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posted: 3/7/2014 12:01 AM

Selling 'as is' often a poor choice for homeowners

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Making major repairs to a home before selling can be costly and time-consuming, but it's usually cheaper -- and safer -- than marketing the property in "as is" condition.

Q. I am planning to sell my home. The foundation is cracking, and the lowest estimate I received to repair the problem is $18,000. Instead of paying to fix the problem, would it be better for me to simply sell the home "as is" and let the buyer worry about it?

A. Probably not. From both a financial and a legal standpoint, your best move would be to spend the time and money it would take to have the foundation repaired before you put the home up for sale.

When a home is sold "as is," it means the seller makes no promises or guarantees about its condition. Although most homes sold through foreclosure and probate are sold on an "as is" basis, it's not the best way for an individual seller to market a property because it automatically scares off most prospective buyers. The few buyers who will even bother to check the home out will rightfully expect a deep discount -- a discount that would likely be much larger than the cost of making the needed repairs.

It's also important to realize that offering a home "as is" doesn't necessarily prevent the seller from being sued if the buyer moves in and then discovers the defects. All sellers and their agents are required to disclose any problems they know about before a sale is closed, even if the property is marketed in "as is" condition. If you sold the home without disclosing the faulty foundation or any other problems, the seller could still sue when the defects are discovered later.

Q. We have owned our home for several years. We did not receive our usual monthly mortgage statement last month, so we forgot to pay it. Now our lender wants to stick us with a $95 late fee. Are we obligated to pay the fee, even though we did not receive our payment notice?

A. Yes, the lender can legally charge a late fee even though you didn't receive your usual monthly notice.

Virtually all loan contracts allow the lender to assess a penalty if a payment deadline isn't met. But those same contracts rarely obligate the lender to send out monthly statements or "payment due" notices, even though many provide such reminders as a courtesy to their borrowers.

Call your lender's customer-service department and ask for a waiver of the late fee. Many lenders will provide a one-time waiver if the borrower has an otherwise good payment record, but don't expect any favors if you have been tardy two or three times before.

Q. My father had a stroke last year and can no longer work. His mortgage is paid off, but he barely has enough money to pay for his utilities and medication, not to mention a property tax bill that exceeds $4,500 annually. Does his disability entitle him to any type of special property tax relief?

A. I cannot answer your question directly, because you did not tell me where your father lives. However, people with disabilities are allowed special tax relief in nearly every state. Most states require the disability to be permanent, but a few also offer relief to those who are eventually expected to recover.

The best way to find out if your father is eligible for such a program is to call the tax assessor in the county where he lives. The phone number should be on his tax bill, or you can find it by looking under the "Government Agencies" heading in the white pages of his phone book.

Real estate trivia: "Commercial" real estate is generally defined as property that is used for business purposes rather than housing, which is considered "residential" real estate. Office buildings, shopping centers, a corner store or a huge manufacturing facility are good examples of commercial properties.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2014, Cowles Syndicate Inc.

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