Question: My boyfriend and I are selling his house. We had a couple come and look at it and they were very interested. They started the whole process and were pre-approved for our asking price. A purchase agreement was signed and everything was on a fast pace go ahead. Then the deal was canceled. We called the couple interested in our house and the women stated they broke up. Can they just back out with a purchase agreement signed? I mean we almost put a down payment on an apartment.

Answer: That the buyers broke up is not a contractual issue. The issue instead is whether they can withdraw from the agreement without penalty based on some clause or contingency within the contract.

It's possible that you may be entitled to retain their deposit, depending on how the agreement is worded and the reason for the withdrawal. For details, speak with your broker and then a local real estate attorney.

Question: I hope you can help me. I recently got involved with a company that does residential loans and pays a 10 percent referral bonus for any loans referred by myself or other members of the organization.

None of us are lenders, brokers or any of the other folks that fall under RESPA laws. We are just your average citizens with no ties to real estate with the exception of owning a home.

This company has since changed it's ways. According to the company, it is illegal to give anyone a referral bonus for residential property. However, in my understanding, as long as it doesn't up the settlement cost to the buyer or anyone for that matter, there is no violation.

The company now says it can give a 50 percent referral bonus on commercial loans because commercial loans do not fall under the same laws. This makes no sense to me at all. What I'm hoping is that you can tell me if this is something I should stick with or is it something I should avoid like a house of cards in a hail storm?

Answer: What do you actually know about originating mortgages? Have you taken any classes? Are you merely supplying names in exchange for a fee or other consideration? Who told you what the Real Estate Settlement and Procedures Act (RESPA) says or does not say? As well, when you mention referral fees as a percentage of something, of what are the 10 percent and 50 percent figures a percentage?

Rather than going forward with this, if you have an interest in becoming a mortgage loan officer -- even a part-time one -- why not take the basic classes available in your jurisdiction. Once qualified, you can then work with established lenders in your community. For details contact the state affiliate of the Mortgage Bankers Association.

Question: I just recently sold my condo for $130,000 and came away with a $75,000 profit. My understanding is that I need to invest this money in another property within two years to not get taxed on it.

The reason we sold our condo was to finish paying off the difference of my mother-in-law's mortgage which is about $39,000. My question is: Will I still be taxed for the full $75,000 or $36,000 left after paying off the other mortgage. The house will still remain under my mother-in-law's name.

Answer: Under pre-1997 federal tax rules if you sold a prime residence and bought a property of equal or greater value within two years, the tax on the profit from the sale of the first property could be deferred until the second home was sold.

The current rule is that if you sell your prime residence there is no federal tax on your gain if you have lived in the property for two of the past five years. You can shelter up to $250,000 if single and $500,000 if married. It is not required that you invest some or all of the profit in real estate. For details see a tax professional.

Question: My neighbor tore down an old fence and put up new one. She put it in the same place, then she had the fence surveyed. It shows the fence is 32 inches on my property. She is stubborn and will not acknowledge this. She has planted hedges on my property, What can I do?

Answer: How long was the previous fence in place? If it was there long enough -- say 10 or 20 years depending on the jurisdiction -- there may be an "easement by prescription," meaning your neighbor can use the property without further permission. For details, speak with a local attorney.

Question: I contracted to buy a townhome (3 bed, 2.5 bath, 1-car garage) in Florida in 2005 for $237,000. Now the home is ready to close. The closing cost is around $10,000. I am just not sure with the current market I can go-ahead and close it. If I do not close I'll lose the 5 percent deposit. I'm moving to another state in a year. The monthly cost after closing will be about $2,200. If I close will I able to get the deposit back by selling or will I be stuck? Please remember that I am a first-time home buyer.

Answer: The deposit on the property will be applied as a credit to you at closing. Your deposit seems to be about $11,850 ($237,000 x 5 percent), however if you're not getting 100 percent financing you will need additional cash to close the transaction.

What is the unit worth in today's market? What would it cost you to sell it? If you default on the contract, can the developer both keep your deposit and sue for other losses? What about your credit standing?

None of your options are good if the value of the property has fallen. What may make the most sense, if affordable, is to change your moving plans and keep the townhouse.

