On real estate: Broker bonus vs. price drop

Q. Our home has been on the market for almost a year. We listed at $20,000 less than what our real estate agent suggested because we live in a small town with limited buyers. Our list price was $215,000. We have put in new windows, refinished floors and freshened up the paint. Three months ago, we dropped the price to $199,000.

We have had only five showings. The feedback has been great: love the house, love the yard and great price. Unfortunately, it is a big house and only couples without children have been looking. They have said the house is too big for them. We did have one couple interested, but they decided no. We even offered them $180,000 — still a no-go.

So, my real estate agent is suggesting putting on a broker bonus. He then informs us he would get the broker bonus if he sold it. I am not happy about that as he is already getting a commission, too.

My question is: Do we put on a $2,000 bonus or lower the price to $185,000? We need to get $180,000 for the house.

A. Yes, clearly you will have to drop your price. Try it at $186,000 and offer a selling agent bonus of $3,000. Get a written agreement that if your own broker finds the buyer, he receives no bonus. There is no logical reason for offering a special incentive to the agent who is already legally required to give you the best possible service.

By the way, it's no use saying “we need to get $180,000.” I'm afraid buyers aren't concerned with what you need to get.

Q. There is a company interested in buying a piece of property from me. They have recently purchased some residential property at unrealistically high prices. Since my property is commercial, should I expect the same consideration?

Example: A $60,000 house goes for $300,000, which is five times the worth. Can I expect five times the worth for my piece, or should I expect more since it's commercial?

A. It all depends on location and other factors. If I were you, I'd consult someone who is licensed by the state as a certified general real estate appraiser.

Q. For $1, my parents sold 60 acres of tillable land with a house on it to my two siblings and me. I am interested in selling my share. I don't want the headaches. I live in another state. My siblings both border the property and use it for their activities.

I offered my share to them. I was told they would give me 34 cents. Now I feel insulted because I helped fix the house that they intend to lease out.

Is there a way to sell my share and let them continue to enjoy the land? I think one-third of the assessed value would be fair, about $45,000.

Also, when the house is rented out, do we claim the rent as income? I am not sure how this is handled. I won't be able to monitor the activities. One sibling has very bad credit and doesn't like to be questioned about financial matters.

I don't want to make waves, but I just need to know if I can do this in a legal, easy manner.

A. Legal, yes, but it won't be easy. Making waves, probably.

You have the right to sell your share, but who would want to be partners with your siblings? You have the legal right to force a physical division of the property, but with a house involved, it might not be practical.

You can also ask a court for a public sale of the whole property and division of the proceeds, a process that can be expensive and unpleasant. Still, sometimes a lawyer's letter saying you intend to do it is enough to get your siblings to buy you out.

On the other hand, the one with poor credit probably doesn't have the money to buy anyhow. He or she could maybe pay you monthly on a mortgage, but I can see that ending up as a real family problem. Take all the documents you have to a lawyer who specializes in real estate. Ask for advice.

As for your second question: Yes, you will owe income tax on your share of any profit from a rental. And calculating that profit can be more complex than you might think. Whoever collects the rent and pays the expenses should hire an accountant to take care of the paperwork.

• 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.

2010, Creators Syndicate Inc.