DEAR BOB: I own 50 percent of a property with a partner. In February 2006 we hired an appraiser who valued the property at $295,000. But with the recent change in the local real estate market, only three comparable properties sold nearby in the last six months for an average of $260,000. What would be a fair price to offer to buy out my partner? –Liliana F.
DEAR LILIANA: From your description of the situation, if the recent sales of those nearby properties are comparable to yours, it sounds like a fair buy-out price would be 50 percent of $260,000, minus any debts such as a mortgage or unpaid property taxes. Or you and your partner might want to hire an appraiser to make a new appraisal.
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LOCK IN BARGAIN HOME EQUITY CREDIT LINE INTEREST RATE
DEAR BOB: I have a $30,000 home equity loan, which I use for home improvements. Currently, I am paying 8.5 percent interest and have borrowed $3,800. But I received a mailer from the lender offering to lock in 6.9 percent interest. However, the minimum amount must be $4,000 or more. That will mean my monthly payment will increase. I will soon need another $4,000 to replace the roof. How should I think about this? –Nancy C.
DEAR NANCY: That 6.9 percent interest locked-in rate is much more attractive than the 8.5 percent interest you now pay. Why not borrow the additional $4,000 for the new roof and lock in 6.9 percent interest on the entire amount? That sounds like a bargain for a home equity credit line.
TAX ASSESSOR’S LOT VALUE MIGHT BE TOO HIGH OR TOO LOW
DEAR BOB: About 20 years ago, my husband inherited two Florida lots from his parents. Until the last few years, the market value was around $8,000 to $10,000 each. Since then, their value has increased significantly. We constantly receive solicitations and offers to buy the lots. According to the property tax assessments, each lot is worth around $32,000. But we have never actually seen these lots. Now that college expenses are quickly approaching for our children, we are trying to decide if it would be wise to sell these lots. What is the best way to handle this by long distance? –Melissa H.
DEAR MELISSA: Take the money and run! However, before selling you should visit the lots and talk with local real estate agents who sell similar properties nearby. Or, you might want to hire a local professional appraiser to give you an unbiased answer about their market value.
The local property tax assessor’s valuation might be accurate, based on similar recent nearby lot sales. Or it could be too high or too low.
The situation you describe is not a do-it-yourself sales project. Considering the low value of the lots, paying the customary realty agent 10 percent sales commission for vacant lot sales could be a great investment to get rid of them after you learn their true market value.
The new Robert Bruss special report, “How to Sell Your House or Condo for Top Dollar in a Buyer’s Market,” 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.
(For more information on Bob Bruss publications, visit his
Real Estate Center).