Q & A with Dottie Herman

---

Q1 - I recently went to contract on April 27th to ensure that I would receive the first time homebuyer tax credit--if something goes wrong with my transaction and we can't close by June 30th to ensure we receive those funds, can we back out of our transaction?
       
A - Unless you have specific language in your purchase contract that the seller has agreed to then the answer would be no. The tax credit is for your benefit and really has no bearing on the seller's obligations to you.

---

Q2 - My wife and I are interested in purchasing a home- we thought the asking price was a bit too high, but the seller instead of coming down in price wants to buy down our mortgage rate? What's the difference? Does that help us as much as if they decreased their sale price? We are just confused as how to proceed.  

A - This is very common and may actually be a real benefit to you. The seller is looking to give a concession to you that is less than the amount you may want to reduce the purchase price. In today's low rate environment you can see the difference over time in your mortgage payment with lower payments and much less interest over the life of the loan. If you plan to be in the home for more than 5 years you can truly do well. The other option is to have the seller pay some or all of your closing costs.  Lenders permit the seller to pay your expenses to an amount equal to 3% to 6% of the purchase price, depending on the amount of your down payment. So explore this option and work through the numbers to see what works best for you.

---

Q3 - My daughter recently got divorced and wants to purchase a property in Manhattan. She has a decent down payment and secure job; however, I need to give her some money toward her transaction. Do I have to gift her the money?  Is it taxable?
      
A - You are permitted to help your daughter with a gift of funds to help her make the purchase. The gift is subject to tax laws and there but there are annual limits as to how much you may give without having to pay taxes. If the amount is higher than the limits, consider giving her a loan and forgiving a part of it each year as a gift. But be sure you check with your accountant and the mortgage lender first to make sure you proceed properly. 

---

Q4 - I am trying to sell my home, it has been on the market for 3 weeks, however, there are about 16 other homes in my neighborhood that are for sale. How do I make sure mine is priced competitively and a good value so it sells before the others?

A - If you are trying to do it on your own, you are going to have a difficult time getting it right.  An experienced real estate agent who knows your community can provide a comparable market analysis for you.  This analysis would reveal, in a systematic way, the pricing of the other 16 homes.  Based on the data within the report, which takes into account the condition of the other homes, their age, sizes and other factors as well, an agent can give you a solid estimate of where your home should be priced.  If you are presently not working with an agent, I would be happy to recommend some for you to contact.

---

If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.

---