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posted: 10/5/2013 12:30 AM

On homes and real estate: Full-price offer accepted, then voided

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Q. Recently we put a purchase offer in on a house that was listed for $289,000. We offered the full price. The seller signed the purchase offer the same day. Three days later my lawyer called me and told me that the seller's lawyer voided our purchase offer. No reason given. I just saw the closing of that house in the paper and saw that it sold with a price of $300,000. Eleven thousand over what I offered as the full price at the time of the listing. How often does this happen and is this sort of dealing legal?

A. I suspect that somewhere in the contract -- your accepted purchase offer -- you'd find a provision that the agreement was subject to approval by the seller's attorney with three days. If that lawyer did not sign off on the contract, it never became binding. That's what happened, and while it is unpleasant, it was probably legal. It's just your bad luck that a higher offer came in at the last minute.

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There's no law that says a full-price offer must be accepted, though I understand that's been argued in the courts on rare occasions. So has the matter of whether attorney approval is limited to legal provisions of the contract.

Q. In response to the question about getting rid of the home their dad signed over to them, isn't there is a deed in lieu of foreclosure procedure that banks will accept a home, thus avoiding bankruptcy costs and damaging one's credit?

A. In the question you're referring to, someone asked if they could simply sign their dad's house back to the lender. The problem is that the bank must agree to take it. I suppose it's always worth inquiring about, and that should be done in writing. Yes, it would avoid the legal fuss of a foreclosure. But the lender may not be willing, especially if any other liens would come along with the property: second mortgage, home equity loan, whatever.

The process is also known as a friendly foreclosure. I have no information on how often it is used successfully. Perhaps someone will let us know how it worked out for them.

Q. When my mother got sick, she signed a quitclaim deed giving her house to my two brothers and me. She remained in the house until she died, and now we have sold it.

When we report the sale on our income tax returns, how do we figure the profit? My father bought the house in 1959. Do we use what he paid for it then? Or is it what the house was worth when she gave it to us?

A. Your cost basis is neither of those.

When you received the house as a gift, you also received your mother's cost basis for the property. That figure takes into account not only the original purchase price, but also money spent on permanent improvements over the years -- landscaping, furnace, storm windows and the like. The IRS has told me that if people don't have receipts they are entitled to "estimate as best they can." In addition, your mother may have received a different cost basis if she inherited your father's share when he father died.

Q. Why, in new homes, is the garage so prominently placed front and forward of the house? It is actually the least attractive part of a home and to have those huge garage doors take precedence over the rest of the house seems unfortunate. There must be a reason for it since it is done so frequently, but I'm at a loss as to what it might be.

A. I agree completely. Garages in front of the house are particularly ugly when they're further emphasized with checkerboard painting and other decoration.

Back in the early 1900s, garages were built as far away as possible in the back yard. I suspect people were still thinking in terms of not living too close to the horses. But homeowners are no longer willing to walk -- in the rain -- to garages as they did in your grandparents' days.

I'm sure architects have struggled with the problem. Expensive homes, which can afford extra driveway paving and lots of space, often solve the problem with side or rear garages. Many lots, though, haven't enough room for that solution.

Dropping a garage to basement level minimizes it, but then you have a steep slope down from the street and must carry your groceries up stairs. In addition, some people won't live in a house that has rooms above a garage, fearing fumes.

• 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.

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