Allowing buyer to move in before closing is not advised

Q. After four months of our buyer trying to get financing, the last hurdle for him is to wait another two months for clearance on his work visa. We don't want to lose this fish on our hook. He wants to rent until the lender will close. What terms should we impose to make sure the deal goes through?

A. Letting the buyer move in before closing is seldom recommended. I don't have space to list all the things that can go wrong. If you do it, be sure a lawyer who specializes in real estate draws up the rental agreement.

But if the visa doesn't come through, or the lender ends up refusing the loan, I don't see how you could force the deal to go through.

Q. I have a house that I am not using currently. It needs some work and I cannot decide should I fix it up to rent or sell it as a fix-her-upper?

A. First you need to know just how bad "she" is, and what it might take to fix "her" up. Call a couple of local real estate brokers and ask them to come out and give you some free advice. It's possible "she" could just be put on the market as is.

Unless you're really ready to take on the demanding job of being a landlord, perhaps you should just forget about renting "her" out.

Q. I will be transferring to another city (working for the same state agency at the same job) within the next few months. I am a first-time homebuyer and have already found a home that I like.

Is there any way to be able to purchase the home now, even though I won't be living in the area yet? I want to take advantage of first-time homebuyer tax credits.

A. Certainly, people buy houses before they've moved into town all the time. A mortgage lender just wants to see a firm written contract for the new job. But it can be difficult to keep insurance on a vacant house, and my guess is that the costs of maintaining it for a few months (mortgage payments, property taxes, minimal utilities) could eat up much of your tax credit anyhow.

On the other hand, of course, you'll need to close on your new home before Dec. 1 to qualify for the credit at all.

Q. After reading your column regarding first-time buyer tax credit, I am wondering if my husband and I are eligible.

The last time we owned a home was in 2002. We purchased a small condo in February of this year for the amount of $76,000. My husband has a part-time job and we have Social Security. We are in our 70s.

If we are eligible, how do we go about looking into it?

A. Because you hadn't owned a house for three years before you bought, you should be eligible for a first-time homebuyers tax credit, 10 percent of your purchase price. I'd guess that you fall within the income limits. (The credit starts to phase out at $150,000 for a married couple and disappears at $170,000.)

There are two ways to claim the credit:

You can wait until you file your 2009 return next April 15 and take $7,600 off the federal income tax you owe then. If you don't owe that much they'll even send you a check for the difference.

Or you can file an amended return for your 2008 income and claim the credit against what you paid last April, requesting a refund right now.

For help with the paperwork, consult a tax professional.

Q. My tax assessment was recently changed to a value of $184,000. I currently have my home listed for $204,000 and would sell for $200,000 but I can't get an answer about the assessor's report. Does this mean someone would not get financing at the $200,000 value because of this report? This is so frustrating.

A. The assessment is used for taxation purposes only. A buyer shouldn't rely on it for a current estimate of market value, and a lending institution will send out its own appraiser anyhow.

Indeed, a lower property tax may be a selling point. I wouldn't worry about it. But if you'd go to $200,000, and if you're anxious for a quick sale, then list at $199,900. Otherwise, you're eliminating a whole slew of potential buyers who tell their agents "Don't show me anything over $200,000."

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

2009, Creators Syndicate Inc.