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Jewish World Review May 15, 2000 /10 Iyar, 5760

Bruce Williams

Bruce Williams
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House is 'worth' what's offered


http://www.jewishworldreview.com -- DEAR BRUCE: We are being transferred and are having a difficult time selling our house. While we have had offers, they are not as high as I would like them to be. We have considered renting the house until the market firms up, but my wife constantly says that you think that under most circumstances this is not a sound idea. Our house is "worth" just over $100,000, but we have only been offered $85,000. We can get $700 a month rent, and the parties that wish to rent it are close friends who we know will not stiff us or destroy our property. -- B.W. Clinton, New Jersey

DEAR B.W.: First of all your house is not worth $100,000. It's worth only $85,000. A property is worth only that amount of money that a willing and able buyer is prepared to pay and a willing and able seller can deliver. While you may feel it's worth $100,000, it's worth $100,000 only when someone offers you that amount.

On an $85,000 home, $700 a month is nowhere near ample. A minimum of $850 a month is where you should start, and I would be more comfortable with $900 to $1,000. While I recognize that you do have an edge with someone that you trust renting your house, long-range property rental is not for amateurs. Further, at the end of the lease period, these renters may wish to move elsewhere, leaving you stuck with long-range ownership.

If it were me, I would take the highest offer and get on with my life.

DEAR READERS: A short time ago I responded to a woman who had inherited $50,000. Her husband wanted her to combine the money with their collective funds, and she wanted to keep it in her own name. I suggested that the money would become joint property.

I am complimented that so many attorneys read the column. I received a deluge of letters from attorneys, the thrust of which was that in most states if the woman were to keep the money completely separate and never commingled, then the law, even in the event of a divorce, would recognize it as her money.

I continue to believe that since her husband's paycheck was "their money," her money should be commingled. However, the advice I gave her was totally inappropriate, and I hope that she is reading this response. Many of you suggested that the correspondent consult with a family lawyer or an estate planning expert. That is very good advice.

My thanks to all of you attorneys as well as lay people who took the time to respond. That's what this is all about. If I make a mistake, I am perfectly agreeable to correcting it. Thank you for correcting me.

DEAR BRUCE: You are against EE Bonds. Please suggest alternatives other than mutual funds. With the current status of the market, we do not want to invest in retirement funds and mutual funds, and certificates of deposit and money market funds are income tax problems. -- W.D South Lake Tahoe, California

DEAR W.D.: You mentioned that the CD's and money market funds are tax problems. I am sure that you recognize that EE Bonds only postpone but do not obviate the payment of taxes.

I am not "against" these bonds; I feel that the amount of interest that is currently being paid does not justify the long-term investment. If you are absolutely opposed to investing in the market, you could do slightly better in Government Bonds, which as of this writing are earning about 6 percent and are exempt from local taxes.

I still believe that a little bit of a risk is justifiable, given the three or four percentage points one can earn over and above bank rates.



Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).

Up

05/12/00: Borrow from Mom and Dad?
05/11/00: Your heirs, your choice
05/09/00: Mutual-fund investigations
05/05/00: Credit cards vs. debit cards
05/04/00: Lawyer are good for something
05/03/00: The binding nature of contracts
05/02/00: You know you are in trouble when ...
05/01/00: Can primary residence be rented out?
04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
04/24/00: Beware of errors in your favor
04/18/00: $10,000 limit on gifts
04/17/00: Invest or repay student loans?
04/13/00: Beware of Internet auctions
04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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