Question: I have a contingency contract on my home and I've just received a slightly lower cash offer in a second contract. Have not accepted or rejected it. Can I make counter offers on the 2nd contract?

Answer: To answer this question we need to look at the difference between "contracts" and "offers."

The first item you received is really an "offer." It is not a done deal and won't be unless and until the contingency is removed. Once the contingency is removed, the "offer" can become a "contract" and the property can actually be sold according to agreed terms and conditions.

The way in which the first offer is written may prohibit you from accepting a replacement offer until the contingency with the first offer is resolved. You, your broker, and/or your attorney need to look at the specific language in the document before going further.

As to the second offer, you could accept it subject to the first offer. In effect, a contingent acceptance. That is, you could say to the second bidder in so many words, "hey, I'll accept this offer (or this offer changed to thus and such) if the first offer falls through." For details, speak with your broker or attorney.

What you don't want to do, of course, is to accept both offers. Selling one house to two different buyers is a sure formula for dispute and litigation.

Question: We're planning to build a home in an over-55 retirement community. My brother, who needs wheelchair accessibility, is contributing a substantial amount to the purchase so he can spend time with us each year.

We added a clause to our purchase offer to assure that the property would be accessible to him. It was rejected for architectural conformity reasons and we were asked to sign it again without that restriction. Is there any recourse for us?

Answer: The question of handicapped access arises with some frequency and the answer seems clear: Reasonable accommodations should be permitted for handicapped individuals because that's generally what federal rules require and it's simply the right thing to do.

Someday someone will take the matter to court and somehow require an architectural committee, builder or whoever to spend a day in a wheelchair or on crutches. You can bet that the accommodations will be okayed by 10 AM, if not sooner.

As a nation we are now at war and thousands of individuals have been wounded, some in ways which will alter lives permanently. Other individuals have been impacted by accident or disease. In all cases common sense should apply: Life is tough enough, let's not create needless barriers.

Question: Can you get a residential capitol gains exemption more than once? How long must you wait between sales to get the exemption? Is tax charged on the profit of the sale, or on the sale price?

Answer: In general terms, if you have lived for two of the past five years in a given property you can sell the home and pay no tax on profits of as much as $250,000 for individual owners and $500,000 for married sellers. So, yes, the deduction can be taken more than once.

But, we're talking about taxes here and so all sorts of exemptions, exceptions and curiosities apply. For instance, you might be able to sell in less than two years and still avoid a capital gains tax if you were forced to move more than 50 miles because of a job change, to meet a health need and for other reasons. For details, see Benny Kass's excellent discussion of such issues.

The tax you pay, if any, is based on the difference between the cost to acquire the property (the sale price plus closing expenses) and the net proceeds from the sale (the sale price less marketing and closing expenses). As well, capital improvements can be deducted to reduce the profit. For specifics, see Publication 523, "Selling Your Home," and speak with a tax professional.

Question: I'm about to purchase a new townhome. In today's market, is there any room to negotiation builder prices?

Answer: Whether a property is new or existing, it's value is a reflection of the local marketplace. If there's a line outside the builder's office to buy units, then no, it will be hard to negotiate. But if the market is slow, the builder does not want to carry inventory month after month, so negotiations will be increasingly likely.

While you can certainly argue about pricing, since builders have many units to sell they are generally reluctant to offer price discounts because such lower values may impact future sales. Instead, it may be easier to negotiate terms such as better appliances, additional features, a cash credit at closing, a mortgage interest buy-down, etc. -- things which do not appear to reduce the recorded sale price but in fact represent discounts.

Question: How do you buy a house if you're self-employed, get a 1099 and write off everything that you can so that it looks like you don't really make much per year?

Answer: In other words, instead of a W-2 received by employees you receive income which is reported to the IRS on a form 1099. You then use Schedule C to show such income -- and you also use Schedule C to deduct your businesses expenses.

Millions of people in the U.S. are self-employed and they routinely obtain mortgages. How? By reporting all income and taking all lawful deductions. Lenders then "add back" accounting items such as deductions for depreciation (because it's not an actual cash cost) and business expenses for a home office (because you would still have the mortgage cost, utilities, etc.). The result is that for lending purposes you are likely to have more income than reported to Uncle Sam -- not because there's more income but because certain expenses are counted differently for qualification purposes.

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