Question: We would like to sell our current house and get a new one but we have yet to be here for 24 months. I have heard that as long as we reinvest in new real estate we won't have to pay the capital gains tax. Is this true? Please tell me if we can sell now and buy our dream house before without having to pay the tax.

Answer: In the usual case you must have owned and occupied a property as your prime residence for two of the past five years. However, there are several exceptions which may allow you to get some tax relief. For instance, are you moving more than 50 miles because of a new job? Do you have a military obligation which has forced you to relocate? Unfortunately, finding a dream home is not on the exception list and reinvesting money in a new residence is not grounds for a write-off. For specifics, speak with a tax professional.

Question: What are the consequences if you lose your house to foreclosure. It was purchased with 100 percent financing last year. Can other assets be taken after the foreclosure?

Answer: To determine your liability after a foreclosure you need to know what state you're in, what type of loan you have -- either recourse or nonrecourse -- and lender policies.

For instance, in at least one state if a lender forecloses on a "purchase money mortgage" -- the financing used to acquire the home -- there is generally no recourse against the borrower. If the property is refinanced this advantage is lost.

In other states, however, lenders can potentially go after deficiencies. Some lenders do go after borrowers, some do not.

For details relating to your particular situation see a real estate attorney in your community. Also, see a tax professional because debt you do not repay may be considered taxable "income" in certain circumstances.

Question: We're selling our condo to another family member without a broker. Would you suggest an Attorney? Abstract? Who should we go to organize, and consummate the transaction?

Answer: This may well be a transaction among family members but it's still a business deal. Who, for instance, will pay the transfer taxes? How is the transaction being financed? As to a title search, title insurance, appraisal and such they will all be required by a lender. If there is no lender in the transaction, such services should still be required by a purchaser.

You don't want a situation where this transaction becomes an endless source of disputes at family gatherings. Instead, have an attorney provide a local real estate agreement and set a date for closing. This way everyone will understand the transaction and all the bits and pieces will be properly tied together.

Question: I have a property that I bought a year ago, sold, and my total profit is $40,000. A friend told me that it will help if I subtract my $20,000 renovation cost. Is this true? What about closing costs?

Answer: You did not have a $40,000 profit. You bought at one price and sold at another. There was a $40,000 difference. For tax purposes, not all of that $40,000 is a taxable profit. From the $40,000 you should subtract that $20,000 renovation cost, the closing costs to acquire the property, the marketing and closing costs to sell and probably other expenses. If you owned the property for more than one year you will be taxed at the low, long-term capital gains rate. For specifics, please see a tax professional.

Question: I purchased a new home in 2003 and the warranty expired in early 2005. I found my fireplace blows out lots of cold air through opening into my family room. I contacted the builder and they're very slow (maybe because the warranty expired already). They sent a contractor later and the contractor told me the chimney is not built high enough. In this situation, what should I have to do? Is the builder still responsible for the chimney and do they have to extend the chimney height? Do I need to contact the city inspector and ask if my chimney height complies with the code?

Answer: Yes. Contact the local building inspector. If the property was not build to code then there's a problem because homes are supposed be inspected by local governments before a certificate of occupancy is issued. If the chimney is not up to code and you have a fire you may not be covered by insurance.

Are you in a large development? If yes, what about other properties?

Speak with a fireplace contractor to see if your system has or should have a flue. Also, consider the use of a glass doors to keep out drafts.

Question: I'm selling my house and have had terrible experiences with brokers and today is no different. Is there a way to get out of my listing contract with my broker without any cost to me.

Answer: Perhaps. Many listing agreements allow sellers to withdraw without penalty or by paying for advertising costs prior to the termination date. In cases where a listing does not have such a clause, why not speak to the broker and explain in detail why you are dissatisfied. Most brokers do not want to work with unhappy clients so possibly an accommodation can be reached.

Question: I bought a home and now want to quitclaim the deed to another person. Will filing a quitclaim affect my credit score? Should I refinance the house first then quitclaim the deed? Or do I quitclaim the deed then refinance the house?

Answer: You are asking about changing the title. There is no benefit financing prior to using a quitclaim deed because once the title changes the lender likely will call the loan.

What are you getting in exchange for the property? Have you made required disclosures to the new owner? What property taxes will be owed on the sale -- and who will pay them? Does the current loan have a prepayment penalty? Did you tell the lender you intended to occupy the property as a resident owner within 30 days after closing? Etc.

Please sign nothing until you have first spoken with a local real estate attorney.

Question: We're buying 1.5 acres and have determined that we got in over our heads. We are financing this purchase with a home equity loan. Escrow is due to close in April. Do we need to give up our $1,000 deposit because we are pulling out of the deal?

Answer: Please read your contract. You have provided a $1,000 deposit but there is likely a section relating to damages. That section may allow the seller to keep your deposit, keep your deposit and sue you or -- less likely -- also demand that you complete the transaction, a process called "specific performance."

Also, about that home equity loan. By any chance does it have a prepayment penalty if you pay off the loan in less than two or three years? You may want to keep the loan in place but with a tiny balance, depending on how the loan agreement is worded.

Have an attorney or legal clinic review your paperwork before going further.

Question: How can I get more information regarding arbitrary changes to community bylaws?

Answer: HOAs are governed by various regulations. There are declarations, bylaws and rules. The rules (when the pool will be open) are usually easy to change, but the declaration is virtually impossible to alter because it is the document which describes the property and each of its units.

You may be able to change bylaws, but how? Ask you HOA officers for advice regarding amendments to the bylaws. Ask if a given percentage of unit owners are required to approve changes. Ask if lender approval is required. Then see what state laws require. A local real estate attorney can provide specifics.

Question: I was wondering what the average 2006 real estate return was and what's expected to be in 2007. I look forward to hearing from you at your earliest convenience.

Answer: We know what average recorded sale prices are for given areas, but determining a typical "return" is unknown because one would have to compile when a property was bought, the value of improvements, the value of rents (if any), whether the recorded sale price included discounts and concessions to the buyer, etc. As well, returns which may be attractive in one community may be unattractive in another. Lastly, the fact that Smith made x percent on a property does not mean Jones will do as well.

Question: I've been in the real estate business as an agent for approximately one year. For several months I've noticed active listings which indicate a sub-agent commission of zero percent. I have spoken with the listing agents regarding this and they say that it is what their broker wants put in the listings. Correct me should I go wrong here, but the sub-agent, without a buyer agency agreement, technically represents the listing agent's client. If I represent a potential buyer, and see a zero percent indicated for a sub-agent, what would be my first inclination? Go to the next listing? Maybe. But then I may be doing a disservice to my buyer?

If I do not have a buyer agency agreement with a client, and how common is that, and technically represent the seller, is the seller's agent liable for my actions for what I say or do not say regarding the property? Am I making sense? If so, please help.

Answer: Yes, you are making sense. But there are some issues to clear up.

First, sub-agency is rarely used today precisely because of the liability issues you raise. Is the broker saying the fee will be split with buyer brokers or selling agents but not sub-agents? In other words, perhaps the broker does not want any subagents.

Second, who says buyer brokerage agreements are uncommon? According to a 2006 study by the National Association of Realtors , 44 percent of all buyers had written buyer brokerage agreements. If you have a buyer brokerage agreement you will have a clear agency obligation to a purchaser and will be entitled to compensation regardless of who is selling a property or how. Your next step should be to learn the ins and outs of buyer brokerage -- and to only work with prospects with whom you have written agreements.

Have a real estate question? Send your inquiry to Ask Realty Times . Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style. For comments regarding other Realty Times articles, please contact individual authors by pressing here . For past columns, please press Ask Realty Times .

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.