Question: Is it possible to exchange stock options for real estate with a 1031 exchange?

Answer: No. A 1031 exchange requires two "like kind" properties. You could trade a house for a house, or a house for a duplex, or a condo for a farm, etc.

"Section 1031," says the IRS, "does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets."

For specifics, see IRS Form 8824 and speak with a CPA.

Question: I just found out that my ex-husband bought a house in 1997 while we were married. We divorced in 2004. Many people tell me I have rights to this property because he denied owning any other real estate at the time of our divorce.

Answer: Spouses have the right to purchase properties independently. As to who owns what in the event of a divorce, that's something determined under state rules.

You need to see an attorney immediately to establish such rights as you may have. If ownership of the property was denied under oath you may have leverage to force a revised settlement.

Question: I have lived in a two-bedroom apartment for 28 years that I really like. It's a spacious unit, in a nice area, and the upper floors have magnificent views.

The place has had problems with steam pipes that run under my unit (I'm on the ground floor) in the past. That has been resolved, but could have the potential to occur again, since pipes don't last forever. I called my insurance company and they said the co-op would be responsible for the floors and the pipes in the event a problem did reoccur. The last time this happened, I retained an attorney, because as a renter I felt I was getting the run-around from the complex. It took them two years to fix the problem after I reported it, and due to this I had damage to some of my personal property. I was satisfied with the settlement. The lawyer was retained mainly to get respect.

Now the co-op is offering me my place for sale at a reduced price. It came down from $130,000 to $90,000. Maintenance is $485 and the mortgage calculated at $90,000 with 20 percent down will be $512. Plus I have to pay $50 each for two parking spaces, a total of $100. Currently my rent is $621, which includes one parking space and one I pay an additional fee of $50.00 for the extra space. My neighbor recently sold his unit, same shares (441) and same square footage (900 sq. ft.) for $65,000 because he had similar problems with his unit and the place was in disrepair. I believe my unit is in better condition. He gave me his HUD sales receipt to use as a bartering tool to get the asking price reduced. I want my total monthly expenses to be closer to $700. Right now at their asking price, and the parking expense it comes to $997, almost $300 more than I'm paying. Am I getting a good deal based on the history? How do I negotiate the price down without insulting the sponsor?

Answer: Why worry about "insulting" the sponsor? This is a business deal. Make an offer. It will either be accepted, declined or countered (which really means your offer was declined and the sponsor is offering something different).

The two monthly costs you cite are not the same. You get no tax write-off for mortgage interest as a renter. You also have no possibility of appreciation. As an owner, you can benefit from appreciation, if any, and reduce your taxes.

If someone has sold a like unit for $65,000 why would you pay $90,000? Before going further speak with local real estate brokers to get an independent opinion of value and market conditions.

Question: I am a non-resident alien from Canada. I have just graduated from a US law school and will be working in the US on a TN visa (NAFTA treaty visa between Canada, US and Mexico).

I was wondering if I can purchase property and obtain a mortgage in the US? If so, am I going to be subject to higher interest rates or other unfavorable conditions for being a non-resident?

Answer: If you qualify for financing you will pay the same rate as anyone else with similar credit.

The question is: Do you qualify? Under the federal FHA loan program, as one example, the guidelines say that "citizenship of the United States is not required for eligibility. When a mortgage loan applicant indicates on the loan application that he or she holds something other than U.S. citizenship, the lender must determine residency status from the documentation provided by the borrower.

"Lawful Permanent Resident Aliens: For those borrowers with lawful permanent resident alien status, FHA will insure the mortgage under the same terms and conditions as U.S. citizens. The lender must document the mortgage file with evidence of permanent residency and indicate on the Uniform Residential Loan Application (URLA) that the borrower is a lawful permanent resident alien. Evidence of lawful permanent residency is issued by the Bureau of Citizenship and Immigration Services (BCIS) (formerly the Immigration and Naturalization Service) within the Department of Homeland Security.

"Non-Permanent Resident Aliens: FHA will also insure a mortgage made to a non-permanent resident alien provided that the property will be the borrower's principal residence, the borrower has a valid SSN, and the borrower is eligible to work in the U.S. as evidenced by an Employment Authorization Document (EAD) issued by BCIS. If the authorization for temporary residency status will expire within one year and a prior history of residency status renewals exists, the lender may assume continuation will be granted. If there are no prior renewals, the lender must determine the likelihood of renewal, based on information from the BCIS."

For details and specifics, speak with several lenders.

Also, please note that you may be required to deposit money for taxes when you sell under the Foreign Investment in Real Property Tax Act (FIRPTA). Your settlement agent can explain how this works and if it potentially applies to you.

Question: I bought a townhouse with attached garage about five months ago. When I asked about the "no guarantee" verbiage on the termite inspection certificate I was told that the exterior was covered by the homeowners association. Today I have an estimate for $400 for a single treatment of the surrounding patio. The management company and CCRs seem to concur that our small $125 dues does not cover any exterior maintenance. What can I do to the seller, or just pay for and what about my regular homeowner's policy.

Answer: The issue is not whether the HOA is or is not responsible for exterior termite treatments, the issue is whether the termite company inspected the exterior of your unit and found an active infestation of termites or other wood boring insects at the time of the inspection -- and whether the pest control firm made any guarantees that would cover future treatments.

Please re-read your termite report for specifics.

Question: My listing agreement has ended with my agent. I am now a self-seller, and will possibly get a new agent. When I purchase a my new piece of property, how long is the first agent entitled to a buyer's commission on a property that they showed you during the listing contract?

Answer: There are two separate matters here.

First, you have a property to sell. You had a broker. The broker was retained with a listing agreement. That agreement may have a "protection period" so that the broker will be entitled to a fee if buyers who saw your property during the term of the listing agreement purchase sometime later. Protection periods end automatically when homes are re-listed with another broker.

Second, you are looking for a home. Did you engage a broker with a buyer brokerage agreement? If yes, you will need to review that agreement to see what it says and your obligations. If there was no buyer brokerage agreement then you are not obligated to pay a buyer brokerage fee.

For specifics, have a legal clinic or attorney look at your agreements.

Question: The HOA of my 24 unit condo building doesn't allow owners to rent out their condo units. The condo has experienced much hardship and faulty workmanship which has resulted in a significant lawsuit with the builder and which required us to pay a special assessment of $1.2 million split among 24 owners ($50k assessed to my unit alone).

I'm having a second baby and need more space, so I need to move out to find a larger space. I'm having great difficultly selling my home (it's been on the market for nine months and the baby is due in three months!). Still, the HOA won't let us rent our unit. We are under great financial hardship because of the assessment and not being able to sell. Can my HOA to continue to not allow renters -- especially with a pending lawsuit and the huge financial burden faced by its owners?

Answer: The HOA has a no renting rule. Unless that rule is changed by the unit owners, it stands. Perhaps the other unit owners would like to reconsider this issue, but beware: If too many units are rented then it may become more difficult to get residential financing when units are sold or refinanced, thereby driving down values.

For specifics, speak with a local real estate attorney.

Question: My husband and I are building a new home beginning this August 2007. We are not working with a broker. The builder lives on the track of 20 homes. We trust he will do a great job. My question is: Do we have to have a property disclosure form even though the home will be new construction?

Answer: State rules vary enormously, but whatever they say such forms are not a substitute for a professional home inspection. In the case of a new home you likely need one when the foundation is first poured, when the walls are up but not closed and at the walk-through just before closing. For specifics, speak with local home inspectors.

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