Question: I put my house up for sale. My broker used a lockbox. Another broker brought by some buyers with an interest in the house. One of the buyers climbed on the roof to inspect it. What would happen if he fell? Can he sue me?

Answer: Anyone can sue anyone else. That said, there would hopefully have to be some merit to the climber's claim and you certainly have arguments in your favor.

The idea of showing a house means that a prospective purchaser has the opportunity to view rooms, peek in closets, check basements and attics, look in cabinets and wander outside. The writ of the visiting buyer does not extend to behavior outside the realm of either reason or common sense. For example, if the buyer had a sudden desire to carefully examine the innards of an electrical service box with his thumb that's not a problem which a reasonable and lucid person could anticipate.

If the buyer has concerns about the roof, they can be addressed with a written purchase offer that requires an inspection by a licensed and insured professional home inspector or roofing specialist.

Question: Over the decades what has happened to homes in terms of their size? Have they grown or shrunk?

Answer: The National Association of Home Builders has good information on this question: A chart looking at construction trends between 1987 and 2002 plus a report that compares home sizes from 1900 through 2000.

NAHB says that a typical home had 700 to 1,200 square feet in 1900, 1,000 square feet in 1950 and 2,265 square feet in 2000.

Question: You hear a lot about predatory lenders. How can you spot one?

Answer: Shop around. When you speak with a number of lenders you will see that rates and points for given products such as FHA or conventional financing tend to cluster at a given level. You may also find lenders offering loan products at far higher rates, with more points and with rates that can change with late payments, substantial prepayment penalties that apply whether the home is refinanced or sold as well as lots of charges and fees.

Sometimes predatory lending is hidden within a transaction -- when someone wants to repair your home and take back a loan it makes sense to check other financing sources.

Local real estate brokers can recommend reputable lenders, as can community housing groups.

If your credit is bad, perhaps it's best not to borrow at all at this time. Instead, work on improving your credit status so you can qualify for financing with a good lender.

Question: What recourse does a buyer have when tenants do not honor a rent-back agreement by moving out when required?

Answer: By "tenants" do you mean former owners who have "rented back" after settlement?

Your ability to dislodge sellers after closing depends on the wording (if any) in the agreement which created their tenancy, local rent control rules (if any) and local enforcement practices (evictions in some jurisdictions can be difficult to obtain).

A good approach to post-settlement occupancy agreements is to have an escalating rental arrangement -- so much rent for the agreed period and then a whole lot more per diem for each additional day. A real estate attorney can write a proper arrangement.

Question: My husband and I are purchasing a home for my son to live in and he is responsible for making the monthly payment. If we don't use this home for any tax gains can we sign a quit claim deed over to him and be free from paying any taxes on the home when he chooses to sell it? Our son cannot get a loan on his own yet but we don't want to co-sign and have no control of what could happen and still be responsible for the payment.

Answer: Miller's first rule for quitclaim deeds is: Don't. Your situation shows why.

You have purchased a home because your son now has insufficient cash or credit to purchase without you.

The result is that you bought and financed the property in your name. If you have a quitclaim deed then title to the property has changed. This is a huge problem because the lender gave the loan to you on the basis of your credit, not your son's credit. As soon as the quitclaim deed is filed the lender can demand immediate repayment of the loan. Why? The mortgage is no longer secured by the credit of the original borrowers -- you.

As well, if you simply pay off the mortgage and sign the property over to your son with a quitclaim deed you're making a large gift -- one which may be taxable.

If you can pay off the loan then you could sell the property to your son at a fair market price and take back financing. You could also make a gift to your son and forgive $11,000 a year in debt. In time the property would be held by your son free and clear and you would avoid gift and estate tax problems. For details, speak with a tax professional.

If you can't pay off the loan, then try this approach: Work with your son each month to assure that all bills are paid in a full and timely manner. His credit status will improve and in time he will qualify to finance the property on his own.

Question: I am going through a hardship divorce and need to get out of a five-year penalty in order to refinance or sell my house since I cannot afford it at the current rate by myself. What do I say to my mortgage company to get them to drop it?

Answer: Please check your loan documents -- pre-payment penalty clauses sometimes apply to refinancing and not a sale situation. Also, many investors (those who actually own loans) will not buy loans with a five-year pre-payment penalty requirement -- and some may elect not to enforce such clauses in older loans.

You and your lender must honor contractual obligations. However, mortgage holders in some cases may decide to forego or modify selected contractual provisions in your favor and with your approval -- look at lender policies when there's a natural disaster, as an example. For additional help please contact a local legal clinic, community housing groups and the consumer affairs division of the state attorney general's office.

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. For comments regarding other Realty Times articles, please contact individual authors by pressing here.

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: September 24, 2004

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