DEAR BENNY: I came to the U.S. from Eastern Europe four years ago with my wife. We have been looking for a house for some time but haven’t found one yet. Our offers were either not accepted, or if the offer was accepted, the seller took the house off the market one week later.
I feel that our real estate agent is not working for our best interest and this is the reason that I decided to e-mail you. I believe that our agent is working hand in hand with other agents and they are setting up everything on the market.
We’ve put in six offers till now (all between 93 percent and 98 percent of the asking price, plus 2 to 4 percent for closing costs) but they were not accepted. Our agent always asks us to sign a paper that says we take back our offer, even before the offer is accepted.
With our last offer, we first offered 97 percent of the asking price and asked for 4 percent of the closing costs. The seller’s agent suggested asking for just 2 percent of the closing costs, which we accepted, but the seller still didn’t accept our offer.
What are the legal steps after we made an offer and our offer isn’t accepted? Should we receive a rejection letter from the seller (or his bank if it’s a short sale)?
Is it OK to put more than one offer at the same time? Our agent doesn’t want to do this for us.
Why does our agent tell us to offer more on a house than the asking price? This doesn’t look fair for me because I know he gets a percentage of what we pay. –Marco
DEAR MARCO: First, I strongly suggest you get another real estate agent. I also suggest that you consider hiring a real estate attorney who can walk you through the process.
When you make an offer, the seller has three alternatives. He or she can (1) accept it, (2) reject it, or (3) make a counteroffer. If your offer is accepted, you have a valid real estate contract and the seller cannot change his or her mind and try to take the house off the market.
Of course, if you have contingencies in your contract, such as obtaining an acceptable home inspection report or getting the appropriate financing, you can cancel the contract if you cannot meet those contingencies.
If your offer is rejected, generally a seller (or the seller’s agent) will tell this to you, but there is no legal requirement for a seller to formally reject an offer. The law is clear: Until a seller takes any of the three alternatives raised above, a potential buyer can withdraw the offer.
And if the seller counters your offer, you have the same three alternatives.
Why is the agent suggesting that you offer more than the listing price? That’s not unusual where markets are hot and houses are selling quickly. But in today’s economy, that’s generally not the situation.
Finally, you asked about making several offers. I assume you are proposing making offers on more than one house at the same time. That’s not a good idea; what happens if you make offers on two different houses and both sellers accept? You could be stuck legally with two sales contracts, and could lose your deposits — or be sued for breach of contract.
Please get a lawyer to assist you.
DEAR BENNY: I recently inherited my mom’s home, valued at $136,000. Unfortunately, she had a home equity line of credit (HELOC) on it for $66,000. Apparently, a relative talked her into getting this loan to start a small business. Of course she was stuck paying the loan, and the payments are current.
I would like to move into the home but have had no luck with Wachovia transferring the loan to my name. What are my options? I really do not want to refinance because her interest rate was 3.25 percent, which is fantastic. I am at a loss. I am maintaining all the expenses of this home but receive no benefits. –Sheila
DEAR SHEILA: First, have you probated your mother’s estate? Depending on how she held title to the house, you may have to go to probate to make sure that the house is really in your name. If title was held in both your names as joint tenants with rights of survivorship, then you will automatically own the house.
(Note: Not all states use the same terminology, so you should consult a local attorney for clarification of who currently owns the house.) …CONTINUED
But if the house was in your mother’s name only, then title is in "legal limbo." In other words, until a probate court issues a final order, you cannot do anything with the house legally.
You state that the current interest rate is 3.25 percent. Have you reviewed the legal documents relating to the HELOC? Although I have not seen those papers, I suspect that the interest rate is variable — in other words, it may be readjusted periodically, possibly every year.
Now to your specific question: Back in 1982, Congress enacted what is known as the Garn-St. Germain Depository Institution Act. Although this law deals with a lot of subjects, one of them relates to your situation.
In most mortgages, there is a provision known as a "due on sale" clause. This means that if a house is sold or transferred, the new owner cannot automatically assume the old loan.
However, the 1982 law imposed a number of restrictions on lenders who want to use that due-on-sale clause. Specifically, the language is as follows:
"With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon … a transfer to a relative resulting from the death of a borrower."
You appear to fall under this exemption. You are a relative who inherited the house from your mother. I would talk to bank representatives and refer them to this law. If they continue to object, I suggest that you retain a lawyer to assist you. You can also file a formal complaint with the Office of the Comptroller, a federal agency that regulates national banks.
DEAR BENNY: My mother, who recently died, left a notarized will naming my brother as the executor. It was her wish to sell her mobile home (which sits on my land) and divide the sale among the five of us. My brother says the will is invalid because it was not registered with the court. I don’t know if this is true, but now the house sits in limbo.
I want to sell it and go on with my life. My brother does not seem to be in a hurry to get on with things. How can I sell the house if he is the executor? (I live closest so it’s easier for me to get things together — all my siblings are a plane ride away.)
We have a person who is interested in buying the house and land. Does this need to go to probate? It seems to me that because she left a will, it will be pretty cut and dry. –M.
DEAR M: Nothing in law is "cut and dry," but as I often suggest to readers, talk with a local attorney who understands real estate and probate law.
I don’t know the laws in your state, but suspect that it is not necessary to register the will until the author of that document dies. But, yes, you will need to probate your mother’s estate.
If your brother is not in the same state where the property is located, your state law may not permit him to be the personal representative. Your attorney can provide answers to this issue also.
If your brother has not opened up a probate estate, you can petition the court to open one, and the court will either force your brother to act as the personal representative or will appoint someone else — such as yourself — to act in that capacity.
But until probate is completed, you will not be able to sell the property.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to email@example.com.
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