DEAR BOB: Is it true when someone inherits real estate, which was the deceased’s primary residence, the mortgage will be wiped out at the time of death and the property title passes free and clear of all liens? I heard if the property was not the deceased’s principal residence, then the heir has to pay the debts –Rick S.
DEAR RICK: Dream on, my friend! When you inherit real estate, you receive title “subject to” all existing recorded liens and encumbrances against the property.
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That means if you inherit a house that has a first mortgage, a home equity loan, a mechanics’ lien and unpaid property taxes, you must pay all those obligations according to their terms or lose the property by foreclosure or forfeiture.
Real estate inheritances can be wonderful if there is plenty of equity (the difference between the total amount owed and the fair market value of the property). However, if there is little or no equity in the inherited property, you might want to decline that inheritance. For more details, please consult a local real estate attorney.
HOW TO HANDLE A NEIGHBORHOOD NUISANCE
DEAR BOB: We live in a historic area of eight rowhouses located next to each other. The rowhouse next door was purchased by a real estate agent who told the seller and the neighbors he planned to live in the house and rent the back unit (as the previous owner did). Instead, he did not move in. He put seven college students in the house, letting the property deteriorate, allowing the gutters to fall off, and creating an eyesore. He refuses to respond to our phone calls, nor will his real estate brokerage manager reply. What can we do? –Barrett B.
DEAR BARRETT: The situation you describe is legally a “private nuisance” because it affects a small number of adjoining property owners. If necessary, you and your neighbors can bring a legal action to abate the private nuisance.
However, since you’ve tried being nice, it’s time to contact the city “code enforcement officer” (or similar title) to learn if any ordinances are being violated. Often, a city warning letter will accomplish amazing results. For more details, please consult a local real estate attorney before filing a lawsuit to abate that private nuisance.
DON’T BE A CHEAPSKATE TO GET RID OF MORTGAGE INSURANCE
DEAR BOB: I need to get an appraisal from a certified licensed appraiser to prove my loan-to-value ratio is below 80 percent so my PMI (private mortgage insurance) monthly premium can be cancelled. I called my mortgage lender who is affiliated with an appraiser who charges $300. I phoned an appraiser in the yellow pages who wants $325. But I heard some real estate agents, who are also certified licensed appraisers, charge less since this is a one-bedroom condominium. I don’t feel I need to spend $300 to remove an expense my lender has been taking from me for the last five years. I have never been late with payments. Is there a less expensive alternative? –John M.
DEAR JOHN: Don’t be a cheapskate. You didn’t say how much your monthly PMI premium costs, but let’s say it is $50. Presuming you have at least 20 percent equity in your condo so you are eligible to cancel the PMI, if you pay $300 for a professional appraisal to prove to the lender you have at least 20 percent equity, you will earn back that $300 from just six months of PMI premium savings. That’s an easy “no brainer” expense.
The new Robert Bruss special report, “Probate Property Profit Secrets Revealed,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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