Question: I am a first time home buyer, have looked for a year, and just found the perfect house and location. Unfortunately, this house has a "sale pending" sign. What does this mean? Could I still get in there and beat the offer? I am already pre-qualified buyer and have saved much cash for this day.

Answer: We often think of a home as "sold" when there is an agreement between the buyer and seller. However, a sale agreement may have certain requirements that must be met -- say the need for a "satisfactory" home inspection or the ability of the buyers to get financing at a given interest rate. In effect, there is an agreement to purchase the property but title has not actually changed hands because the transaction has not been finalized.

A "sale pending" or "under contract" sign tells the world that an agreement to purchase the property has been made but the transaction has not yet closed. Thus, for example, you could make a "back-up" or contingent offer, something which generally says "I'll buy the property at this price and with these terms if the current offer fails."

Question: We purchased a newly built home in 2002. According to the county assessor's office the assessed value is $128,800. The developer/real estate agent sold the home for $133,500. Why is there such a huge difference between the selling price and the assessed value? Does this mean we owe more on the home that it is worth?

Answer: Let's take 'em one at a time:

First, it's not unusual for the assessed value and market value of a property to differ. The reason is that in some jurisdiction's assessments are only updated every two or three years, assessments may not reflect full market value, and assessed values may be reduced because current owners are veterans, over age 65, etc.

Second, your mortgage is based on the sale price, not the assessment. If local home prices fall, you could owe more than the house is worth. But in practice you are not selling now, homes should be held for several years, residential real estate has a good national history of price appreciation (though prices have declined in some local areas), and your mortgage is being paid down each month through amortization.

Third, you bought a new house which may have included upgrades and extras that added to the final price but are "personal" items and not real estate, say better carpets or upgraded appliances.

Fourth, you can be sure the lender would not provide a mortgage if the property did not have sufficient value at closing to fully secure the debt.

Question: I recently sublet my apartment. The person who took over the lease has yet to pay the full amount of the last month's rent. I have a copy of the contract too. He is also dodging me in every possible way. What should I do?

Answer: Your question raises some issues:

• Are you allowed to sub-lease?

• Is the owner's approval required to sub-lease? If yes, do you have such approval?

• Do you live in a community with rent control?

• Did you get a deposit with the sub-lease?

• Did you check the credit and rental history of your tenant?

In other words, what you can do or not do depends on the content of your lease and sub-lease, where the property is located, whether or not you have a deposit, etc.

Your first step is to see what's permitted locally given your paperwork and community regulations.

Question: I own a fourplex and one of the tenants wants new carpet and it is worn down. How do I replace it with them still living there?

Answer: How "worn" is worn? If you upgrade one unit what about the other three?

Carpet firms routinely carpet and re-carpet occupied homes, homes with furnishings in place. However, it might be cheaper to carpet units as they become vacant.

Before re-carpeting an entire apartment, see if a professional cleaning would solve the problem or, if only a small area is worn, if that area can be replaced or otherwise covered.

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Have a real estate question? Send your inquiry to . Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.

Published: July 25, 2003

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