Dear George: We submitted an offer on a previously owned home in Texas. The seller is a relocation firm located in another state. The seller informs us that they cannot respond to our offer until a previous purchaser can be located or 30 days have passed. Since the previous contract failed to close, why can't the seller enter into a contract with us? -- Exasperated

Dear Exasperated: Apparently the relo firm ("Seller") has sent the title company (the "escrow agent" in this case) a notice demanding release of the earnest money -- the deposit -- to the seller. According to the Texas contract, the title company must then notify the other party (Buyer). If the buyer does not reply within 30 days from the notice date, the earnest money can be returned to the seller.

Dear George: I want to buy a townhome in the San Francisco Bay Area. It appears to be a good time to buy. My CPA suggests that for the same -- or perhaps slightly more money, I might buy a triplex or fourplex. I could rent out the other units. I would have rental income to help pay the mortgage should my employment status change. This is my first purchase. What do you think? -- Looking To Buy

Dear Looking: Your CPA is correct. With the "right" property there are many benefits. However, what "looks good on paper" can become a nightmare in reality. Hire a real estate broker who is well-qualified representing buyers with your same needs. In addition to being a valuable resource when you buy, the broker should also be able to advise you regarding all the aspects of property management.

Dear George: "We are purchasing a newly-constructed home. Shortly after the house was framed, our builder realized that a plumbing line was not properly laid. A 4' by 3' hole was cut through the center of our foundation to tie into another plumbing line. The hole will need to be 'patched.' We've hired an independent engineer to oversee the foundation patch. If we decide to resell, we know we will have to disclose the foundation repair to potential buyers. We've asked for a reduction in the sales price. To date, the builder is unwilling to agree. How can we justify our reduction proposal to support our concerns?-- Desperate

Dear Desperate: Hiring the engineer was a good move. I recommend you now hire an attorney to review the contract with your builder. If your attorney agrees, my next recommendation is to hire a state certified independent fee appraiser. You are seeking the valuation difference between a new home without a 4' x 3' patched hole in the middle of its slab as compared to the same home with the patch.

Dear George: My wife and I are first time buyers. I'm a Texas Vet. We'd like to use the Texas Veterans Land Board ('VLB') to help us acquire a home on 10 acres. Most real estate agents with whom I've spoken recommend some other means of assistance. Have you heard any complaints from people who have used the VLB?-- Anxious

Dear Anxious: Not that I recall. However, if you haven't already done so, access the VLB site. After a thorough review of the site, I suggest you direct your question to the VLB. Perhaps the real estate agents you've spoken with haven't taken the time to contact the VLB's "Outreach Marketing Division." It offers free, custom-tailored training on VLB programs to brokers.

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George Stephens welcomes your questions by e-mail. Because of the volume of mail received, questions cannot be answered individually. Mr. Stephens is not a lawyer and this column does not contain legal advice. If you wish to obtain legal advice, please consult with an attorney or legal clinic.

Published: July 6, 2001

Use of this article without permission is a violation of federal copyright laws.

George C. Stephens, CRB is the Broker of deRaat Stephens, Inc. dba ERA Stephens Properties and the Director of Compliance for eRealty, Inc. Stephens served as 1998 Chairman of the 13,000+ member Houston Association of REALTORS® and is the Vice Chairman of HAR’s wholly owned subsidiary, e-Har, Inc. He is the 2001 Secretary/Treasurer of the 50,000+ member Texas Association of REALTORS® and TAR’s 2002 Chairman-Elect. Stephens holds a Texas Real Estate Broker license as well as a Texas Mortgage Broker License.