Question: I have a friend whose broker showed her house to some very "questionable" people. They said their aunt was going to buy a house for them. It was an $800,000 house and there seemed no way these people could be seriously looking at it.

The men later came back with the intent to kill and rob my friend. Luckily an informant told the police and they were able to apprehend the men. Shouldn't the broker have at least called the "aunt?"

Answer: There are several issues here:

1. First, a broker who refused to show homes to very "questionable" people would likely be sued for discrimination by the prospects -- as would the owner represented by the broker.

2. Second, it's a good practice -- but not a required practice -- to pre-qualify prospects before showing homes. However, for reasons of privacy not all prospective buyers are willing to divulge financial information -- especially to brokers who represent sellers. The solution is to have buyers provide a letter from a lender saying that in general terms the buyer can qualify to borrow at least X dollars. The catch is that such a letter is not always available at the very moment a would-be purchaser walks into a broker's office.

3. Third, agent safety -- and consumer safety -- is a serious matter. Before showing homes, brokers should have a universal policy of copying driver licenses and requiring call-backs from agents at designated times, etc.

4. Fourth - Simply because these particular buyers are alleged to have had bad intentions does not mean such incidents are common among the tens of millions of house showings each year.

Question: In terms of a real estate investment opportunity:

• Person A provided the credit standing without which person B would not be able to acquire any real estate interest. Person A also put up half of the up-front investment and a third of the money required to renovate the property.

• Person B has not risked any credit, he can walk away from the deal at anytime without consequence, though he did put up half of the down payment and two-thirds of the money needed for repairs.

Who reaps the higher rewards?

Answer: The real question ought to be this: Before deciding to buy and renovate investment real estate, why didn't the two parties have a written contract? Attorneys could easily draw up a proper agreement that would plainly spell out what each party was supposed to contribute and what each party would receive or owe in the event of a profit or loss.

Attorneys could also suggest the best form of partnership or corporation to establish.

As things now stand there is no answer to these questions because logic, intent and fairness don't matter. No one knows what each party thought before the arrangement started -- each could have wildly different views of who was entitled to what. At this point the parties are best served by sitting down and finding a compromise that is quicker and cheaper then meeting in court.

Question: I have a single-family house and a condo apartment that were both purchased less than two years ago. If I sell my house and move to my condo apartment, would I have to pay a capital gains tax on a probable profit of $50,000?

Answer: While there are some exceptions to the two-year rule, generally you can expect to pay federal taxes at regular rates. Why not wait until the current residence has been used for two years? Then the profit will not result in any federal tax. Please see a tax professional for details -- and ask about exceptions to the two-year standard.

Question: If I feel that I have been the victim of appraisal fraud, what steps do I take to seek justice?

Answer: An appraisal is an independent estimate of value provided by a licensed appraiser. Appraisals for a given property can and do vary, so by itself a given valuation is not evidence of anything wrong.

Was the appraiser inappropriately or secretly compensated? Did the appraiser have a secret interest in the property? For specifics, contact an attorney or the consumer affairs office with your state attorney general.

Question: My husband and I are building a house in Florida which is almost complete. We intended to move our family there and use it as our primary residence.

However, when my husband told his company he was leaving they gave him an offer he couldn't refuse. Now we're thinking about renting out this property for a few years and then moving down to Florida.

If we buy and finance the house as a primary residence and then rent it out at a later date after the closing, what are the implications for our mortgage?

Answer: When you applied for the mortgage you told the lender that you "intended" to occupy the property as a primary residence, usually within 30 days of closing. On the basis of that statement, the lender offered you residential financing and not a higher-cost investment loan.

When you go to closing to complete the financing, the lender will again ask about your intentions. You must tell the truth -- and the truth is that you are no longer buying as an owner-occupant. Since the property will now be used as something other than a prime residence, financing will not be made available on the basis of the original application.

Contact the lender immediately. Explain that matters have changed. Be prepared to carefully and fully document your original intention to occupy the property as a residence as well as the timing and circumstances of the new job offer. Such things happen.

The lender may then offer financing at a higher rate and require more down. However, it's possible that you may need another lender if your current loan source does not provide investment financing.

Question: We will be living in my existing home while we buy, tear down and build a new home on different lot. Our existing home is now worth $450,000. We owe $140,000. After all is said and done our new home will cost about $850,000.

We would like to pay as little as possible on our existing home while we build our new one. What type of options do we have?

Answer: Since the new home represents the bulk of your financing needs, why not get a combination mortgage that covers the cost of the lot and construction, and then converts into permanent financing? Such financing can be structured so that no payments are due until the home is completed. Ask lenders about the programs they offer, down payment requirements, rates, etc.

Question: Our broker showed our property, but did not call or leave us a note telling us how the open house went. Should we expect such communication?

Answer: Other than for some sort of personal calamity that prevents contact, it's simply good business for a broker to communicate with client sellers regarding the results of an open house. This is an opportunity for a broker to evaluate the traffic drawn by the open house, to report prospect comments and to touch base with the sellers. In other words, to provide a service.

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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.