Question: I'm an investor presently buying two pre-construction homes in Florida. I'm concerned about the downturn in the market. Are the sales and prices holding up, and what is the inventory of homes for sale?

Answer: The right place to check is with local brokers, who are in the market everyday.

Florida has evolved into one of the leading foreclosure centers. According to RealtyTrac.com , Florida in November had one owner facing foreclosure for every 282 households -- that makes the state second behind Nevada in the foreclosure rankings.

Florida is a large state in terms of both geographic area and population. This means that a general, state-wide trend may reflect local conditions in some areas but not in others. Given that real estate is a localized commodity, you need to look with care at the specific market you're considering. What are the trends for home prices in general? Condo values? How long are typical properties on the market -- and how do the numbers today compare with a year ago? Local brokers have such information.

Question: Would you buy real estate in a down market? Our area has seen a drop in home prices, so is now the time to buy?

Answer: While general trend information is useful and valuable, you're not buying all properties. You're buying a particular property, in a specific place, with certain prices and terms and with given loan rates and programs. You have to think about the property in the context of not where the market is today, but where you reasonably think it may be tomorrow. For instance, in three or four years will the local population be bigger? Is zoning constricting construction? Are jobs being added to the local population? Is the property in the path of future growth? Etc.

All real estate is unique, so the answer that works for one property and one buyer may not work for a different property or a different purchaser. It is the uniqueness of real estate which makes it interesting -- and in many cases, profitable.

Question: I've learned that my planned screened porch addition will overlap my property setback line by two feet at one corner and five feet at the other. Where can I seek assistance to complete a variance?

Answer: If you have a contractor, see if variance and permits are included as part of the process to get a building permit. For specifics in your community, just call the zoning office and ask what needs to be done. It may be that there's little more to do than fill out a form, in other communities this may be a big deal with lots of paperwork, a hearing and legal fees.

Question: I'm trying to close on a house in two days. The house was sold "as is" and when the appraiser went to value the house he said the roof needs to be replaced.

My lender wants me to have the roof fixed before closing. How can I be sure that when the roof is fixed the seller will not decide to back out of the sale? I would be out of the money. Can the lender make me put on a new roof?

Answer: The property is security for the loan. If the lender believes that the security is inadequate then the loan can and should be declined.

Why has this come up two days before closing or did it come up earlier? How long has the lender known about the appraisal report? Did the lender previously agree to fund the sale? Please have an attorney review your paperwork and circumstances.

Also, why would the owner back out of the sale? Does he or she have a better offer?

Question: Would it be better to do a cash-out refinance on my current (debt free) home or obtain a new mortgage for the purchase of a second home? And why?

Answer: Lenders are happiest when financing owner-occupied properties where the owners have equity. For that reason it's likely that you'll get a better rate and terms by financing the place where you live. Speak with lenders for specifics.

Question: I'm interested in pulling some equity out of my house to use on making improvements to the property. Do I have to have the house appraised to do this? And if it appraises higher will my taxes go up? I'm not trying to dodge Uncle Sam, just trying to plan my budget.

Answer: The lender wants to know the value of the property to assure that the loan is not larger -- and more risky -- than it should be. Thus the lender will require an appraisal.

If the value turns out to be higher it won't be an issue for Uncle Sam -- the appraiser does not report to any governmental agency. Your local and state government, however, likely do care because a higher valuation may be reflected in more mortgage debt the next time the property is assessed. That may suggest a higher valuation is appropriate.

Question: I'm considering converting my fireplace from gas to wood. The house was built in 1935, and -- this is what I'm wondering -- did they even have gas burning fireplaces in 1935? Because if not, wouldn't it make sense that sometime in the last 70 years someone had converted the fireplace from woodburning to gas and so I just need to remove the gas line to reconvert it?

Answer: Don't do anything until you have had licensed heating contractors look at the fireplace. You need to assure that the fireplace remains structurally sound, appropriately vented and up to current building codes.

Question: Are there city ordinances or laws that dictate how many people you can having living in a single home? Or do those rules just apply to people that aren't related?

Answer: Imagine that as a landlord you feel the property is best rented when it has not more than two occupants per bedroom. Now imagine that a household with many children and relatives wants to rent -- more than two per room. Can you just say no?

Kim Kendrick, HUD's Assistant Secretary for Fair Housing and Equal Opportunity, offered this answer to The Washington Post in response to a similar question:

"The Fair Housing Act does not prescribe what reasons landlords must use in making their business decisions; it only says that you CANNOT discriminate on an unlawful basis in making those decisions. For example, you cannot decide not to rent to someone because they have kids. However, the Fair Housing Act's general provisions do not apply to landlords who own only three single-family houses. Still, the law says you cannot discriminate when you place an advertisement to rent that house. You can't say 'no kids' in an ad, or tell people that when they come to apply."

The Piedmont Housing Alliance explains that the Fair Housing Act (42 U.S.C. 3601) prohibits discrimination in the sale, rental, financing, and advertising of housing on the basis of race, color, religion, national origin, sex, familial status, and disability. Among other prohibited practices, says the organization, is an "unreasonable restriction on the number of people per bedroom."

There are also state and local rules which may apply. For specifics, please speak with a local real estate attorney.

Question: What's the difference between a broker and a salesperson within a real estate agency?

Answer: In most jurisdictions, a real estate "broker" is an individual who is licensed to assist others for a fee in the sale, purchase, exchange, rental and management of real estate. Importantly, a broker has the right to contract directly with the public.

A "salesperson" and an "associate broker" must work under the authority of a broker. Salespeople and associate brokers do not have the right to contract directly with the public, thus the listing and buyer brokerage agreements they obtain are actually the property of a broker.

The broker has a significant obligation to oversee salespeople and associate brokers who work under his or her authority. When it comes time to be paid, all money goes directly to the broker, who then splits fees with salespeople and associate brokers.

Question: I hear the mention of OFEHO a lot on the news and on Realty Times . What exactly is OFHEO?

Answer: OFHEO is the Office of Federal Housing Enterprise Oversight. It says that its job is to "ensure the capital adequacy and financial safety and soundness of two housing government-sponsored enterprises (GSEs) -- Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are the nation's largest housing finance institutions. They buy mortgages from commercial banks, thrift institutions, mortgage banks, and other primary lenders, and either hold these mortgages in their own portfolios or package them into mortgage-backed securities for resale to investors. These secondary mortgage market operations play a major role in creating a ready supply of mortgage funds for American homebuyers. Combined assets and off-balance sheet obligations of Fannie Mae and Freddie Mac were $4.2 trillion at year-end 2005."

In basic language, OFHEO is a federal regulator that oversees two large financial entities.

Question: I've just made an offer for a house. If the offer is accepted, how long do I have to apply for a mortgage?

Answer: Many real estate contracts say you must apply for a loan within so many days, say seven to ten. Others require that you apply as quickly as possible, because "time is of the essence."

However, there are two problems with such language. First, you should have spoken with lenders and gotten pre-approved before ever making an offer. Second, regardless of what form agreements may require, the current mortgage marketplace makes it essential to get financing lined up as early in the process as possible. Don't wait seven days, or ten days or whatever to contact a lender. Get in touch immediately if you have not yet done so.

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