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IF PROPERTY HASN'T SOLD, PRICE IS TOO HIGH

Q: I have a niche home, meaning it has a creek and pond, more than an acre, in an upscale suburb. It has been for sale for going on three years. I wonder if it is being marketed to the right audience. The price is market value, not above or below. The current agent is getting a lot of showings, lots of oohs and ahs, but no buyer. Any thoughts on what else my agent should be doing?

A: You're not going to like my answer, but if a place hasn't sold in three years, it's priced at more than market value. It has to be, because market value is defined as what someone will come forward and pay for property that is widely marketed for a reasonable period of time. Your home sounds delightful, but it's difficult to estimate proper pricing for unusual property. If you really want to sell, you'll have to stop blaming your agents and accept the verdict of the buying public.

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Getting out of a real estate contract

Q: My boyfriend and I recently signed a contract on a house. We put down $3,000. The closing is next month. We just learned a family member is selling their house. We would really like to have it. It's $15,000 less with lower taxes. Is it possible to get out of this agreement? And what, if any, will the consequences be?

A: Supposing you still wanted that first house, how would you feel if the sellers had just received another offer for $15,000 more and decided not to sell to you?

I guess there's always a chance of some "out" in your contract, or perhaps the sellers would agree to let you go if they kept your $3,000. At this point, your real estate lawyer is the one to look over the contract and advise you.

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Learn about owning rentals before buying

Q: I am unemployed and looking to make income renting properties. I have $230,000 in cash and a house paid off worth $150,000. It is being rented at $1,100 a month, that being my only income at the moment. I want to buy more homes to rent. I would like to know the best way to do it. Do I purchase homes using cash, keeping my debt ratio down, or buy using small down payments? If I didn't give enough information to make the assessment, please let me know.

A: You gave enough information to show you're ready to risk your savings on a venture you don't know much about. It's easy for an amateur to get into trouble and lose everything. If you are unemployed on a tiny income, for instance, you won't qualify for mortgage loans, so that answers your question right there. And I wouldn't suggest buying for all cash until you know a lot more about real estate investment. Perhaps a real estate broker who specializes in income properties could put you in touch with a longtime investor who wants help managing properties. That would be a good way to earn a little income and begin to learn the business. And you might find private backing that way.

Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

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