Your Questions About Real Estate

Laura asks…

Is it illegal, in TX, to write a real estate sale contract if you are not a licensed agent or owner?

Is it legal, in Texas, for a person who is not a real estate agent or the owner to write a contract for the sale or lease of real property, building, home, etc. I am aware of a person who is neither owner or a licensed real estate agent who has prepared a lease agreement and the wording in the contract has caused the Leasee loss of money and many problems. There is one requirement to be fulfilled by the Lessor that hasn’t been fulfilled. Unfortunately, there is not a time factor for this requirement to be completed but from other wording in the contract it could be considered a “contract by assumption”. This is a matter that is curcial for a friend and I would GREATLY appreciate and answer as soon as possible. Thank you, jam2735@yahoo.com

The Expert answers:

You cannot practice real estate without a license!!! This means anyone who is an unlicensed individual who sells a home, no matter who it’s for/to, for a commission. If you don’t have your licnese, and act as an agent, then you can/will be fined by the Real Estate Commission & LLR. The penalties vary from state to state.

You wouldn’t practice law or medicine without a license,… Same thing with real estate!

Donald asks…

I need to know the best website for finding land for sale (real estate) ?

I found one website but all its listing is lots. I need several acres for sale.

The Expert answers:

Www.realtor.com

realtor.sailor

Lizzie asks…

When calculating square feet of space in a home for a real estate sale…?

would I need to include the space taken up by closets, cabinets, bathtubs, stove, etc.?

The Expert answers:

Dilbert is right. One of the issues with looking at or comparing square footage is the “usable” issue. Older houses may have less square footage but many newer homes, despite large appearance, are not as roomy. Two story foyers, large “soaking tubs” in bathrooms, walk-in closets all count into the square footage but you lose floor space.

Richard asks…

If you made $15M (gross) from a real-estate sale in NYC using both an attorney and broker, what would you net?

And, figuring that you wanted to live off the money from the sale for the rest of your life, have money to support your family, and leave bunches of it for your family after you pass, how would you invest it? (Serious and legal answers only, please.)

Thanks!
When I say “live off the money,” I’m expecting appx. $200K/yr net income w/o messing with the principal too much.
As you can tell from the question, I’m out of my league here…but I’ll try to give some additional information that might answer “Boston’s” questions.

The building (residential) has been in my family for at least 80 years and, therefore, coming up with an actual purchase price for it is very difficult (but let’s assume that it was $0).

Improvements have been made over time to keep it in code but no major modifications have been made (no new elevators, etc).

I have no idea what a “cost basis” is…

I have no idea what the depreciation would be (but it is a residential rental property with 20 units)…

Regarding the investment income, I’m looking at an 80/20 split between low-risk/high-risk allowing for an “interest-based” income of $200k/yr.

“Bunches” would be as much of the principal as possible (a.k.a. living off the interest).

Does this make my question less “defective?”

Thanks for the answers!

The Expert answers:

Figure 6% of the sale price to the brokers (not 6% of the gross profit but 6% of the sales price) which you can probably negotiate down since the sales price is clearly very high. Just a few % of the sales price for other fees – mostly taxes. I’ll bet you can get out of the deal paying maybe 6-8% of the sales price (but I have no idea what NYC taxes run so I’m not really sure how that would affect the transaction).

I’d invest the money is a diversified group of well performing mutual funds. That should easily set you up for life assuming you live within your means (but alas your children will probably blow whatever is left – the downside of being rich I guess).

George asks…

Looking for Advice on Real Estate Sale?

I own a home that is my primary residance, I also own some Land with a Mobil home which a relitave occupies, I want to move her in with me and sell the land. Therfore I have the following questions.

1. I understand that if I have lived on this property for 50% of the time I can declair this as a primary residance, i do not have to reinvest the money or declair this as income What type of documentaion do you need to prove this.

2. If the above didnt work out and I had to take the total amount of money from the sale, what are my options, and tax responsibilitys

3. Lets use 500K for a round nubmer and tell me what you would do with the money inorder to create income!

The Expert answers:

Disclaimer: Consult your tax advisor

That said, if you lived on the land/in the mobile for 2 of the last 5 years as your primary residence, you might be entitled to the first $250k if single/$500k if married of profit without paying capital gains.

If you didn’t live there in the last five years, you probably need to trade into something to defer capital gains taxes. Keep in mind that capital gains run around 20% of the profit and 80% of something is better than 0% of nothing.

Any investment that you do with the sales proceeds should provide you income or equity appreciation as well as tax benefits.

You could put your money into commercial or residential real estate, land (like a mobile home park), hotels, motels or whatever. Just perform your due diligence and work with licensed professionals.

Betty asks…

We have had a real estate sale pending for nearly 3 months. The buyer was preapproved, but can’t get financed

Help. We were told that the buyer of our home was preapproved before we agreed to a contract with her. After giving extensions for more time to buyer & 2 1/2 months the home is not financed. What recourse do we have? This is costing us lots of time & money as we vacated the home when we were told it would close by the end of May. Is our only recourse to file suit?

The Expert answers:

The buyers agent (or buyer themselves) and whoever preapproved them; was overly aggressive and thought the buyer could swing the financing but was wrong. Assuming the contract is contingent on the buyer getting financing and they didn’t outright lie to you in some way, you can’t really sue (I mean they would buy it if they could).

I suggest you cut your losses and cancel the contract and relist the house (you will have to give the buyer their deposit back – assuming the contract was contingent on them getting financing).

You can tell the buyer that if they can come up with financing before you resell the house to someone else then you’d be glad to take another contract from them, but if they have failed for 2.5 months this seems really unlikely. Time to cut your losses and look for someone else.

Sorry, I know thats not what you wanted to hear but I don’t know what better choice you might have.

PS – If this buyer does come back and say they now have financing this time it will work out (we’ve all heard that one before), I would not sign a new contract with them unless they put down a large completely non-refundable deposit that covers 1-2 months of your holding costs. This money is not lost to them as they would get it back at closing (applied to reduce their closing costs) but if they can’t close for whatever reason you can keep this money. Also make sure you (or your agent) holds this money not them or their agent.

Charles asks…

In a real estate sale could the person with power of attorney sign their own name for the other.?

When there’s a real estate sale and there is a power of attorney could the person that has power of attorney sign for the other person and can they use their own signature and name in place of the person they have power of attorney over.

The Expert answers:

The power of attorney should include the authority to sell real property. Most states require the power of attorney form be signed, notarized and witnessed in the same manner as a deed if it is used for real property transactions.

Sandra asks…

How to find commercial real estate for sale?

What is the best place to find commercial real estate for sale and foreclosures in commercial real estate?

The Expert answers:

If you want to purchase from a Wholesale Investor, you can go to Action Investor Network at http://www.ActionInvestorNetwork.com

If you want to see them listed by Brokers, you can go to Loopnet at http://www.Loopnet.com

If you want Foreclosure REO home listings, whether commercial or residential, you can go to Foreclosure Home Investors at http://www.ForeclosureHomeInvestors.com

Good Luck!

Mary asks…

What is the best site for looking for real estate sale?

The Expert answers:

It depends in where you are wanting to find property. What state and city are you looking in? Prudential real estate network has a great search engine. My site is for the St Louis area. Www.findrealestatestl.com or www.findhomesinstlouis.com. Out of St louis you can use realtor.com

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