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Lewes, Delaware
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February 8, 2008     Cape Gazette
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February 8, 2008

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50 - CAPE GAZETTE - Friday, February 8 - Monday, February 11, 2008 What are the first steps for buying a house? Dear Edith: We are planning to move this year. We bought our house 40 years ago. Things seemed much simpler then: We didn't have a house to sell, and you went to your bank for your mortgage. Now, things seem more complicated. We just don't know what to do first. -Who do we see to get help going through this process? We would appreciate any help you can give to get us started on the right path. - R. and K.B. Dear R. and K.B.: Call in neighborhood brokers - at least three - and ask them to come over and give you advice. It won't obligate you to do any- thing. You can look them over and choose the one who inspires the most confidence, an agent with whom you feel comfortable. Meanwhile, you'll learn a lot just listening to what the others have to say. That's a good way to get started. -Changing to residence Dear Edith: I own a rental property that I am thinking about selling.  Can you tell me the best method to pay the lowest capital gains tax? I seem to remember that I can change it back to my principal res- idence by living in it for 18 months; I'm not sure if that is still valid. - J.C. Dear J.C.: To convert the rental to your principal residence and use the home sellers' tax exclu- sion, you must live in the house for at least two years before sell- ing - five years if you acquired it through a Section 1031 exchange. You'd still owe recapture tax, though, on any depreciation you claimed or could have claimed, since the current home sellers' law went into effect May 7, 1997. HOUSE CALLS Anything bad happening Dear Edith: If a purchase and sales agreement has been signed and the buyer decides not to buy for financial or personal reasons - because the co-borrower does not like the property, for example - can you back out and if so, is there anything bad that can happen? - via email Answer: Yes, there is. Consult a lawyer to see if there's any legit- imate way to cancel the contract. If not, your attorney can explain just what the something bad might be. Financing other debts Dear Edith: I am a first-time homebuyer, and I have a new car note. Can I include the car note in the mortgage or any other debts I may have? - J.S. Dear J.S.: A mortgage is a signed pledge that your real estate can be taken to pay off the loan if you fall behind. It doesn't involve your other debts or assets. Lenders won't risk lending more than the real estate justifies. " And anyhow, it doesn't make sense to take on a 30-year debt for a car that would be in the junk heap long before you finished Long & Foster names top sales associates The Rehoboth Beach office of Long & Foster has named Linda Bodine as its top producer in volume and Bodine and Dennis Garaghaty as the top producer in units. Susannah Griffin was the top seller. PRE-SEASgH SAVIHGS UP TO s2500 OH THE MOST EHERGY EFFICIENT SUHRUOMS OH THE MARKET! *500 OFF Call or Log-On Today To Schedule Your Free In- Home Design Consultation With this ad, get a free factory upgrade to PPG . HIGH-TECH LOW-E PERFORMANCE GLASS 0 valuedJ2,000! V'I'70 High Performance glass provides homes with haneed glare and UV Fotecn and reduces direct sdar heat ga, VISff OUR SHOWROOM:, 224 Eighth Ave., NW ,, Glen Bun, MD. MonAd 9am - 8pro. Sat& Sun 11am - 3pro leaC !1ff paying for it. Other mortgage foreclosed Dear Edith: We, unfortunately, are having our rental property foreclosed on. What can the mort- gage company do against us per- sonally? Checking accounts, salaries, the home we live in? We had to make the choice of paying on the house we reside in and not the vacant rental. The rental house went up for auction yesterday. Would bankruptcy be an option to protect the house we live in, or would the house not come into play? - Warm regards, M. Dear M.: Sorry not to have a warm answer. If the foreclosure auction didn't bring enough to cover the debt, the lender can seek a deficiency judgment that could be placed against your other prop- erty. Sometimes they do, some- times they don't. Bankruptcy does not free you of a mortgage; it just postpones the possibility of foreclosure for some time. Editor's note: Edith Lank will personally respond to any ques- tions sent to her at 240 Hemingway Drive, Rochester, NY 14620. Include a stamped return envelope. Readers may also email her at or visit her website: Newyear. Afe00o cottage. Afeoo savings. Canng Connected CONTINUING CARE RETIREMENT COMMUNITY I708 Cadbu Circle Lewes, DE 19958 Call today! 3o2-65-6a30 or I-8OO-39o-8298, 1 m )I