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posted: 7/30/2011 12:01 AM

On homes and real estate: For sale by owner

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Q. What happens if I have an agent and I find a house for sale by owner? Does the agent get a commission?

A. That depends on what you mean by "I have an agent." If you've simply been working with a broker who has been showing you houses for sale, you wouldn't have any obligation to use his or her services on some other property. But if you have specifically hired an agent in writing to represent you as a buyer's broker, the answer would lie in the contract you signed.

Q. My wife and I bought an investment property in my wife's relative's name and mortgage. We paid all the closing costs and the down payment. And we are also paying the monthly mortgage payment. The monthly rent income is being credited to our account. How can we protect our interest if something happens to my wife's relative?

A. You should certainly have consulted a lawyer before you made that investment, and a lawyer is what you need now as soon as possible. Take along all the documents you have about the deal. You need advice about your income tax returns as well as what, if anything, can be done to protect your investment.

Q. We have been looking for a long time for a good deal on a great family home on the water near our own community. We have a list of what we want: a flat driveway to ride bikes and play basketball, enough grass to play games, reasonable walk to water, nice kitchen, not too much or too little space, etc.

We found a home that has many pluses. But it is on property that was apparently shared by three owners who used common paths and land in cooperation. But now, as everyone is getting older (in their 80s), these friendly arrangements seem to us impermanent. Some day these neighbors will move, and then what will become of these friendly understandings?

Besides, it seems there's some family disagreement about really wanting to sell.

I feel like the two brokers (ours and theirs) are motivated for the deal, so I can't rely on their impartiality. My husband says that we should just make an offer and see what happens. That would certainly be the case with a normal situation. What do you think? Who can I consult? An attorney couldn't advise on the mess factor, could they? Am I making too big of a deal about the ifs and maybes?

A. You're right in thinking you can't expect agents to be impartial. They're not legally supposed to be. And there's nothing wrong with them being "motivated for the deal" -- that's what they're hired for.

A seller's agent is duty-bound to act in the seller's best interests, which would include helping negotiate the highest possible sale price. And if you've specifically hired your own buyer's broker, he or she is required by law to put your interests first -- which would require just the opposite. What makes it all work is that both agents have also been retained to help bring buyer and seller into agreement.

No matter how much money is available, every house is always a compromise. No property will ever meet all of your requirements.

You need a local attorney to investigate the legal status of the common areas and to suggest whatever would tidy up the current arrangements. Sorting this out will benefit all three properties.

I'd suggest making an offer, which is contingent on the common area being legally formalized. Unless that could be done, the contract would become void. You'd have nothing to lose.

But frankly, I'd hate to be the broker trying to bring about a meeting of the minds between reluctant buyers and reluctant sellers.

Q. We currently own a home, which according to Zillow.com is worth $329,000. We bought it for $350,000 and owe $334,000 on it. We would like to downsize, but we can't figure how to get out of this home and have something for a down payment on the next home! Any suggestions?

A. You're pretty fortunate compared to many people who write me. Assuming the buying public agrees with Zillow, you could sell by putting up only $5,000 of your own money to clear the mortgage. If that would leave you penniless, and you do want a smaller home, perhaps renting would be your best bet.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

$PHOTOCREDIT_ON$ 2011, Creators Syndicate Inc.$PHOTOCREDIT_OFF$

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