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Can homebuyer force sale at listed price?Dear Bob: A few weeks ago, you had a question from a home buyer who was very upset about an artificially low asking price for a house. When the buyer offered the full asking price (which was a bargain price), then he learned the seller had no intent to accept that low price, which was planned to create a buyer competitive frenzy. Isn’t this procedure illegal fraud or misrepresentation? Couldn’t that buyer force the seller to sell by means of a specific performance lawsuit? — Agnes S. Dear Agnes: Excellent questions. But you won’t like the answers. Fraud is intentional deceit. Misrepresentation is usually negligent. If it’s intentional, it’s fraudulent. However, for fraud and misrepresentation to be legally actionable, the plaintiff must be able to prove monetary damages. In the situation of an artificially low home asking price, proving damages is very difficult. Sellers and their realty agents know this, so they get away with their dirty trick. Thankfully, not all agents are so devious. As for your question about the disappointed buyer suing the seller for specific performance to force a sale, the answer is “no.” The reason is the listing contract is between the home seller and the listing agent. Prospective buyers are not a party to that contract and are not entitled to specific performance of the listing contract. Dear Bob: We own a 245-acre farm. My wife and I live in the farmhouse where we raised three wonderful children. About 10 years ago, one son bought, and now lives on, an adjoining farm (I loaned him the mortgage money). He now rents and farms our property too. My wife is 72. I am 75. We have no desire to move from our farmhouse, which is free-and-clear. But when I looked into those reverse mortgages you often discuss, I learned farms are not eligible. I was considering a reverse mortgage credit line for use in an emergency. Why aren’t farms eligible for reverse mortgages? — Kingsley W. Dear Kingsley: If your farmhouse is on a separate parcel, it can qualify for a reverse mortgage. However, if it is part of your 245-acre farm property, then it is not eligible for a reverse mortgage because that is a combination business and personal residence property. The three major reverse mortgage lenders, FHA, Fannie Mae and Financial Freedom Plan, only loan on principal residences, not farm properties. Unfortunately, if you subdivided your residence and created a separate lot, it probably wouldn’t have much value as a stand-alone rural house. I suggest you forget about a reverse mortgage. If you want a low-cost bank credit line, lots of banks eagerly make these loans. I’ve had good experience on the Internet at www.wellsfargo.com. Give it a try. Dear Bob: Probably in February or March, we expect to list our home for sale, as I will be retiring then. Our plan is to then rent a nice apartment in Florida for a year to see if we can tolerate the summer heat and humidity. If we can, then we’ll buy a small Florida house or condo. If not, we’ll develop “plan B,” which is probably to downsize to a smaller house or condo near our current large home. Our question is should we have our home professionally inspected before listing it for sale, or should we let the buyer hire the inspectors? — Glenn C. Dear Glenn: In my personal experience, I’ve found it’s best to have the home professionally inspected before listing it for sale, including customary special inspections such as for termites, radon, building code compliance, energy efficiency or whatever applies in your area. Then have any recommended repairs performed before listing your home for sale. Most buyers will accept the seller’s professional inspection reports. But others will want to double-check by hiring their own inspectors, at their expense of course. As a seller, I suggest getting your home into tip-top condition after making any necessary repairs. If the buyer’s inspector finds a problem your inspector missed, then you can go back to your inspector. That happened to me with termite damage repairs my inspector missed. He paid for the necessary work, presumably so I wouldn’t report him to the license officials. Dear Bob: Several years ago, we put the title to our major assets, such as our home, into our living trust. So far, it has worked out very well. When we recently refinanced our mortgage to reduce the interest rate, the living trust created no problems. However, we are concerned if we decide to sell our home. Because our home’s title is in our living trust, will we lose our entitlement to that $250,000/$500,000 principal residence tax exemption? — Ed N. Dear Ed: No. Your living trust is just a way to hold title, similar to joint tenancy or tenancy in common. It has no effect on federal income tax benefits, such as the Internal Revenue Code 121 tax exemption. Of course, to qualify for this tax break, you must own and occupy your principal residence an aggregate two of the five years before its sale. For full details, please consult your tax adviser. Dear Bob: Several times you have mentioned mortgage “junk fees,” which borrowers should avoid. How can I get a list of these junk fees? — Melonee C. Dear Melonee: There is no complete list of mortgage lender junk or garbage fees. The reason is lenders are constantly creating new names for these pure-profit charges imposed on unsuspecting home loan borrowers. Examples of junk or garbage fees include administration fee, warehouse fee, processing fee, underwriting fee, loan review fee, appraisal review fee and (when the lender runs out of names) a miscellaneous fee. Most lenders either charge a loan fee, such as a one-point loan fee, or they slightly raise the loan interest rate by one-eighth or even one-fourth percent to cover their expenses and profit. That’s fine. But question any fees that were not disclosed up-front on your lender’s good faith estimate of loan charges. Dear Bob: We paid our mortgage broker $500 to lock in our interest rate for 30 days. Although we were ready to close our home purchase, the lender kept stalling. It seems to me a lender should have two or three appraisers lined up to do the appraisal within 30 days. But the lender said our lock-in expired and we had to pay a one-fourth percent higher interest rate because our “loan package,” including the appraisal, wasn’t completed within the 30 days. Do we have any recourse against our dishonest lender? — Ben L. Dear Ben: You are correct that there is no valid excuse for a mortgage lender not obtaining a home appraisal within 30 days. You were ripped off for $500. Just between us, I wouldn’t be surprised if your mortgage broker pocketed that $500 and never locked in your low interest rate with an actual lender. Unfortunately, you have no easy and profitable recourse. Your mortgage broker knows that. You should demand a refund of your $500 lock-in fee within 10 business days. However, don’t threaten or tell your loan broker what you plan to do if you don’t receive a prompt refund. If the mortgage broker doesn’t refund the $500, you can (a) sue the mortgage broker for a $500 breach of contract refund in local small claims court and/or (b) file a complaint with the mortgage broker’s license regulator. Dear Bob: Over a year ago, I was having trouble selling my house because it is not in a good neighborhood. Then I read your article about how a lease-option can “sell” virtually any property. Following your instructions, I quickly found a tenant-buyer. However, she was not able to buy during her one-year option period. Now the house has substantially gone up in market value. When I renewed her lease-option for another year, I raised the option price. My buyer-tenant wasn’t happy and threatened to sue me. Does she have any recourse? — Humphrey T. Dear Humphrey: No. If your tenant-buyer didn’t exercise her purchase option within 12 months, the option expired. You had no obligation to renew the lease-option. When you offered to renew for another year, but at an increased option purchase price, you were perfectly within your legal rights. The tenant-buyer could have avoided an increased option price by purchasing the home within her initial option period. The new Robert Bruss special report “How to Avoid Being Ripped-Off By Your Mortgage Lender” is available for $4 from Robert Bruss, 251 Park Rd., Burlingame, CA 94010 or by credit card at (800) 736-1736 or www.bobbruss.com. Questions for this column may be mailed to the above address or e-mailed to robertjbruss@aol.com. 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