Cash sale can be fraught with problems

Q. I'm going to buy a half-finished cottage on a lake. The place is free and clear with no strings attached. I'm paying all cash so there shouldn't be any complications.

Can I get the abstract and deed from the present owner, go to the courthouse myself and have a transfer of title without the hassle and expense of a lawyer? Of course I would get a receipt for my payment in full.

A. In theory you and the seller could do this yourselves, but you'd better understand the process. The old abstract and deed are important documents, but they're not enough to transfer title or properly protect your interests.

Are you sure the person selling to you is the only owner? Has all the work done so far been paid for? Are property taxes up to date? Is the place really free of mortgages? Could a neighbor have the right to use the driveway, or access to the lake? Might the IRS have a lien for the seller's unpaid income taxes?

All that should be investigated before you hand over your money. It's usually up to the seller to prove clear title. Perhaps you could do it yourself, searching the public records (also known as updating the abstract). But even then, the old deed isn't used for transferring title. You'll need a new one, accompanied by several forms, all in proper condition, before it'll be accepted for filing in the public records.

Closing customs vary widely from one part of the country to another. In my state, lawyers handle closings. In New England, buyer and seller pass papers. In other states, they go to escrow. Escrow companies, banks, title companies, lenders, even real estate agents handle the process in different places.

I would never buy real estate anywhere without the protection of the usual local procedures.

Q. No question here, just responding to your article on Timeshare Experiences: We also owned our timeshare in Virginia Beach 20 years. We no longer used it and we couldn't sell it.

We, like your reader, could not sell it. I called the timeshare resort and our company said the same thing - they did not take them back. So I told them, I wouldn't pay my maintenance fees and they could foreclose. They told me they would call me back.

Well, they did. And they said they didn't want to spend the money to foreclose on it. So if I paid $310 for legal fees to transfer it back, they would take it. We did, it was well worth the $310. It didn't hurt our credit, and we no longer have the fees. Hope this helps.

A. Thanks for letting us know your experience.

Q. My wife, my mom and I lived in a house my mom bought and then decided she did not want to live in. She tried for a while, but because she was afraid to drive, she now lives in a smaller city and we make all payments on this house.

Now she wants to leave this house to us by signing the deed over in her will. We made the original down payment and, like I said before, all payments.

If something were to happen to her, we could not qualify for the loan, but we can make the payments. Would the lender call the loan due when my mom's will is read? Would we have to pay inheritance tax on a house that we basically already own? Is there any way the house can be put into our name now? We would appreciate any and all advice.

A. It's a simple matter for your mother to sign the house over to you at any time. You'd want to discuss that with the lender first, to make sure you could keep the mortgage. If your payments have been on time and you have evidence (canceled checks) that you've been making them yourselves, they might even agree to remove your mother's name from the loan.

If you simply wait to inherit the house, though, you should know that lenders do not call in a mortgage loan when that happens.

As for estate taxes: The Federal government has no inheritance tax on the heirs. It does tax the estate directly, but only if it totals more than $5,340,000. You don't tell me what state you're in, but only six states have inheritance taxes. Most of the others do have their own estate taxes, but your mother would probably have to leave a pretty big estate before it owned any state tax.

• 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.

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