Q. We have a beautiful home that has been on the market four months, one that our Realtor referred to as "a shiny penny." People say: "It's beautiful … but …" We reduced the price once ($10,000), and we have sold it twice. One offer fell through because of a contingency and the other because the people got cold feet and bailed with the inspection.
We don't think it's the price; after all, it has sold twice. People are still coming to see it, but we think it is getting stale. Also, we have bought another home and closed on it last month.
Both my husband and I are frustrated and depressed, and it is difficult taking care of two houses. I am taking it personally, because I think I decorated it very nicely, and I see it as a rejection. Now that all the repairs have been done (at considerable cost), my husband is reluctant to lower the price further.
This situation is taking its toll, and we need a solution quickly. Our 50-plus-year blissful marriage is suffering. My husband has been maintaining the property in pristine condition, so he still has an emotional tie to it. I, on the other hand, want to move forward with plans for the new house. I guess I'm asking you to be a marriage counselor. Our Realtor isn't sure if we should reduce the price or just hang in there. And what do we do with our emotions concerning the whole thing?
A. Your house didn't sell twice. It failed to sell twice. You never had a willing and able buyer -- your first wasn't able, and your second wasn't willing.
Add up what you're losing by carrying two houses every month and consider the possibility of going into the heating season. Then treat yourselves to a luxury -- to end the wear and tear on your emotions, drop your price to a bargain level as quickly as possible. Your agent will contact people who liked the house before, to share the good news, and you should see prompt results.
You may have already read my standard advice -- "If you offered the house for $2, it would sell today. Somewhere between $2 and what you're asking is a price that will do it. It doesn't matter how much you've spent on it, what your husband wants, what the tax assessor finds, how much a certified appraiser might estimate, or what your Realtor suggests. Only the buying public sets value. If your house were worth what you're asking, someone both willing and able would have bought it by now."
Your husband's emotions are understandable. It's the same human feeling that keeps people hanging on to falling stock -- a strong aversion to admitting a loss. But in this case, we're not talking about a loss anyhow, except from a figure that for some reason exists in his mind. Look on a quick bargain sale as a triumph instead, a brilliant move to snatch victory, stop the extra expenses, and leave you free to enjoy your new home.
Q. I've been thinking about this, and I wonder if my accountant was wrong. He told me that we could take only part of our real estate tax and part of our mortgage interest as deductions on our income tax. If I remember right, you wrote that all property taxes were deductible and all mortgage interest.
A. All property taxes and mortgage interest that you owe and you pay can be included as deductions on your tax return. That's true except in a few instances: If your house is a duplex, with the other unit rented, those expenses would be split and part reported elsewhere on your return. If you're paying interest on more than a million dollars in mortgage loans, some limitations apply. If you bought last year, perhaps you can deduct for only part of the year.
Why don't you ask your CPA what his reasons were? And let me know what he says; I'm interested.
Q. We currently have a mortgage and a home-equity loan. Our home should sell for about $5,000 over our mortgage. But what happens to the home equity loan if you cannot pay it off? Can you still sell -- similar to a short sale?
A. Your home equity loan is really a second mortgage. If it isn't paid off, it will remain with the property, and no buyer is likely to take the house with that debt against it. For one thing, it would usually make placing a new mortgage impossible.
• 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.