Question: My wife and I purchased a home. At the closing we received a disclosure statement saying that the roof was new, the A/C was five years old and the furnace was a year old.

We are in the home three months and we had to have an HVAC company in to check out a problem with the furnace. They checked the serial number at my request and found out the unit is over 11 years old which puts it near the end of its predictable life.

The disclosure clearly states that the furnace is only one-year old. I'm considering a suit in small claims court. Is this the way to go?

Answer: Possibly. There are several problems here.

First, to see if you have grounds for a claim against the owner and his agent. For specifics, see a local attorney.

Second, you should never rely on a seller disclosure. Why? The most-honest seller on the planet may not have sufficient information or understanding to complete such a form.

For instance, if a form asks "does the roof leak" it may be that to the owner the roof does not leak because he has no information to the contrary. Of course, it may also be true that the owner has never been in the attic. The owner in this situation can honestly answer "no" because to him that's the way it is.

As a buyer you want information about the condition of the property and the only way to get that information on a reliable basis is to have a professional home inspection. When you make an offer to purchase property be sure that it's "subject to" a home inspection which is "satisfactory" to you.

Question: Foreclosures are on the rise right now, so is it possible to swap a house (property AND mortgage) for a smaller and more affordable property?

For example, I have a two-bedroom townhouse with $200,000 loan. Somebody has four-bedroom single family home with $400,000 loan, but they can't make payments and need to sell. Instead of selling, can we swap the houses and loans? I take on his loan and payment and get title to his four-bedroom house while he takes on my smaller loan. Is this even possible?

Answer: There's a lot of sense to what you're suggesting -- but also a number of complications. Let's look at some of the big issues.

First, the loans on both properties will not be assumable without permission of the lenders. This means the lenders might allow assumptions if you both qualify, otherwise you'll need to refinance each property.

Second, you need to ask how much equity each owner has. If I have $100,000 in equity and you have $50,000, then a swap of homes is not good for me unless you add cash to the pot.

Third, you cannot have a tax-deferred exchange of principal residences because neither property is used or expected to be used in business or trade. In effect, what you will have are two individual and separate sales. See a tax professional for specifics.

If the owner of the $400,000 property is current on his mortgage and has good credit, then what you suggest may still make sense because if the bigger property is unaffordable the owner's good credit will soon disappear and with it the chance to finance the smaller property or any property.

The bottom line is this: The owner of the big house has a buyer and so do you. In many markets this is the start of a good deal, so you and the other owner need to work out mutual and simultaneous sales.

Question: I recently found a house I want to buy in a new development by a major builder. They haven't yet started building the second phase -- they are trying to sell all the houses in the first phase. I want to buy the model, but they said they weren't offering that for sale yet and wouldn't be selling it for possibly two years. The senior community rep put me on a list of people interested in the model. Recently they dropped their prices by about 1/6th and it's such a good deal that I'm tempted to just buy an empty residence.

But I REALLY want the model. So I asked the rep if I could put a deposit down for one of the residences, and if the model comes up for sale before the last residence sells, can I use the deposit for the model? He was evasive but his final answer was no, that couldn't be arranged. He said when the model comes up for sale he's going to go down the list and call everyone and the first person to jump, gets it.

My question is this: Is there some sort of inducement you know of to make my offer too good to pass up? Without waiting two years to find out if I can even buy it? I've heard that some home builders will sell the model early and lease it back from the owner until all the residences have sold.

I'm very flexible about when I can move in, I could wait two years, financing won't be a problem, and I can pay them asking price and then some. I'm confidant we could arrive at a mutually agreeable price.

Answer: Let's sit back for a moment and see what's really going on here. The builder can't sell the first phase homes and has been forced to drop the prices by 1/6th. For $600,000 homes that's a $100,000 discount.

Despite this marketplace reality, you're willing to offer full-price for the model and maybe even more. This seems like an excruciately-expensive way to buy real estate, one I cannot justify on a financial basis.

But this actually could get worse. For instance, what if the builder doesn't build out a second phase? What if values shrink further? If you buy the model at full price it will be virtually impossible to sell for what you paid until prices recover -- and who knows when that will occur?

The builder's broker is right to offer the property on a first-come, first-served basis -- assuming that the price and terms have not changed. However, you're offering to change the price and terms by going above the asking price. In this situation, it would be appropriate for the broker to go down the list and say in turn to each prospect, "we have this offer. I promised to contact you when we were ready, able and willing to sell the property and now I am. Would you have an interest in buying with this price and with these terms."

In this way the broker can satisfy his obligation to go down the list of prospects and if no one is willing to meet your offer, then the property would be yours. It could then be leased back to the builder for a specific time period, say 18 months or two years.

Question: My daughter just bought a home for $310,000. It had rained the night of closing pretty good, next morning they began moving their things in and in the living room there was water stain on the wall, carpet in the corner was wet also. She began pulling back carpet and there in the corner was all black and rotted wood. They had hired a home inspector to come in and check the home in which he gave his OK to everything. She called her real estate agent and she said there is nothing she can do.

Will my daughter now have to pay for the leak from the roof or what is her options if any?

Answer: Your daughter should go to an attorney to find out who is responsible for what. A rotted floor did not happen overnight. For example, did the sellers' hide the problem with a paint job or new carpeting? Was the carpet stained or discolored? Could any damage be seen from the basement below the living room? Was there any damage in the attic? Were roof shingles missing or damaged? Etc.

Question: Almost 40 years ago I bought a house in the Bronx with my ex-husband, his mother and his aunt. His aunt has passed away and he is now trying to convince me that his aunt's share of the house goes to him and if his mom passes her share also goes to him. I was told by a friend that the shares cannot be passed down. Is that true? I don't know how much longer his mom has and I would like some information to throw at him.

Answer: The first question you have to ask is how are the interests in the property now held by each party. The second question is what did the aunt say in her will. If the aunt did not have a will or gave her interest to someone else then your ex may have no more claim to the aunt's share than the postman. For specifics, contact an attorney in the Bronx.

Question: If a fence is over the property line and on my land by 14 feet can I take it down? The fence was there when I bought the place.

Answer: Don't touch that fence -- at least not yet.

What you may have is an "easement by prescription." This is an expression which means that property has been used by someone else in a manner that is open, notorious, adverse and continuous. If this situation has gone on for many years then your neighbor may actually be entitled to continued use of the land. Speak with an attorney for specific easement requirements in your jurisdiction.

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