Question: We just recently closed escrow on a home and upon moving in, we discovered a horrible cat urine smell in the master bedroom closet. While trying to resolve the problem, we noticed some stains on the carpet.

I am curious to know if the previous owner and their broker are obligated to disclose pet damage to the area. They were the only owners of the home and up to this point have denied the existence of a cat. Based on the smell and the stains, it appears otherwise. Do we have any recourse?

Answer: When you buy real estate owners have an obligation to disclose material defects -- and buyers have an obligation to protect their interests.

Did you make the sale contingent on a home inspection satisfactory to you? Did you use a buyer broker? Was the closet somehow off limits? Were the stains purposely hidden? If the odor is now so pronounced, why did you not notice it during the pre-settlement walk-through or when you originally looked at the home?

The owners, if they had a cat, could say with some justice that the property reflects normal wear and tear and that you were not promised real estate perfection.

Question: I listed my house on the MLS for free and for zero commission. I now have a contract on my house, but the broker with whom I listed appears to have gone out of business. They do not respond to emails, telephone or FAX, and their website has been down for over a week. I cannot locate any current information about their status on the Internet.

From what I understand, the broker is the only one that can update my MLS listing, but they are nowhere to be found. What am I supposed to do about the MLS listing? Leave my house listed as "active" forever?

I have contacted my state real estate commission and all they will tell me is that the broker is listed as an active broker, and that I need to deal with my broker or contact an attorney.

This could turn into a MAJOR problem for MLS. I would appreciate SOMEONE taking this seriously, not just for my sake but for the sake of all the others in a similar or worse situation. (I understand some sellers may have paid for a more comprehensive service from my broker.)

Answer: If you're dealing with a sole proprietorship it may well be that the owner has a sudden accident or illness or otherwise cannot respond to you for a brief period. Since you only know that communication has been difficult, it's best not to make additional assumptions which may prove incorrect.

You do not have an arrangement with the local MLS to market the property, you have a listing agreement with the broker, thus the MLS does not want to remove the listing without proper authority and that authority is the listing broker. No doubt the MLS has protocols in place to deal with situations similar to what you describe, but it may take a few days to resolve the matter.

One approach might be to keep the property in the MLS but to show that it's "under contract" -- it will not actually be "sold" until closing and a change of title in the public records. In this way you could alert brokers and buyers to the current status of the property.

Question: We're in the military. We got orders to go overseas, we put our home up for sale, got a buyer and then our orders were changed.

The broker is telling us we must sell our home by the contract date. The buyer wanted to close earlier than the scheduled date, she pulled out once and said if we do not close by a given date she will pull out.

The broker, a dual agent, is making us feel like we will be sued for her commission and whatever the buyer sues for if we don't not sell. We let the broker know the minute the problem came up. We feel like we're being bullied into selling our home even though we have no control over what's going on.

Answer: Imagine that you are the buyer. You may well of given up a rental or placed a home for sale because you believed that you would have a replacement property by a given date. In fact, you could have sold your current residence. The buyer has a very reasonable stake in this matter.

From your perspective as a seller you could have made both the listing and the acceptance of the purchase offer contingent on the receipt of final orders to go overseas. Such a contingency, however, would have made your home less attractive to would-be purchasers. Did your broker discuss the pros and cons of such a contingency with you?

It would be best in this situation to see what the buyer really wants and needs. If the transaction cannot close, perhaps the listing agreement can be untangled by offering to pay the broker's actual marketing costs or a token fee. No doubt as a matter of good public relations the broker would like to settle this matter in a way that makes sense for everyone.

While it may be frustrating to buyers, sellers and brokers, sometimes purchase offers do not work out -- think of sales which fall through because interest rates for required financing rise above contract maximums. Such events are not anyone's "fault," they simply happen.

Real estate offer forms routinely recognize that agreements are not absolute until various barriers are overcome. They are, instead, "contingent" arrangements, offers which only go forward when certain conditions have been met.

For additional help, contact your state real estate commission or speak with a JAG officer on your base.

Question: What is a "home buyer's tax credit?"

Answer: A "home buyer's tax credit" can have a number of meanings, depending where you are located -- and sometimes when you are buying a home.

For instance:

• To entice purchasers, a seller might agree to pay all state and local transfer taxes.

• There has been talk of a credit for first-time home buyers as part of the FHA modernization legislation now being considered on Capitol Hill.

• There has been, but is not currently, a $5,000 home buyer tax credit for first-time purchasers moving to Washington, D.C.

If you have been offered a home buyer tax credit be sure to understand exactly what it means: For instance, the ability to write off $5,000 from your income reduces your tax bill -- if you're in the 25 percent tax bracket you would save $1,250. However, if a $5,000 tax credit means your actual taxes will be reduced by that amount, then the benefit is fully worth $5,000 -- a much bigger deduction.

Alternatively, a $5,000 credit from a seller to off-set transfer taxes reduces your expense to close, and that's not a bad deal either.

Question: My parents are selling a portion of their primary residence to me. Does the capital gains exclusion apply to the sales? Also, if the capital gain of the portion I purchase does not utilize the full $250,000 exclusion, can they apply the remaining exclusion on their next sale?

Answer: There are two issues raised by your question.

First, is the sale being made on the basis of full market value? Has the property been appraised? Sales to relatives can set off bells.

Second, the residential capital gains write off is as much as $500,000 for married couples who have used the property as a principal residence for two of the past five years.

Third, are you buying land or part of the actual house? The answer can make a difference in terms of deductions.

Fourth, the IRS says "the sales or exchanges of partial interests in the same principal residence are treated as one sale or exchange. In applying the maximum limitation amount to sales or exchanges that occur in different taxable years, a taxpayer may exclude gain from the first sale or exchange of a partial interest up to the taxpayer's full maximum limitation amount and may exclude gain from the sale or exchange of any other partial interest in the same principal residence to the extent of any remaining maximum limitation amount."

In other words, you cannot take the residential capital gains write off twice, but your parents may be able to take part now and part later. Before proceeding with the partial sale you're describing, be sure to first get advice from a tax professional such as a CPA, enrolled agent or a tax attorney.

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: July 11, 2008

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

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.