advertisement

It may be best to cut the price and move on

Q. I am trying to downsize from my large upscale house to a much smaller house. My small house is complete, but my large house is not selling. My Realtor dropped the price three times in six months, to far less than I paid for the place, but to no avail. I am now contemplating putting out an advertisement that says, "Best offer by two months hence." What do you think about this selling tactic?

A. Not much. What if only one person took you up on it and gave you a written offer for $100? For all I know, you could end up with a lawsuit.

The word "Realtor" refers to someone licensed as a real estate broker by the state, who then chooses to join a private organization, the National Association of Realtors. Assuming your agent is indeed a Realtor, your property may well have been included for six months in a local multiple listing system. Any agent in that group would have been happy to produce a buyer.

Unfortunately, prospects don't care much about what you paid for the house. What if you received the house as a gift? Must you then give it away? For six months buyers have been comparing your property with others on the market, and they've been buying the others.

If, by any chance, yours is the best house in the neighborhood, you're caught in a classic dilemma. Buyers who can pay what the place is really worth would rather live on a more expensive street. That's just the way it is. Meanwhile, you're carrying the expenses on both homes.

You hired your agent for his or her experience, and it's time to take advantage of it. Ask what price will move the property promptly. Bite the bullet. Set a bargain price. And wind the thing up. Otherwise, you'll just go on being frustrated - and losing money.

Q. My father-in-law passed away over a year ago. His house is in my husband's name and has been since the time it was purchased. We do not have any receipts for improvements made over the years, except for the most recent improvements, such as new carpet, paint and supplies.

We are in the process of putting it up for sale. My husband and his sister will split the sale, minus anything that is owed to us that we have paid out of our pocket since he passed.

We know we will owe capital gains tax. Do we take that amount off the top before we split it with his sister, or can we each pay our own share in taxes? I think my husband and I are responsible for the capital gains tax since the house is in his name, but I want to be sure of how this works.

A. Yes, your husband will owe capital gains tax, and it seems fair to subtract that before splitting the remainder with his sister.

To the original cost of the property you can add money spent over the years for permanent improvements. In the past, the IRS has told me that if the sellers do not have receipts, "they're entitled to estimate as best they can" when figuring cost basis. By the way - painting does not qualify as a permanent improvement, nor do repairs or carpets.

Q. I'll bet the people who wrote you about renting out their vacation home have never been landlords. They were upset about the fees charged by professional property managers.

We own properties in a city about 35 miles from home. We hire a property manager. We don't get any calls at all hours about plugged toilets and things like that. We're free to leave town any time.

For us it is worth the fees. To get a tenant usually costs the first month's rent plus 10 percent of the monthly rent collected. The rent - minus the fees and expenses - is deposited into our checking account monthly. As landlords, we have responsibilities that either we have to do or pay someone else to do for us. There's no way we want to drive 70 miles round trip to take care of things.

That's the bottom line.

A. Thanks for sharing your experience. Absentee landlording is always a challenge.

• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.

© 2017, Creators Syndicate

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.