By Lew Sichelman WASHINGTON (MarketWatch) — Question: We have a convicted heroin addict living in our neighborhood. The house next door to the heroin house is about to be put on the market. Is the owner/seller obligated to disclose the presence of this criminal? —C.L., Pleasanton, Calif. /conga/personal-finance/real_estate_seo.html 202607 Answer: Interesting you should ask. Agents in Saskatchewan are pushing for a drug house registry so that they can be aware of a house’s past before they are showing it to prospective buyers. While the rules of disclosure are more concrete about the property being sold, they are less clear about a condition on a property or a resident in proximity to it. State law governs the specifics, so check with your state real-estate commission or the agency which regulates the real-estate sector, which in your case would be the California Department of Real Estate in Sacramento. If the house is listed by a member of the National Association of Realtors, the Realtor Code of Ethics would apply. According to Bruce Aydt, an expert on the code who is senior vice president and general counsel at Prudential Alliance Realtors in St. Louis, Mo., members must avoid exaggeration, misrepresentation or concealment of pertinent facts about the property or the transaction. “In general, if the condition on or near the property would affect the value and desirability of the property being sold, the best course would be to disclose the condition,” says Aydt, who writes a column on ethics that appears in NAR’s monthly magazine. “If asked, the owner/seller and/or broker certainly cannot lie or be deceptive about answering the question.” If the seller is going it alone, or he lists with a non-Realtor, the seller will have to look to state law for guidance. And absent a law, I suppose the seller and his agent can keep their mouths shut and hope the buyer never finds out about his potential neighbor or doesn’t care. Question: I am 76 with a house worth about $500,000 and a mortgage of $65,000. I hate to spend $20,000 in fees to obtain a reverse mortgage, as it is unlikely my home will ever be worth less than I receive in proceeds from such a loan. I need additional funds, but I don’t know if I’m ready to sell just yet. Can you suggest some alternatives? —M.M. Answer: You question is very timely because NCOA, the National Council on Aging, has just created a new online educational tool that is ideal for older persons like yourself who are looking for answers about how to make the most of what is usually their largest financial asset. HomeEquityAdvisor.org is a user-friendly site that is designed to help older middle and low-income owners make sound decisions when using their home equity to achieve a wide range of financial goals. The tool helps when considering an immediate financial challenge or when planning ahead for the future. It will help you decide whether to sell outright, use the property as a basis for loans such as a reverse mortgage and, above all, find respected and unbiased information. Once you are at the site, you can use the “Quick Check” feature to define what help you might need or want. You can specify your situation as “at risk of foreclosure” or as “preparing for unplanned expenses” to view a range of possible solutions. Based on your answers, you will receive an individualized report offering information, further tools and consumer advice on how to protect the value of your property. Quick Check also helps seniors determine the consequences of using their home equity in their retirement, assess timing and retirement issues, explore options such as renting a room to earn extra income, learn how to avoid home-equity scams, and take family, health, and financial considerations into account in their decision. HomeEquityAdvisor is operated by NCOA thanks to a grant from the Financial Industry Regulatory Authority’s Investor Education Foundation. NCOA is a non-profit service and advocacy organization with a mission to improve the lives of millions of older adults, especially those who are vulnerable and disadvantaged.
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