Question: We are currently looking into selling our vacation rental home and purchasing a fractional beach front home (1/13th share). Can we do a 1031 exchange for this property? As we are we are allowed to use the home for only four weeks per year, what would be the rental requirement?

Answer: Ed Horan, a certified exchange specialist with the Realty Exchange Corporation (www.1031.us), offers this response:

"Assuming that the vacation rental home you plan to sell qualifies as a 1031 exchange relinquished property, your purchase of a 1/13 interest as a replacement property will not qualify.

"The reason for this is that the IRS considers the personal use of the property by any co-owner as being personal use by you. Thus, even if you rented the property out for your whole four weeks, the accumulated personal use by your co-owners would disqualify the property as being held for business or investment purposes."

For more information see IRS Publication 527, Residential Rental Property, and speak with a tax professional for specifics.

Question: We're listing a piece of property for sale. We are wondering whether to allow the broker to represent the buyer as well as us. Is this okay?

Answer: Rules and practices vary by jurisdiction, but in basic terms when you list your home with a real estate broker that individual is your agent and you are the client. As an "agent" your broker has a certain obligations to clients, obligations sometimes represented by the term "coal" -- care, obedience, accountability and loyalty.

According to the National Association of Realtors , a 2006 study of buyers and sellers shows that 44 percent of all purchasers had written buyer brokerage agreements while another 20 percent had oral agreements. Twenty-six percent of respondents did not use buyer brokers and 11 percent didn't know who represented them, if anyone.

In effect, there's a good chance your broker will bring in a free-range buyer, someone unrepresented by another broker.

Your broker can act as a disclosed dual agent and represent both you and your buyer in the transaction. In some jurisdictions, a broker may be able to act as a "facilitator" bringing the parties together but representing no one. Where there are big brokerages with multiple offices you sometimes have one agent representing a seller and another representing a buyer. Since both agents work for the same broker, the issue of dual agency arises.

As an owner your goal is to sell the property for the highest price and best terms you can get in your market at this time. It's important to be aware of agency issues and it's important that your broker provide all required disclosures, but no less important you want to get the property sold.

Philosophically, I would prefer in a perfect world that every seller and every buyer each have a separate broker in every transaction, but such a standard is not practical in today's marketplace. The good news, at least, is that 44 percent of all purchasers have written buyer brokerage agreements.

What is practical and what is now permitted in most jurisdictions is disclosed dual agency or what is sometimes called "designated" agency.

Dual agency represents a conflict of interest because buyers and sellers inherently have differing agendas. However, disclosed dual agency -- because it is revealed up front -- places both parties on notice that there is a conflict, a conflict which each has elected to accept.

Your broker should be able to fully and clearly explain agency standards and requirements in your jurisdiction. For instance, is there a presumption that unless otherwise agreed a broker automatically represents a buyer or seller? This is a conversation worth having before a listing agreement is signed so you understand exactly what is being done and why.

In addition, either a buyer or a seller may also engage the services of an attorney to review contracts and provide legal advice.

Question: I recently purchased a home. In the contract my broker hand-wrote that "all window coverings" were included in the sale.

Guess what? The drapes and hardware are missing.

The seller's agent now says the drapes were not "window coverings" as they did not completely cover the windows, and other coverings (blinds) were left on those windows.

She also says the wooden rods are not window coverings nor are they "fixtures" because they could be removed without damaging the wall.

To me this is a no-brainer.

What do you say?

Answer: I say contracts should be written in a way which is neither unclear nor debatable.

Legal language has a particular wording where each term has a specific and agreed-upon meaning. "Window coverings" is not a term of art, but rather a general expression. For instance, it might have been better to say that you were to keep all window coverings and window dressings in place as of April 27, 2007, including but not limited to all shades, blinds, curtains, valances, drapes, curtains and all related hardware and equipment.

In this situation, I would ask the broker for new drapes and hardware.

Incidentally, the test for a "fixture" is not whether it can be removed without damage, but whether it is attached to and intended to be a part of the property. For instance, you could remove a built-in oven from a kitchen without damage but then you would have a giant hole. Plainly the oven should stay.

Question: I own a duplex. I live on one side and rent the other. For twenty years this has worked very well. Now all that has changed. The duplex is cleaned, remodeled, and ready but for the past three weeks I have interviewed a cross section of people who have no sense of responsibility or consideration for others. Some are downright rude. I have canceled my newspaper ads for now. I'm using word-of-mouth among friends and acquaintances.

I realize our area is in deep trouble with housing and jobs. I want to provide a home; that's all. I have reduced the rent. I am listed on three different Internet sites, also.

Is there any other advice you can give me to rent my unit?

Answer: I'm not sure what constitutes a lack of responsibility or rudeness in your particular situation, but I am fairly certain that such qualities are not related to the local job market.

The problem, I suspect, is that you have had a tenants next door for 20 years. You had a certain comfort level with your tenants. Now they are leaving and change, in and of itself, may be difficult.

You seem intent on renting the property by yourself. Why not use a local broker? You'll have to pay a fee, but perhaps you will also have less stress. That may be a very worthwhile exchange.

Question: I'm curious about the whole "reverse mortgage" process. Although I'm probably 35 years from retirement, I've been following the Social Security and Medicare debate, which is all doom and gloom, so I wanted to know how reverse mortgages work. Do you have to own your home free and clear to qualify for a reverse mortgage? What's in it for the mortgage lender? How do they profit? And what happens to the mortgage if the homeowner dies? What if the house is willed to a family member? What then?

Answer: Reverse mortgages are available to those aged 62 and older. A home need not be free and clear of all debt, but homes with no mortgage balance or a small mortgage balance are the best candidates for a reverse mortgage, or what HUD calls a "home equity conversion mortgage" or HECM.

When an individual dies or moves away from the property the balance owed on the reverse mortgage is due and payable. This typically means that the property must either be sold or refinanced. If sold, any cash above the debt would be part of the owner's account or estate. If refinanced by an heir the property could be retained.

Question: About two years ago my wife and I purchased investment property in an area being developed by a large national builder.

We thought the development would have been sold out by now, but with the housing slowdown it may be years before the project is completed.

Do builders have the right to prohibit an owner from using a sign to advertise a property for sale or rent?

Some people have put a small for sale sign in a window, but I am told the signs had to be removed.

Answer: It's just a guess, but I imagine the builder has not turned over control of the HOA or condo association to the owners because a given number of units have not been sold. In effect, the builder can make up whatever rules it likes.

The core issue here is that if your unit sells it means the builder may have lost a buyer. In a stalled market, less competition is good for a builder unable to unload his own units, thus one possible reason for a sign prohibition.

What can you do? Advertise off the property and have lots of photos and videos online. Local brokers can tell you more.

Question: I have a one bedroom, one bath condo in a major city. I want to rip out my whirlpool tub and change it to a stand up shower only. With it being my only bathroom, do you think that would negatively impact the value of the condo?

Answer: I think the change you propose would devalue the worth of your unit and it would cost a lot of money to accomplish, assuming you were able to get all necessary permissions from the condo association and the city building inspector.

Why? Because you can take a shower in a whirlpool tub, but you cannot get a whirlpool bath in a shower. In other words you will lose a feature which many people consider attractive.

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