Did you have assistance from a buyer broker or attorney when you bought this property? Whatever the case, before going further you need to speak with a local attorney to see what the sale agreement actually says and with a local broker to determine the property's market value.

Question: I simply want to know if a recently purchased property in Utah has appreciated 60 percent for tax valuation purposes by the county assessor. I was notified by the county that the new valuation would increase 60 percent and my property taxes are being increased 40 percent. These changes were made about five months ago before the recent softening of the real estate market.

Do you think the county was too quick to increase rates in view of what is happening to the housing market around the U.S?

Answer: In most jurisdictions homes are re-assessed on a regular schedule, say every one, two or three years. Homes may also be re-assessed at the time of a sale -- after all, if you paid a given price in the open market that's a very good estimate of value.

In the assessment process there's often a lag time. If prices are going up it means owners are being under-assessed. If values are going down, it means values may be over-assessed until the next assessment.

What's happening nationwide is irrelevant to local assessments. Assessments are based on local sales, not national trends. It's possible for national prices to rise while local values fall -- and vice versa.

Speak to the local assessment office and see how they obtained the new assessment. Then if appropriate ask about your right to appeal.

Question: I'm planning to buy a house in Canada. As a non-Canadian what are the rules and regulations that are applied on me in order to fulfill this purchase?

Answer: Speak with a Canadian real estate broker and ask about their training with international real estate issues. Also, contact the commercial attache at the Canadian embassy in Washington at 202-682-1740.

Question: I'm considering buying a property through a friend, but discovered the following title trail: My friend bought the foreclosed property from the bank and prior to that the property changed ownership twice in 2005. My friend had quit claimed the property to an limited liability corporation for tax reasons, but now the company is quit claiming it back to my friend (confusing?) and I'm interested in buying it. Is it possible to get a loan to purchase a property with this kind of a title?

Answer: Can you obtain good, marketable and insurable title? Without it no lender will provide financing.

What is the current value of the property? Have you had it appraised? Lenders will make a loan based on the sale price or the appraised value -- whichever is less.

What about the condition of the property? Have you had a professional home inspector take a look?

Do you have assistance from a buyer broker? If not, have an attorney review any paperwork before signing. Go no further with this until you get proper, independent help.

Question: I recently went into partnership with a real estate agent and I feel he is leaving me penniless and I would like to file a complaint against him. How can I do this? Where do I write?

Answer: What partnership? What do you have in writing? Please see a local legal clinic or attorney for specifics. Ask if you have claims which can be taken to court or which may be grounds for a complaint to state real estate regulators.

Question: If two names are on a title (husband and wife) must both names also be on a listing agreement to sell that property, or is one of the names sufficient?

Answer: Two names on the title mean there are two owners. The property may not be sold without the permission of both owners.

Moreover, why would a broker list a property without the signature of all owners? The potential for conflict and dispute is enormous.

Question: Our home has been on the market for ten months. It's in move-in condition. Shows like a model. We have lowered it $50,000. It's in the MLS, on websites and all the other place to advertise it. What can we do to get it sold? Would a new broker help or hinder the process?

Answer: Figures such as "ten months" and "$50,000" need to be seen in context. How long are similar homes on the market in your community? What is the range of sale prices for like homes? As to changing brokers, what is it that your broker is not doing or that another broker could do better?

Sit down with your broker and discuss the marketing plan. Does it need to be changed? How?

Also, have the broker prepare a new competitive market analysis (CMA). A home listed ten months ago was priced and marketed with certain presumptions in mind. A change in market conditions may require a new and different approach to selling the home. In some markets and at some price levels, $50,000 may not be a sufficient reduction.

Have a real estate question? Send your inquiry to Ask Realty Times. 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. For past columns, please press Ask Realty Times.

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: October 27, 2006

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Have a real estate question for Realty Times? Wondering about buying, selling, financing, refinancing or renting? Here's where you can send your question to Peter G. Miller, OurBroker®, a nationally-known columnist, author and reporter. Peter G. Miller has written six books -- including The Common-Sense Mortgage -- a guide with hundreds of thousands of copies in print. Miller was the original creator and host of America Online's Real Estate Center and joined Realty Times in 1998. Send your questions to . Because of the volume of mail received, individual questions cannot be answered privately and not all questions can be used. Published letters may be edited for space and style and all letters become the property of Realty Times upon receipt.