Stay off the furniture with potential buyers

Q. In a recent column you advised against discussing selling the furniture or appliances when buyers are looking at your home. But it seems to me that would be a fine time to let them know what you're asking. Can you explain why it's not a good idea?

A. My husband, who was a Realtor, always used to caution his salespeople to remember almost everyone they deal with is nervous - buyers and sellers alike. Neither you nor those looking at your home are particularly relaxed. It's easy to say the wrong thing and scare them off.

If you remain in your home during a showing, it's fine to end up meeting the prospects. You can answer questions about when the school bus comes, how far it is to the library, what the cherry tree looks like in spring - "here's a picture!" On some matters, though, it's best to be cordial but vague. Remember - everyone is nervous.

There's no use discussing money, because - among other reasons - nothing is binding in the sale of real estate anyway, unless it's in writing. If you hear "Would you take less?" the answer is "We'll be happy to consider any written offers." A good answer to "Will you be out by September?" is "I'm sure we can work out the details."

At this point, getting hung up on lesser items can jinx the whole sale. If you're asked about leaving the stove and fridge, a good answer is "that depends." To a question about whether you'd leave the pool table or sell the couch, the response is "We thought we'd discuss all that after the sale of the house is settled."

Q. I recently moved after my divorce, but I still own a rental property back home. It doesn't have a very big mortgage so I'd like to refinance it for a bigger amount with some cash left over. I could probably get a lower interest rate, too.

I don't know how to do this, and I need information also on what the income tax consequences would be.

A. When you borrow mortgage money, there are no tax consequences. It's not income, because you have to pay it back.

You didn't know that, you don't know how to apply for a loan, and it sounds as if you don't have an accountant. All that makes me suspect you haven't been a landlord very long. Perhaps your ex used to manage the property, and you received it in the divorce settlement?

Borrowing on non-owner-occupied property is somewhat more complicated and more expensive than financing one's own residence. Lenders take into consideration your credit score, assets, income and other debts, the property's value and its cash flow. Your best bet may be to contact a mortgage broker (that's "broker," not "banker") for guidance. Mortgage brokers specialize in bringing borrowers and lenders together.

Even experienced real estate investors can get into trouble trying to be out-of-town landlords, though. Unless the property has professional management and shows a decent profit, your best bet may be to put it in the hands of a real estate broker back home and sell it.

Q. When mortgage lenders advertise they always seem to say mortgage interest is deductible on your income tax return "within limits." Can you explain what are the limits and why aren't they spelled out?

A. Those limits don't apply to most borrowers. Here are the Federal rules, if you don't take the standard deduction instead:

• You may take as an itemized deduction all mortgage interest paid on up to $1 million worth of borrowing to buy or improve your home and a second home.

• You can also deduct interest on additional borrowing of up to $100,000 against your own residences (second mortgages, home equity loans), no matter what the money is used for.

Not many of us have to worry about those limits.

Q. We own two adjoining properties that were deeded separately at the time of purchase and are now both paid for. We often contemplate building or other activities that could overlap the boundaries of the two properties and so are wondering if deeding them back to one property is possible and also what the pros/cons would be. Also wondering if having the property as one again might reduce our taxes (just a bit?).

A. You need professional answers to all your questions:

• An appraiser about whether combining the parcels would increase or hurt future value.

• A lawyer about the relatively simple process of combining the parcels into one.

• Your local tax office about whether there'd be any saving in property taxes.

• 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.