'For sale by owner' may cost you time in a slow market

Q. Unfortunately in February 2008 my father passed away, leaving my sister the executor of his estate. My sister lives in another state and my father's home and the rest of us are here. The house has been vacant since my father passed away. We currently have it for sale by owner. It costs money from the estate for utilities and property taxes, not to mention upkeep. Do you think it would be better to leave the sign on the property, ("for sale by owner"), or have a real estate agent try to sell the home? It's had upgrades outside, but the inside needs cosmetic work.

A. Although you phrase your question in a fair and balanced manner, I'd guess there's some disagreement in the family about what to do. After experimenting with for-sale-by-owner for a full year, you need professional help. Besides utilities and taxes, I hope you're paying insurance premiums, and while I'm no expert on that, I wonder if there's some limit on how long you can keep a vacant house insured.

Among your other costs is a year's loss of money the heirs could have had by now. Investors consider that an expense known as "opportunity cost" - what the money could have earned you. As it happens, of course, savings don't yield much these days anyhow, and it's probably just as well you didn't have the money to invest in the stock market last year.

Start interviewing brokers and get an agent on the job. It takes skill, know-how, time, effort and advertising to market a house. Just putting up a sign won't do it. Years ago my sister and I inherited our mother's house, located only an hour's drive away. Both our husbands are Realtors, and I'm supposed to be the world's greatest authority on all this stuff. Just the same, we put the property in the hands of a broker out there. We ended up with a prompt trouble-free sale, well worth the commission we paid.

Q. Are there assumable mortgages? Where? Can you be exonerated if a mortgage is assumed?

A. All VA and FHA mortgages are still assumable, and of course the new homeowner becomes personally liable for the debt. Any homebuyer who proves financial qualification may take over an existing VA loan along with the house. The original borrower is then free of liability.

With an FHA loan, the original owner is off the hook if the buyer can qualify to handle the payments. If the buyer simply shows a good credit score, the original borrower will share liability for the next five years. Those are about the only assumable mortgages out there.

Q. I am thinking of buying investment property in Florida. How do I find out where the best deals are in that state?

A. You sound like a brand-new real estate investor. Better make your first purchase a modest venture. Buy something close to home, within easy driving distance so you can keep an eye on it. That way you'll begin to learn the business without taking on the risks of being an absentee landlord or trying to resell in an unfamiliar market.

Q. Two years ago my husband bought a house with his name on it, along with his son and daughter-in-law's names. Because his son has not lived up to the verbal agreements they made regarding payment, upkeep, etc., my husband now wants out of the deal and wants to unload the house. It was purchased through a private loan from the seller. Can we stop paying and force the seller to take it back? Can we force my stepson to move out? Can we sell the house even if he doesn't want to? Should we sign a quitclaim deed - would that absolve our responsibility?

A. Even if your husband signed over his share of ownership, he'd still be personally responsible for the whole mortgage debt. Assuming the mortgage document was properly recorded, it shows up right now as his liability. If payments weren't made, his credit record would take a really bad hit.

As a co-owner, your husband has the right to force a sale. He can consult a lawyer about the possibility.

Q. What is an effective strategy when making an offer on a bank-foreclosed home?

A. Judging from my mail, what you need most of all is patience. You might look for an agent with experience in these purchases to act as your buyer's broker and guide you.

• 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.