Tag Archives: Real estate Investment

When a Phone Call is Not Enough

7 Mar

MetroBoston Publication Date February 20, 2013
By Attorney George Warshaw

Ms. M, a nice young girl, found an affordable South End Condo. It was her first real estate purchase. Mom even liked it.

Her offer was accepted and she paid a $1,000 deposit. .

The offer contained the usual mortgage clause. She had to submit a written application for a loan by a certain date.  If after making a diligent effort she didn’t get a commitment for financing by a later date she could cancel and get her money back.

Ms. M called a mortgage broker who gave her bad news. The condo didn’t qualify under Fannie Mae guidelines. A minimum percentage of condos had to sold or under agreement to owner-occupants. Since hers was the very first sale in a new development, the building didn’t qualify.

Ms. M asked for her deposit back. The seller refused claiming “a phone call was not enough.”

The offer required she submit a written application for a mortgage and make a diligent effort to obtain a loan. She never submitted a written application and never called any banks that might possibly give her a loan.

Is Ms. M entitled to her money back?

No, the court ruled. A phone call is not a written application and a diligent effort requires more than a phone call. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

Advertisements

Marriage and Real Estate

5 Feb

MetroBoston Publication Date February 5, 2013
By Attorney George Warshaw

State law provides married couples a special form of home ownership protection. It’s referred to as a “tenancy by the entirety.” It’s like a joint tenancy but for married couples.

It’s created by simply stating in the deed, “I grant to Dick and Jane, husband and wife (or being a married couple), as tenants by the entirety, the following property . . . .”

What’s special about it?

Real estate acquired under the heading “tenants by the entirety” is similar to a joint tenancy in one sense: if one person dies the other inherits it automatically. A probate court is not required to pass title to the survivor.

Marital property held this way has two special features: first, a creditor of only one spouse cannot seize and sell the marital home so long as it is the principal residence of the other spouse; and second, neither spouse can eliminate the right of the other to inherit the property by merely giving a deed to a child or an outsider.  

There are several exceptions that may make a visit to a lawyer worthwhile. If you acquired your martial home before February 11, 1980 or were originally deeded your home as joint tenants or tenants in common, consult a real estate lawyer to upgrade your ownership. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

Is it Better to Give than Receive?

17 Jan

MetroBoston Publication Date January 17, 2013
By Attorney George Warshaw

When families get together over the holidays talk often turns to inheriting mom or dad’s house or estate.

Is it better to receive a gift of real estate today or inherit it later? Tax wise, a gift isn’t always the best choice.

When a person dies one’s real estate has to be valued. Let’s say the present market value of the house is $500,000, but mom or dad only paid $100,000 for it.

Give it to your children while you are alive and they are considered to have acquired it at the same price you (mom and dad) paid plus any improvements.

A person who receives a gift steps into the shoes of the giver. If your children acquire the property by gift at the same price or tax basis as mom and dad paid ($100,000) and sell it later for $500,000, they’ve made a profit of $400,000.

If your children inherit it later, on the other hand, the tax law treats it as if your children bought it at its fair market value. Inherit it at $500,000, sell it at $500,000 and they technically made no profit.

Always consult your tax advisor or attorney before gifting real estate. It’s a complicated subject. The above information may not apply you. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

Have Your Property Taxes Gone Up?

16 Jan

MetroBoston Publication Date January 10, 2013
By Attorney George Warshaw

There is no more unpleasant New Year’s surprise than to find a tax bill in your mailbox for your home or condo, especially if your taxes have gone up.

Massachusetts has a confusing way of taxing properties.

First of all, the tax year starts in July, not January (i.e. which the government calls a “fiscal year”). Fiscal year 2013 began last July 1, 2012.

Secondly, most cities and towns issue bills quarterly (Boston, Brookline) while some bill semi-annually (Cambridge, Cape Cod).

Changes in taxes, rates and valuations are announced in the middle of the tax year (January for quarterly taxpayers), not in the beginning (July). One must wait until January to find out what the taxes should have been last July.

If that isn’t confusing enough, here’s the tongue twister: any increase or decrease in the value of your property that appears in a January tax bill doesn’t relate to the year in which the bill is issued; it relates to the previous tax year!!!

The value the city puts on your property that appears in the tax bill issued in January 2013 is what the city believes your property was worth on January 1st 2012 – one year ago!

Now try to figure that out!

Are You Eligible for a Property Tax Abatement?

If your home or investment property is being over-assessed by the city you may be eligible for a tax abatement.

Every January, municipalities that have a quarterly payment plan (like Boston) announce new tax rates and new assessed values of homes and investment properties.

If your property was overvalued you can file for an abatement. The question that you must answer in your application is what your property was worth on January 1, 2012 (one year ago). Your real estate broker is often a great resource of information.

Abatement applications in cities and towns that bill quarterly must usually be submitted by February 1st (be sure to check your town). In order to be eligible for an abatement – and this is critical – all property taxes due by February 1st (including any past due) must be paid by that date.

Once an abatement application is submitted, the city or town must accept your valuation, make a compromise or reject it within a specific period of time. Many applications, especially in Boston, are rejected merely because the city runs out of manpower to process all the applications.

If an application is rejected, all is not lost. A property owner still has a right to appeal to the Appellate Tax Board and begin a legal proceeding. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at george.warshaw@warshawlaw.com.

Minimizing Stress in Buying a New Home

18 Oct

MetroBoston Publication Date October 17, 2012
By Attorney George Warshaw

The real estate market has heated up. While prices are not what they once were, prices are moving upwards with many properties selling over the asking price.

With pent up buyer demand comes stress, especially if you are selling your home and buying a new one.

Avoid the two most common mistakes that buyers make.

First, if you are selling and buying a new home don’t try to do both on the same day. Sell on one day and buy the next. There is too much that can go wrong to risk it all on the same day.

Second, don’t choose the busiest day of the week to close on your purchase.


What would happen if the deed doesn’t get recorded that day? You might not be able to move into your new home for several days. If the sellers were counting on the money to buy a new place to live on the same day, what will they do?


All this can be avoided: never choose a Friday, the last day of any month or the day before a holiday for your closing. These are the busiest real estate days. Why take a chance?


Everything happens very quickly in real estate. Take your time – and a deep breath. © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.