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Who pays title insurance fee?

Question: When we sold our home a year ago, we had to pay the title insurance fee for our buyer. But now we're buying a new home and the salesman says we must pay the title insurance premium. Shouldn't the seller pay?

Answer: There is no uniform rule as to whether the home buyer or seller pays the title insurance premium. For example, in the county where I live it is customary for the buyer to pay for their title insurance. In the adjoining county to the north, the same rule applies. But in the county to the south, the custom is the seller pays for the buyer's title insurance.

However, if you don't want to pay the title insurance premium, in your purchase offer just specify the seller is to pay. If your offer is otherwise acceptable, the seller will probably agree to buy your title insurance, regardless of local custom.

Living trust

Question: For many years while I have been sick, my daughter and her family have taken excellent care of me. She visits me every afternoon. My will specifies when I die my house is to go to her. However, I am worried my son, a lawyer, will challenge the will, as it leaves virtually nothing to him since he rarely keeps in touch although he lives only about 15 miles away.

Is there any way I can deed my house to my daughter now but stay here as long as I want?

Answer: Yes. Please consult your attorney, since there are several alternatives to consider.

In my opinion, the best is to create a living trust, specifying that your daughter is to receive your house. A living trust avoids probate costs and delays and is very difficult to challenge. Also, it provides for automatic conservatorship if you become unable to handle your affairs.

Another possibility is to deed the house to your daughter in trust, but not to become effective until your death. Still another alternative is to deed the house now to your daughter, retaining a life estate until you move out or die.

Making an offer

Question: I have been looking at houses to buy on Sunday afternoons for about three months. Now I feel I am ready to make a purchase offer when I find one I like. Who prepares the offer bid? How long does the seller have to accept? Can the seller change the terms without my approval?

Answer: Congratulations on taking your time buying a home. By inspecting many houses you have become a "neighborhood expert" in the vicinity where you want to buy.

When you find a home you want to buy, the real estate agent showing you the home can usually prepare a written purchase offer. Or, you can make your offer through your own "buyer's agent" who solely represents you. Please be aware the agents holding those Sunday open houses represent the sellers.

Your purchase offer should specify how many days it is valid. If the seller is readily available, 24 hours is usually sufficient. However, if the seller is out of town, two or three days might be necessary for acceptance.

If the seller doesn't accept your purchase offer, the seller can make a counteroffer on terms acceptable to the seller. Counteroffers are very common, so don't be surprised to receive one. If you don't like the terms counteroffered by the seller, then you can make a counter-counteroffer. Or you can forget about buying that house.

Property manager

neglecting duties

Question: When my father died, his will left my mother a life estate in his 18 properties, including the house where I was raised. However, my mother has absolutely no interest in real estate, except the cash flow.

I have offered to manage the properties, but she prefers to hire a property management firm, which is doing a terrible job. When I consult them, they tell me that my mother refuses to approve expenditures for needed maintenance and improvement. As a result, there are many vacancies and the properties have deteriorated badly.

Is there anything I can do to make sure there is something to inherit when my mother, age 86, passes away, even though she is currently in very good health?

Answer: A life estate tenant must maintain the property and not commit "waste." That means that your mother cannot allow the properties to deteriorate. If she does, as the remainderman you can go to court and have her life estate terminated for waste.

I strongly suggest that you consult a real estate attorney to review the situation. Perhaps an accommodation can be reached with your mother to pay her the income but let you manage the properties correctly.

Since you have a very strong interest as the remainderman, you have a greater management incentive than does the current property manager.

Couple's $1 option

to purchase defended

Question: About four years ago my wife and I, after reading your column, signed a five-year lease with option to purchase a house. However, we paid only $1 for the option. Each month we receive a $250 rent credit toward our down payment.

Recently I was discussing this situation with a lawyer friend. She said the $1 option consideration was grossly inadequate and the seller can get out of the option if he wishes. Do you agree?

Answer: No. A $1 consideration for your purchase option is perfectly valid. Your consideration for the purchase option is not only the $1 but your detriment of renting the house for five years plus your reliance on the contract rent credit toward your down payment.

If the landlord gives you any trouble when you exercise your option, hire a real estate attorney but not the one who gave you that bad advice.

Robert J. Bruss is a nationally syndicated columnist on real estate. Write to him in care of the Tribune Media Syndicate, c/o the Times, 435 N Michigan Ave., Suite 400, Chicago, IL 60611. Questions of general interest will be answered in the column.

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