KASS: Another response to a buyer

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Q: Your article is a good one, but there are a few minor inaccuracies. First, there is another response to a buyer’s bid, and that is, no response. This usually means that the offer expires because most realtors will only give the seller & listing agent 24-48 hours to respond. Second, a mortgage contingency is not a requirement. There are many cash buyers out there that do not require this contingency, which makes the offer more attractive to the seller. Third, in my experience, realtors do not encourage buyers to put down 10%. A conventional mortgage in my state only required 5% total down, and some of that normally follows the home inspection & subsequent negotiations. So 3% to start is sufficient for most deals. Another important part of the contract is the clause which identifies when your earnest money is refunded should the deal fall through. In our state, our contracts specify 180 days unless you change it. That means that a buyer may wait 6 months before they can bid on another house if that money is needed to do so. I usually change it to two weeks or 30 days. Thanks for your article. It includes key points for buyers to be aware of. Regards, Judy

A:   Thanks for writing. You are referring to one of my columns where I indicated that when a buyer makes an offer to purchase some property, the seller has three alternatives: (1) accept, (2) reject, or (3) submit a counter.

So in effect, “reject” is basically what you are referring to.

I never said a financing contingency is mandatory. Obviously, if you are paying all cash, or are very certain that you can afford to buy the property, you don’t need such a contingency. But in my opinion, for most buyers – especially first timers – such a contingency is strongly recommended.

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Q:      The president of our condo is a known felon. Convicted of 18 counts of racketeering, kickbacks, money laundering, and tax evasion, he leads the Board, but has been prohibited from check signing. We are still concerned, especially since he is lobbying in our town to become President of a Business/Homeowners’ liaison to our Chamber of Commerce.           Are there regulations in place to prohibit his Board leadership? Should the Chamber be informed of his past and prison tenure? Can you give some guidance to us? With his past, we are very concerned and want the facts known, without fear of retiliation. Georgeann.

A:   Yes, the regulations are spelled out clearly in your legal documents, most likely the Bylaws. But first, I would immediately retain a local real estate attorney to guide you through the process.

Specifically, and in the great majority of associations, the members elect the board of directors and the board elects the various officers.

The board does not have the right to throw that board member off the board, but the board does have the right to take away the Presidency and elect someone else.

Every bylaw also contains provisions as to how to throw the rascals off the board; only the membership can do that. You may seriously want to consider mounting a campaign to make sure that he is removed from the board as well.

Talk with the attorney whether you should alert the Chamber about this person. I have serious reservations.

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Q:   My husband is seriously in debt and the IRS is threatening to foreclose on our house. The house is in both our names and tenants by the entirety. Will we lose the house? Sara.

A:   A number of recent court cases have addressed this and similar issues. For example, a federal court that covers South Dakota recently held that the IRS can definitely foreclose on jointly held property. However, there were two caveats: (1) the IRS needs to get federal court approval before selling the property and (2) the non-delinquent spouse must receive his/her share of the sales proceeds.

The requirement to get court approval gives the innocent spouse some relief, but that spouse should immediately retain legal counsel to make sure his/her assets are protected.