Fee paid to real estate brokers varies by region

Q. I would like to know what the commission rate is for sellers?

A. If you want to know what brokers charge, you’ll have to ask them. There is no standard or legal commission rate for a real estate agent’s services. Fees are agreed upon by seller and agent.

In any given community, agents do seem to end up charging more or less the same amount, just as most stores ask about the same price for a quart of milk. Judging from the mail I receive, rates in different regions appear to cluster around 5, 6 or 7 percent of sale price.

Property that’s hard to sell — vacant land, sometimes — may be listed at a higher fee. So might an inexpensive property that wouldn’t otherwise repay the broker’s time and effort. On the other hand, the seller of a really expensive property that’s realistically priced can sometimes negotiate a lower figure. And firms that offer less than full service, with the seller taking on some parts of the job, will charge less.

Q. My boyfriend’s father owns a home that my boyfriend and have been renting for 11 years. He wants us to take over payments on the remainder of the loan and also pay him an additional $300 cash every month. The house will remain in his name until the mortgage has been paid off at which time the home will go in mine and my boyfriend’s name. His father is 76 years old. My boyfriend has one brother and two other sisters. Should we agree to these terms?

A. Not without a great deal of investigation. How many years does the mortgage have to run? How high is the debt compared to the market value of the house? How would the payment compare with your present rent? How do the others feel about the idea? And how’s your income and credit? It’d be a lot simpler if you could qualify for a new mortgage and buy the house outright at this point.

Then again — who would be paying for repairs? Who’s been paying for them all along? What’s the interest rate on the loan? Who would be taking the income tax deduction for interest payments? What about property taxes — who would pay, who would take the deduction?

Are there other liens on the property? What if the father gets a judgment that’s placed against the house? What if he ends up needing nursing care, and the house is still in his name? (Signing it over at the last minute wouldn’t help as far as Medicaid is concerned.)

This proposal looks to me like a recipe for trouble. But if you do want to go through with it, consult a lawyer who specializes in real estate and/or estate planning, preferably one of each. And make sure your own attorney draws up the written agreement.

Q. My mother died two years ago, and we just sold her house. I understand that we figure our cost basis from what it was worth when she died. We sold it for about that much and we had some selling expenses. So if I understand it right, there is no capital gain tax due. But we were told that we will be getting a 1099 form because the sale will be reported to the IRS. I can see some complications. Is there something we can do to straighten this out now?

A. The IRS’s computers will be looking for a report to match the 1099 they receive. So when you file your tax return for 2013, you’ll list the sale on Schedule D. There will also be a place for reporting your cost basis, which is indeed that “stepped-up” value at the time of death. That will make it clear that you had no profit when you sold.

Reader’s comment: I read in your column about a man with back child support on his credit that couldn’t get a home loan. Seeing how he is making payments, he needs to get ahold of the child support office he makes the payments to and they should give him a copy of his payment history. I had the same problem, getting behind. I never actually missed a payment in 20 years. But once the bank saw my printout of the previous five years of weekly payments, they were satisfied and approved my loan.

A. Obtaining the document that is needed may vary in different locations, but I’m glad it worked for you.

Ÿ 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.

© 2013, Creators Syndicate Inc.