Question: I currently own a single-family home with $100,000 remaining in mortgage. I am now able to pay the mortgage off. However, I really want to make a start and invest in real estate. Am I better off paying off my current mortgage which will save money in interest (7 percent), or should I keep my mortgage and invest that $100,000 as a down payment into another home? If so, that means that I will now have two mortgages, but how else can one invest without borrowing?

Answer: There's no need to make an either/or choice.

First, you need to examine your local market to see if buying a second property is a good option.

Second, would it be best to rent your current home and then buy a second property for use as your personal residence -- this would allow you to get owner-occupant financing.

Third, would make any sense to buy with less down? With this option you might be able to purchase more than one unit.

Fourth, you need to be certain that after purchasing that you have sufficient additional cash for repairs, vacancies and other ownership costs. For specifics, speak with local brokers .

Question: How does foreclosure work? When a person buys a home during pre-foreclosure, the advice is always to make sure that the house has equity. So if the house was bought by someone for $400,000 and there is a $300,000 mortgage balance at the time of default, does that mean I can buy the property for $300,000?

Answer: Foreclosures are a complex subject and rules vary by state. In general terms, if someone defaults on a property it will then be sold at auction. A court will want to assure that the property sells for the highest-possible price to protect the owner. If there is a loan on the property, then the lender will typically make a bid equal to the outstanding loan balance. That means other bidders will have to pay off the loan to get the property. If there are no other bids, then the lender will retain the property as a "REO" -- real estate owned by the lender and available for re-sale.

In this process you have to ask if the home is worth more than the loan. At a time when many homes are bought with little or nothing down, it is possible that the property is worth less than the loan balance after considering repair costs, evicting the owners (if necessary) and changing market conditions -- plus rising loan balances that result from negative amortization.

Foreclosures are not something to be considered lightly. For details, speak with local brokers.

Question: I discovered a leak in the roof of my condo (a roof, incidentally, which is visibly missing many shingles). The management notified the roofer and it was during a conversation with the roofer that a very disturbing fact came to light.

I mentioned that I've been anxiously waiting for a new roof, since some units have had theirs replaced, ours must surely must be on the list. Without hesitation, he abruptly said, "Oh, you won't get one. Your association is broke!" He went on to tell me that he is still owed from the roofs that were replaced.

So now I need to know what steps need to be taken to investigate the associations' past and figure out a way to rectify it. Would hiring a forensic accountant be proper recourse? Do I have that right? If so, how do I even approach the board? I can only imagine that they'll become defensive if I just walk into a meeting and start making accusations.

Answer: Let's logic this out: If the roofer has not been paid for past work and believes the association is out of money, why is he looking at your roof? Is he part of a charitable roofing organization?

There is no "disturbing fact" here. There is reason to speak with the HOA and ask if they have the funds necessary for your repairs and if they have a reserve fund for big-ticket items. All of this information should be available to you during business hours.

Question: What's the best waiting period before selling a home?

Answer: There's no rule. If you need to move, you need to move. However, it usually makes sense to own for at least two years so you can exclude up to $500,000 (if married) or $250,000 (if single) from capital gains taxes.

Question: I've been in Real Estate about two years (still lots to learn) here in northern NJ. I'm moving to another state in the South this summer and need help on how to obtain a license there. I've sent some e-mails to various groups there with no response -- maybe they want to keep the northerners out. How can I learn about licensing in another state?

Answer: Just contact the state regulator. A list can be found at ARELLO.com .

Question: Are closing costs different for vacant land when compared with a residential closing? I just sold some vacant land for cash and don't want to get into to many closing fees?

Answer: Many closing costs -- such as transfer taxes, title search, etc. -- are the same whether one is dealing with raw land or a single-family home of equal value.

Moreover, what really matters is not the cost of closing costs, but how a contract is negotiated. In some cases it may be possible to have the other party pay for some or all of the closing expenses.

Question: What is the truth to accepting a referral fee? I am an active licensed real estate agent. Can I be paid directly with a check made personally to me or does if have to go through my broker? If personally, who can I accept it from and is there a cap on how much I can receive?

Answer: The general rule is this: As a real estate salesperson or associate broker you cannot accept any fee or commission from any consumer or from any broker other than your broker.

The logic is that you have no right to contract with the public and all of the work that you do is actually performed under the authority of your broker, thus only the broker can collect a fee.

Question: The selling agent marked "5" in the blank that said I had "___ days" after the signing of the contract to do the home inspection and/or pull the offer. The contract was faxed to me from the seller's agent and I signed it on a Wednesday. Do weekends count? What if one of the days is a holiday? They are saying that it's "calendar" days and that it doesn't matter what days the five days includes.

Answer: The contract likely has a paragraph which defines various terms. A "day" may mean a calendar day or a business day. Sundays and holidays may be excluded.

However, a better approach is to simply say what is meant. Instead of saying five days, however one defines "days," why not just say that the right of the buyer to withdraw from the property in the event of an inspection unsatisfactory to the purchaser shall end at 5 PM local time on Monday, August 28th. Your broker or attorney can provide proper language.

Question: I signed a contract to purchase a new home. I put up $500 earnest money. I was told several times the loan was approved but still in underwriting trying to get a better rate. During this time, I was requested to show reserve monies and signed another home contract. This is when I noticed an increase in loan payments and the addition of insurance and taxes. I opted to pay this myself. I was told they would try and give me the same rates quoted.

I stated that if I am approved I wanted an inspector to come out. I also requested to see the HUD statement one day before closing. I was told this was okay. On the day before closing the lender called me and requested more proof of reserve monies and quoted me rates.

I have since decided not to go through with the purchase. I was contacted several times and I repeatedly informed them I do not wish to go ahead with the purchase of the home. I received a packet from their affiliated title company. Do I have to sign for it or can I return it unopened? What will happen if I do not acknowledge the package?

Answer: The obvious, overt problem here is that you apparently have no buyer broker or attorney, thus your only source of information is the builder from whom you are buying -- your opposite in an adversarial relationship.

Your letter says there was one "contract" and then "another home contract." Why was there a second purchase agreement? How did it differ from the first?

As to the matter of escrow money, if you finance with a loan for 80 percent or more of the purchase price, the lender will require that you make escrow payments to assure that property taxes and insurance are paid.

It is not possible to know what your liabilities might be whether you accept or do not accept the title company package. Before going further, please contact a legal clinic or attorney and show them such paperwork as you have. Your contract will determine your obligations, but the betting here is that a contract from a builder will favor, ta da, the builder at every point in the agreement.

Question: I'm selling my home for $129,500. Here in Georgia you can still get a very nice home under $200,000. Imagine that! Anyway, I received an offer for $129,000. That's fine, but this particular person needs $4,500 in closing costs. She's a school teacher, so I'm willing to help a bit. I advised her not to get a broker involved on her end, but she did. Of course the broker wants a fee. Can I counter? The buyer and the broker are related.

Answer: As long as it is properly disclosed, it does not matter that the buyer and the broker are related.

By asking you to pay a brokerage fee the purchaser is essentially making a counter-offer. Her offer is not $129,000 with $4,500 for closing costs. It is $129,000 with $4,500 for closing costs and now the expense of the broker.

You can accept the buyer's offer, reject it or make your own counter-offer. For specifics, why not sit down with an attorney or legal clinic?

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