Let's say you're having trouble finding a rental. Maybe you've been turned down by a couple of landlords because your credit isn't all that good. Maybe you need a place that'll allow your sheepdog. Whatever it is, you have to keep trying. You answer an ad and drive the family out to meet one more landlord, and -- pleasant surprise! -- things are finally looking up. The house is vacant, and you can move in as soon as you'd like. The owner agrees to take a chance on you financially. There's a bad moment when he requests first and last months' rent plus a security deposit. But when you can't quite manage that, he's still obliging. He likes your looks, and he'll trust you for the last few hundred dollars.
What a relief! It's almost too good to be true. And -- it's not true.
Particularly in areas with vacant houses, some would-be tenants recently have paid substantial deposits on vacant houses, only to learn that the person who took their money didn't own the house at all. More than one family has even moved in before finding they'd been scammed.
In some cases, the supposed landlord shows only the exterior of the property. "Oh, heck, I forgot the key, but I'll get it to you tomorrow."
Other times, the landlord has gained entrance to the house and can show you around. "I'll leave it open if you want to move in right away, and you can change the locks." And he may show other tenants around an hour later and rent the place several times over before vanishing.
I've been trying to think how you could protect yourself. For starters, you could make your deposit with a check rather than cash. Public records can tell you who owns any property. It'd be awkward to check the county's records online every time before you started out. But even after you've handed over a check, you might research the ownership in time to stop payment.
At any rate, it's perfectly reasonable to ask to see some identification before you hand thousands of dollars over to a stranger and to write down the license plate of the car in the driveway. That's about all I can think of. If any readers out there have suggestions, let's have 'em.
Q. We bought our house in 2010 and got a first-time homebuyer credit of $8,000. It was to be repaid only if we moved out before three years were up, which we didn't plan to do. But last year, my company transferred me out of town, and we had to move. The new office was more than 200 miles away, which is more than commuting distance. Because I couldn't help it, do I get any special break on repaying that $8,000?
A. The only exception to that repayment requirement is if you move because of military orders. But all is not lost. You won't owe any repayment unless you made money on the sale. If you had a profit of $8,000 or more, you have to repay the whole $8,000. If your gain was, say, $5,000, that's what you owe. And if you lost money on the sale, Uncle Sam won't add to your troubles.
These rules apply to tax credits for homes bought in 2009 and 2010. First-time buyers in 2008 received a $7,500 credit that was really an interest-free loan, and they've been repaying it gradually, adding $500 to each year's income tax bill.
Q. We have a nice house and a small cottage. We have been thinking about selling the cottage. I don't know about the capital gains. How would that impact us on a $150,000 sale? We bought it in 2003. Could I put our big house in our children's names? Could that help over the years?
A. You'll owe capital gains tax (which is at a fairly low rate right now, by the way) on the profit from the sale of your cottage. From your sale price, you subtract original cost, money spent on permanent improvements over the years, and legal costs of buying and selling. What remains is your taxable gain.
Putting your home in your children's names wouldn't make much sense, but maybe I don't understand what you're trying to accomplish. Talk the whole thing over with your lawyer or a certified public accountant.
Q. You said reverse mortgages are not scams, but I've read that they are.
A. In the past, some unscrupulous lenders persuaded older homeowners to finance the purchase of worthless investments by taking out reverse mortgages. "Won't cost you a penny out of pocket." New rules don't allow a reverse mortgage lender to sell you any investment.
• 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.
© 2012, Creators Syndicate Inc.