Buying public determines house value

>Q.

A. It doesn't matter what statistics say. It doesn't matter what you think your place is worth. It doesn't matter what the most skillful appraiser reports as your market value. It doesn't matter what price your agent recommends. It doesn't really matter what kind of market it is right now either.

In the end, only one thing counts: The value of your house is determined by the buying public. It's had six months to vote that the place isn't worth what you're asking. You'll have to pay attention to what buyers are saying.

No matter what your local market is like, some houses are selling. Take a good look at what else is in competition with your home. Then drop your price below the others so that your property cries out "Bargain! Snap me up fast!"

If you don't do that, you'll end up paying to carry a vacant house as well as your new one. You're under the gun now. No more fooling around.

Q. My husband and I currently own a house together. When we retire we would like to sell it. Then we each would buy a house so we can be close to our children from our first marriages who live in different states. We would occupy each house probably six months each year. Also, we would like each house to go to our own child after death. Can we legally do this and if so would it be a good idea to put the child's name on the deed or have it specified in a will?

A. What you propose is perfectly legal, though there may be extra considerations depending on different state laws. Go together to a lawyer who specializes in estate planning. The attorney can analyze your situations and advise on the best way to accomplish your goals.

Q. I have been a homeowner for the last three years and never missed a mortgage payment. Before I closed, as is usual, I had to put money in an escrow account for my property taxes and insurance. Now I feel like this money is a loan to my mortgage company that I should be saving in my own account. Do you think it is time to stop putting money into the escrow account and take on the responsibility of paying my home insurance and property taxes directly?

A. If your property were destroyed by fire, your lender would lose most of the security for its loan. Same thing if the place were sold at auction for unpaid taxes. So they want to make sure your insurance premiums and tax bills are paid on time. That's why they're collecting extra money from you every month, and paying the bills on your behalf.

Establishing that escrow account wasn't your choice. It was required as a condition of granting your loan. I've heard it's sometimes possible to change the arrangement later, but I'll bet it isn't easy.

In some states and for certain kinds of loans, lenders are required to pay a small rate of interest on the money being held. It never amounts to much. And frankly, given how little interest you could expect these days if you stashed that money in your own savings account, the whole thing isn't really worth fretting about.

Q. My daughter just went through a divorce and she is keeping the house. How does she keep the present mortgage with having to refinance? I think I had read this in your column several months ago and you said it was quite easily done.

A. If both of them were originally responsible for the mortgage loan, then both of them still are, whether they're both owners or not. I don't know whether their divorce papers have anything to say about your daughter's obligations. But as far as the lender is concerned, she doesn't need to take any action. The mortgage company simply wants someone to make the monthly payments on time.

If your daughter can't do that comfortably, then she shouldn't have agreed to keep the house, because she'd be asking for trouble - but that's a different topic!

bull;Edith Lank will personally respond to any questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

2009, Creators Syndicate Inc.