Dear George: “My mother is almost 80. She feels she can no longer take care of her house. She wants to give me the house. How does one do that? Is it better to sell the house to me for a minimum amount?” – Dutiful Daughter

Dear Dutiful Daughter: Contact someone who is licensed in your state to provide professional estate planning services. Your mother should be commended for recognizing her inability to take care of her home. However, caring for one’s home is only one part. With advancing years, she will most likely face additional disabilities. Even so, planning for one’s disability is only one aspect of comprehensive estate planning. Another area to consider is how best to distribute property to loved ones. Should a Living Trust be considered? Should real estate be sold to use the proceeds elsewhere? Yet another aspect is the effect of estate taxes. From your viewpoint there are responsibilities to consider. Whether she “gifts” the home to you or you buy it, are you prepared to take over as her “landlord?” Comprehensive, professional estate planning should address all of these questions plus many others.

Dear George: “I am considering a lease-purchase from a potential buyer. What contract should be used with a lease agreement to provide for the sale? I would be owner financing at that time.” – Seller/Landlord

Dear Seller/Landlord: The transaction you describe is most often referred to as a “lease option.” A brief, but excellent, description is provided at the Ask OurBroker® Library, item #35, Lease Options. There are so many variables associated with lease options, that most states do not provide standardized contract forms that can be used even by real estate licensees. If you intend to pursue this, please insist that you and your prospective purchaser each obtain your own legal counsel.

Dear George: “I have been advised by a local builder that it will not reduce the price of a house by 3% to cover my commission as a broker unless they issue a 1099 showing the amount of the reduction. The builder claims federal tax law drives the policy, but cannot refer to an IRS ruling. The reduction is for my son. I do not wish to be involved in the transaction other than to get him the 3% reduction. Do you have any suggestions?” – Helpful Dad

Dear Helpful Dad: If I were a partner, investor, or a bank providing construction financing to a builder, I think I would want to see a 1099 form too. Otherwise, where is the paper trail evidencing the broker commission? But check with your CPA or other tax specialist first.

Dear George: “My husband and I contracted to buy a house last September. There was a contingency for sale of other property by buyer. Our buyers could not obtain financing. Thus, our contract also fell through. The sellers signed a release of earnest money form. However, the listing broker has thus far refused to return our earnest money. He actually stated that he was being ‘slow to return the funds on purpose’ because he was ‘mad.’ Just how long can he legally hold on to those funds?” – Un-landed Gentry

Dear Un-Landed Gentry: Each state has its own license laws dealing with real estate licensees. Use your favorite Internet search engine to search for your state government Web site. From there, look for a state agency dealing with real estate. Most of them provide a number to call for consumer complaints. Based solely upon the information you provided in your email to me, that broker is begging to have his license suspended or revoked. You’d be doing a service to the conscientious, professional brokers who are committed to serving consumers if you assist this guy in obtaining a career adjustment.

Published: March 15, 2002

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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.