Study area sales when making an offer on a house

Q. My husband and I are about to make an offer on a house priced at $232,500. It has been on the market for 83 days, and they are willing to negotiate or pay closing costs. We are first-time homebuyers. I know there is no right answer to this question, but if it were you, what would you offer them?

A. All we can know for sure is that the house isn't worth $232,500, or someone would have bought it by this time. You know more about your local market than I do. I trust you've been house-hunting enough to know how this one compares with nearby properties being offered, so you must have some idea of prices. You can ask your agent or look on sites like Zillow.com for information on recent nearby sales of similar properties the best guide to market value.

Some people think the idea is to start low, the sellers counter with a small price reduction, you come back with something else, and eventually you reach a compromise. But brokers know that too much back-and-forth action usually kills the deal. Emotions start to run high; eventually someone says, “It's not the money, it's the principle of the thing, and there goes the ballgame!

I usually advise making your first offer pretty close to what you'd really pay for the house enough to tempt the sellers to accept it immediately, so they can stop worrying.

Q. I need advice in prepaying the remaining mortgage loan (nine years left on 15-year loan at the interest rate of 5.375). Can you let me know the steps to make it foolproof and perfectly legal?

A. Ask your mortgage company for a payoff statement. It will calculate exactly how much you would owe on a certain day in the future, with instructions for how to make the payment.

After that's done, your mortgage company should issue a document proving that the debt has been cleared. This important document must be entered in your county's public records office. Most lenders will do that, and then it may take a few months it is forwarded to you. It should carry a stamp indicating that it's been recorded. If not, contact your records office to double-check. If it's not on file, you can take it down there and enter it yourself.

You are entitled to a refund of any money left in your escrow account (if you have one) because that's your money. And from now on, you'll be paying your own taxes and insurance bills directly.

Q. Almost two years ago, I signed my home over to a real estate investor giving him the ability to sell my home and share the profit with me. He had tenants on a lease with the option to buy, and their option ends in November.

The investor has recently disappeared, and I have retaken control of the home with the tenants still in it. They desire to buy the home, but they had a foreclosure two years ago and can't get a bank mortgage. They have had no issues making rent payments, but their monthly payment is $150 short of what the current mortgage costs me.

The investor left with $9,000, which they have already put toward the home. I want to treat them fairly, but I have limited financial ability. There is maybe $10,000 worth of equity in the home. What are some options for selling the home to them?

A. You certainly should have consulted a lawyer before signing over your house. At any rate, that's what you need to do now. Your “investor partner has left a legal mess behind him. What sort of contract did your tenants sign regarding that lease-option? Are you the owner or part owner? It's not clear what “retaking control of the house means, but I suspect you'll have considerable legal complications trying to sell to anyone.

In your situation, I'd be contacting the local attorney general's office about the fraud as well as finding my own real estate lawyer to find out where I stand. So should your unfortunate tenants, who have lost money they probably can't afford. They might even have a legal claim (equitable interest) on the property.

I'm afraid you can't do much for them. The house can't be sold without that current mortgage being paid off. In the meantime, you're losing money every month. If it turns out you do own the house and have the right to sell, you should probably put the place on the market, in which case they'll have to move. About all I can offer you and them is sympathy.

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 her at ehlank@aol.com.