Question: I have a four-unit building I bought for $800,000 a year and a half ago. I could sell now for $1.2 million. I live free in one of the units and profit a few hundred dollars on top of that. I hate to sell because this is a very hot market and it is expected to keep rising. I want to buy for $500k to $600k. I now owe $650k on the four-plex. I thought I would sell and buy the house and another rental property for about $600,000 to avoid a capitol gains tax and pay the house off in full, and hopefully break even on the loan with the rental. Does this sound like a decent move?

Answer: You have a four-unit property that produces enough rent from three units to pay for a $650,000 mortgage and basic costs. If you rented the fourth unit, the property might produce enough revenue to support a loan worth $866,000 at the same interest rate and terms.

Or, you could refinance and remain on the property and buy elsewhere. This might be more attractive because better financing might be available.

By not selling you would save both taxes and marketing costs, money that could be applied to another acquisition. Also, you would still have two properties with the potential to appreciate.

However, no strategy is risk-free. While you have made a terrific profit to this point, you need to consider what happens if either prices or rental rates in your community slow or decline.

Question: My husband purchased our house in his name before we were married. Now that we are married I have asked that he put my name on the deed and/or the loan if possible. He said that I couldn't be put on the loan and he has made no attempt to put me on the deed despite numerous requests. He then decided to re-finance (after our marriage) and I am not involved in the process at all. Both of our debts will be paid off from the re-finance. I would like to have some financial footing in our house and want to know what steps need to be taken.

Answer: In the usual case, a name cannot be added to a real estate title without permission of the lender or new financing. The reason is that by changing the title ownership is also being changed and new risks to the lender are being introduced.

However, there is a special consideration available in the case of "a transfer where the spouse or children of the borrower become an owner of the property." Here the lender cannot enforce a due-on-sale clause under the Garn-St. Germain Act .

By cleaning up your debts as well as his own through refinancing, your husband is trying to do the right thing. Because of the special protections available, it is in your interest and his to be on the title as married owners. For details, please speak with a real estate attorney in your community.

Question: We now rent but are buying a house. Is there a way to break the lease early because we are about to become first-time homeowners?

Answer: It's good that you are about the buy a home. However, the landlord also has interests; if you break the lease you may face a variety of damages.

Instead, try this: Speak with the landlord. Explain your situation. It may be the owner will be able to find a new tenant for the balance of your lease and thus, minimize or eliminate any damage claims.

Question: I bought a condo in 2000 when real estate prices were reasonable. Since then, my condo association fees have increased four times, doubling my initial fees. At this point my association fees are one-third of my mortgage.

The problem is that my association determines the monthly fees based on square footage. My two-bedroom unit is twice as large as most units, however, I do not have any additional amenities such as a private entrance or yard that would be more costly to manage. I've shared my concerns with my association board, only to be told that they have the right to charge me more based on square footage since I can have more residents living in the property.

As real estate has skyrocketed, so has my property value. I don't know if I should sell and try to buy another property (which would be financially straining based on today's prices) or, if I should stay put and reap the benefits of higher property values. What are my options?

Answer: The assessment scheme is set out in the condo documents. Sometimes assessments are based on square footage, sometimes on the number of bedrooms, etc. This scheme cannot be changed without a wholesale revision of the condo documents, and that's unlikely to happen.

You have an appreciating property. Can you rent it and buy elsewhere? That might be the best of all worlds -- if the condo allows rentals.... Speak with local real estate brokers to see what alternative properties might be available in your price range and area of preference.

Question: I contracted with a builder to build a $430,000 house. The contract closing date was to be Sept. 30th -- last year! I have also added over $40,000 in upgrades.

It's now March '05, the appraised value from four different appraisers is less than $400,000. Do I have any recourse or remedy?

Answer: There are several issues here.

First, that construction was delayed is likely permitted in your sales agreement, especially if it is the builder's form.

Second, that the value has changed does not mean your original agreement is somehow invalid. Had the appraised value risen would it be okay for the builder to break the contract and sell to someone else for a higher price?

Third, what about financing? If a lender will no longer provide such financing as was required in your agreement, is the deal still on? Have an attorney look at the sale agreement for specifics.

Follow-Up: Last week we looked at a question which has raised a follow-up idea, something to consider.

The question concerned an individual who bought a property for $265,000 and then gave it as a gift to a brother four years later when the property was valued at $500,000. The issue was what would be the brother's taxable basis for the property: $265,000 or $500,000. I said one would have to look at whether the title was transferred at full value or at a discount -- in other words, was there really a "gift" in the form of a discount or a full-price "sale."

In response, Ross C. Heim , an attorney in Vernon Hills, IL, raises a good point: He writes that "when a gift is made, the donee assumes the donor's basis. No 'sale' is deemed to have occurred and the donee does not get a step-up in basis to the date of gift value. Therefore, in this instance the donee brother's basis is $265,000 and he will have to recognize gain between his eventual sale price and that basis, not the $500,000 value on the date of the gift."

In effect, you might get a different answer depending on how the property was transferred. As we said last week, it's wise to review the transaction with a tax professional for specific advice.

Question: I'm concerned that my house isn't going to sell. I just put it on the market 10 days ago and have had only four or five agent showings and eight people show up at my first open house. Do real estate agents actively market homes they are selling to other real estate agents or is the norm to do mostly advertising?

Answer: Ask you broker how many days a home in your community is typically on the market. That will give you some idea of local selling conditions.

However, all properties are unique. It can happen with two similar homes, that one stays on the market far longer than the other.

In just a few days your broker has had an open house for the public and has made the property available to a number of local brokers. This seems very sensible and reasonable, the broker appears to be marketing the house as promised.

Question: Is it true that it's always hard to sell a property in a high rise building, especially if it's a one bedroom apartment?

Answer: No. The real question is whether the building and the unit are attractive in your particular market at a given price and terms. Change the price and terms and the unit will become more desirable.

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