Neighbor's sale price will likely impact you

Q. I bought my condo 15 years ago, and installed oak hardwood floors, granite around the fireplace, nicer cabinets, etc. The upgrades were because I live here and not so much for the investment. The floors alone cost $20,000.

Now I feel our units are very underpriced. Someone sold way under market value a year ago and prices have fallen since. My question is: How can I get more for my unit than my neighbors? The unit next door is horrible with mismatched flooring, old appliances. It's not selling and the price is falling and taking my value with it. Any ideas on how to list and get the real market value?

A. You say "someone sold way under market value" but - what property sells for is its market value. The definition of market value boils down to "what someone will pay." I'm afraid that's not what has been spent on the property, and not what the place might have brought some other time.

No matter how great your unit, you can't get much more for it than nearby condos are selling for. Buyers are just like that. They will pay only so much to live in a certain area. It's best to make improvements for your own satisfaction. After all, that's what you say you did.

Whether it was an up or a down market, you'd still be limited by average prices for nearby property. In appraiser's terms, you've over-improved your place. It should be easy to sell, but only if you accept the reality of your local market.

Q. Do my wife and I both have to be on the loan together or can the loan just be in my name? Her credit is a lot worse than mine and I am the only source of income.

A. You can place a mortgage on your own even if your wife is a co-owner. That's true with most mortgages, but there is one exception - if you're looking for an FHA mortgage. For that one, all owners must sign for the loan. You're right in thinking that your wife's credit rating might make it difficult to qualify. If you did want to place an FHA loan, you could simply buy the house in just your own name, with no problem in qualifying for a mortgage.

Q. Are there any people or professions who will help in a real estate deal besides an attorney or real estate agent?

A. Appraisers, mortgage brokers, loan officers, home inspectors and engineers often help during the sale of real estate. But if you're asking who can legally assist in buying and selling real estate for another and for a fee, the law allows only lawyers and licensed brokers and salespersons.

Q. My mom had a mortgage on a house that she and I have the title for. She passed away, and I have bad credit so I can't get it refinanced. Payments are not behind. What is my next step?

A. First, check with a lawyer to make sure you are now the sole owner. Next, make the current mortgage payments every month, on time. Notify your mother's insurance company and the tax assessor's office of the change in ownership.

You shouldn't need to refinance. Lenders do not usually call in the debt when property is inherited by a family member.

Q. For the past five years I ran an adult home-care business in my house. I claimed 60 percent use of my home for business including depreciation. Last year I sold my house at a profit, but not more than the $250,000 allowed for a sale of home tax-free. I am a single parent with dependent children. Do I have to pay taxes on the depreciation I took over the last five years?

A. The IRS will treat your sale as two separate transactions.

On the sale of your own home (40 percent of the profit) it sounds as if you qualify for the home-sellers exclusion from capital gains tax.

The other 60 percent of your gain represents the sale of business property. On that you'll owe long-term capital gains tax, no more than 15 percent federal, except that whatever portion of the gain is attributable to recaptured depreciation is taxed at 25 percent.

Of course you'll check this out with a tax professional.

• 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.