Unmarried buyers should discuss common pitfalls

Q. My boyfriend and I would like to buy a house together but we don’t expect to get married until next year. Will we have any problem getting a mortgage? We’ve been renting an apartment together for two years now.

A. No problem. Unmarried partners may qualify for a mortgage loan just as a married couple would.

You’re not going to like the rest of my advice. But whenever unrelated persons buy real estate together, they should have a session with a lawyer to set down in writing just what percentage of the house each will own and what should happen if a lot of unpleasant “what ifs” arise in the future. That might involve, for example, one of you becoming unemployed, needing to move out of town, wanting out of the relationship, not agreeing that you need a new roof, getting into trouble with the IRS. I’ll bet the lawyer can suggest even more potential problems.

Q. We are in our late 70s and the house is too much for us now. It needs lots of repairs. We don’t have the money to fix things and we don’t want a lot of fuss. And houses in this neighborhood don’t sell for a lot so we probably wouldn’t get our money out.

We were wondering, if we tried to sell it by ourselves without using an agent, would that make a difference as far as repairs?

A. It’s understandable that you don’t want the hassle of supervising extensive repairs, especially while you’re living in the house. And there is indeed the danger of over-improving the property, because people will pay only so much to live on any given street. Selling without a broker won’t solve your problem, though — quite the opposite. You may need expert help in marketing your home.

Repairs are required, not by a real estate broker, but rather by some buyers. You need help in finding someone who’s ready to purchase your home in its present condition. That’s not impossible; there are always people looking for a place they can fix up.

Where the problem arises is with the buyer’s mortgage lender. Banks want property to be in good shape before they’ll lend on it, and that’s when repairs might be required. So you need to look for a buyer who’s prepared to pay all cash, and in return you may have to settle for a bargain price.

Another option is to hold a mortgage yourselves — lend the buyer the money and wait to collect the sale price gradually over a period of years. You may not want to do that, and sometimes it’s asking for trouble. But if you did, you could protect yourselves by insisting on a good down payment, and a buyer with an excellent credit rating.

It sounds as if you could use an agent’s guidance. Call several companies, interview brokers and see what they recommend. Then put your home on the market with whichever one inspires the most confidence.

Q. When you start looking at houses for sale, how do you know what price range to consider? I read somewhere it should be two times your annual income. Is this a good guideline?

A. Not necessarily. Your current debts must also be taken into account. Each mortgage plan has its own guidelines for how much of your monthly income may be spent on your total debt service, which includes not only mortgage payments but car loans, student loans, child support and the like.

As you begin answering ads and visiting open houses, don’t be insulted if agents ask questions about your finances. They can run a rough analysis and tell you what you’re probably qualified to buy. Your best bet, though, is to apply for a mortgage early on. Sellers like to see an offer from buyers who already have written approval from a lender.

Q. We are thinking of putting up a privacy fence around our house. Will this make it easier or harder to sell if we move in a few years?

A. The answer depends on the general practice in your neighborhood. I can’t tell from here what’s the custom in your area. At any rate, it’d have to be something attractive and not just chain-link. You’d need to find out what height is allowed and if a setback is required in your town. But don’t expect buyers to pay enough more to make up for your outlay. Many things you can do will delight prospective buyers. As a general rule, though, almost nothing beyond a new coat of paint and a lot of cleaning and tidying is likely to pay back, dollar for dollar, what you might invest.

Ÿ Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

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