Preapproval request will limit pool of potential buyers

Q. We would like to sell our house For Sale By Owner. However, we predict that we will be bothered by "just curious" lookers. Is there any way we can request that "lookers" present us with a document from a bank that states they are qualified to purchase a house in our price range, e.g., preapproved?

A. You can certainly require that. I don't see anything in fair housing or anti-discrimination laws that forbids you from including in your advertising the words "preapproved buyers only." You can say that in emails, via Twitter, over the phone, or even to people who show up at your front door.

The only problem I see is that you'll be limiting your pool of potential buyers, which makes it less likely you'll receive top price. After all, some qualified buyers may not have applied to mortgage lenders yet. It seems a shame to waste those prospects. And curious neighbors could have relatives who've been wanting to move nearby. That's why real estate agents usually aim for the widest possible exposure.

You'll have to decide for yourselves if the trade-off is worth it - limiting viewers to surefire prospects, in return for making the house somewhat harder to sell.

Q. This is a comment on your answer to a reader who wanted to know the difference between a "mortgagee" and a "mortgagor." I liked your explanation but I think a simpler way to keep them straight is to remember that a mortgagOR must make payments OR else.

A. Thanks for a chuckle.

Q. We will be selling the family home to our son and his wife. They will need to get a mortgage. What are the steps we should take?

A. I once wrote a whole book on Home Buying and another on Home Selling, but "what steps to take" pretty much boils down to:

• You and the kids sign a purchase contract.

• They apply for a mortgage loan.

• When they have a firm commitment from a lender, you have a closing, sign over the property, hand them the keys and receive the money.

That's about it.

They will need a signed sales contract for their mortgage application. Perhaps a real estate broker will agree to help fill one out, for a flat fee or an hourly charge. If not, your lawyer can draw one up. And when you're ready for the closing, you'll all follow whatever are the usual settlement procedures in your area.

Q. We have just signed a two-year lease on a beautiful condo. Our rent is $1,700 and our rate is locked in for two years.

If my wife or I should die, what happens to the lease? Do our payments terminate at the time of death?

A. If one dies, the lease remains in effect with the survivor. If you both die, the landlord is expected to safeguard your possessions and make normal efforts to re-rent the condo. Until there are new tenants, your estate is liable for rent.

Q. What do you think about using a real estate agent as a "Buyers Agent" when purchasing a home? How prevalent is it in the United States?

A. Years ago, brokers almost always owed their loyalty to the seller, who was the principal, the client. Legally, buyers were simply customers. To the principal the agent owed specific "fiduciary" duties. These included observing confidentiality (don't reveal that the sellers are divorcing), passing on facts useful to the seller (the buyers did mention they'll pay more if they have to), obedience to lawful instructions and other duties set by the law of agency.

A customer is entitled only to honest treatment. Sometimes, for instance, an honest answer might be, "I'm not allowed to tell you that; it's confidential."

The old system worked pretty well, but starting in the 1990s some buyers began to hire their own brokers who would owe all those fiduciary duties to them, the buyers, and put their interests first. The relationship is usually established with a written buyer-agency agreement, but state laws on this matter vary.

As a holdover from the old system, both agents are usually paid by the seller, even when one is legally the buyers' agent. Brokers must explain for which party they will be working.

Sorry, but I can't seem to find any statistics on how many buyers use the newer system.

• 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.

© 2014, Creators Syndicate Inc.