate attorney handle the closing, the listing agent can sue you for the full sales commission.

If you wait to sell until after the listing expires, you will have more months of lost rental income; and, if you have a mortgage, more mortgage payments; and that agent still might sue you for the sales commission.

REFI OVERLAP INTEREST SHOULD BE ONLY A DAY OR TWO

DEAR BOB: How much overlap in interest payments between the old and new loan on a mortgage refi is appropriate? We just closed a refinance. The final closing was dated June 14 with the old loan interest paid through June 16. The title company says we are entitled to a two-day interest refund. The new mortgage funded on June 11, and we started paying interest that day. The old loan was $250,000, and the new loan is $340,000. The title company blames the delay in “recording at the county” since they didn’t get confirmation of the recording until June 13. This does not seem right. The title company says this is “standard.” Are we getting ripped off? –Rick R.

DEAR RICK: A one- or two-day interest overlap is normal when refinancing. But every county records deeds on the day the deeds are received at the county recorder’s office.

The date your title company received a confirmation of the recording is irrelevant. You are being misled by the title company.

I suggest you write a polite letter to the manager at the title company with a detailed demand amount for receiving an interest refund check within 10 business days. If you don’t receive a refund check for the amount of overcharged interest, then you can decide if it is worth your time suing the title company in local Small Claims Court for the disputed amount.

NO EASY WAY TO FINANCE HALF OF A HOUSE PURCHASE

DEAR BOB: My “significant other” wants to buy a half interest in my house. I am willing to sell a half interest. We live together but, for several important reasons, are not married. The house is worth at least $400,000. How can he get financing to buy a half interest in my house? –Kelly F.

DEAR KELLY: I don’t know of any mortgage lenders willing to make loans secured by a 50 percent interest in a house.

Legally, it is possible for your buyer to pledge his half interest as security for a loan. But the interest rate will be high and the lender is likely to be a loan shark.

DISCLOSE UNPERMITTED RENOVATION

DEAR BOB: Eight years ago we hired a handyman to finish our basement. He didn’t mention the need for a building permit and we didn’t realize we needed one. Now we want to sell our home. Will the lack of a building permit pose a problem? –Marie C.

DEAR MARIE: Be sure to disclose in writing that the basement renovation was done without a building permit. Depending on the facts, many buyers will go ahead with the purchase, but some won’t or they will insist on a price discount.

The new Robert Bruss special report, “Pros and Cons of Investing in Rental Houses and Condominiums,” 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
).

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