Ask Barbara: Was oil tank ever on property? Have it checked out

Question: I’m considering buying a 1950s house on Long Island. There’s a vent pipe from an old oil tank visible on the property next to the base of the home. The current owner maintains the house has always been fueled by gas. She has lived there over 10 years. She cannot produce certification that the tank was removed or abandoned properly. The home inspector could not find evidence of a tank ever having been in the basement or a fill cap anywhere outside. How do I find out if an old oil tank is still there now or if it was removed properly? And if I can’t find proof one way or the other, should this be a deal breaker?

Answer: You don’t want to buy a property where there’s even the smallest chance of an environmental hazard. If you’re serious about the property, get another inspection by a licensed engineer and make it the seller’s problem to resolve it by making it a contingency in the contract of sale. If the seller cannot provide legal documentation about whether an oil tank is or isn’t there, then you can walk away from the deal.

Question: I’m having trouble finding tenants for my Washington, D.C., area rental property. Real estate agents have listed my property, we’re on Craigslist, in The Washington Post and registered with Section 8 in my area. I did the right thing by having a good cash reserve to begin with, but I’m sinking fast having to supplement the rent for the empty apartments. 

Answer: This doesn’t sound like an advertising issue, it sounds like a property issue. Tenants want clean, freshly painted apartments in good condition, with new fixtures and appliances. And rent prices have fallen, so consider offering concessions like a half or full month’s free rent to entice potential renters. When you make an apartment more appealing than all the rest, you’ll more than make up these investments with a group of happy, stable tenants over the long haul.

Question: My wife and I have been ­married for 31 years and have always rented a house. Now we’ve saved enough to buy a nice home with no mortgage. However, some people have advised us to obtain a small mortgage since we may need money for unpredicted home repairs, increases in insurance, electricity, heating, property taxes and other living expenses. They also said we’d be losing the “interest” income you normally collect from savings, which could be used for improving our retirement years. We’ll probably both retire in about six years and will be living on my government pension and our Social Security checks. What would you advise?

Answer: I’d shop around for a home that’s either new or in very good condition to avoid those unforeseen repairs. Find out about any hidden problems or potential problems by getting the house inspected before you sign the contract. Figure out what your income will be once you’ve retired and make sure it will cover your monthly housing expenses of taxes, insurance and utilities. Plus, add a little extra onto your monthly expenses for the first year of living in your new home. I guarantee you’ll need all kinds of tools and accessories that you haven’t thought of — especially since you’re going from an apartment to a house. As for the mortgage issue, you’ll get the accompanying tax benefit while you’re both working if you take out a small, short-term mortgage. Use your retirement date as measurement for the size of the mortgage you take out — you’ll want to have that mortgage paid off by the time you retire. Once you’re on a fixed income, you’ll want to minimize your monthly costs and a mortgage you don’t need should be the first to go!

Question: I am contemplating purchasing a condo in the East Harlem neighborhood of New York City as an investment. Do you think it is a good idea, especially now that the developers are so willing to negotiate?

Answer: Now’s a great time to get a deal on many new condos in New York City. Some sponsors have a lot of unsold units and big loans to pay off and they’re very eager to sell. You can negotiate on price and the closing costs, which are substantial. State and city transfer taxes alone add up to almost 2% of the purchase price, unless you work that into the deal. I will caution you to buy only if you’re looking to hold on to the property for at least five years so you can ride out this bear market. And make sure you know what you can rent the place for so you can cover your costs. As far as Harlem goes, it’s a great place to buy real estate if you can negotiate a bottom-line price that will make your monthly payments less than what you would pay for a rental.

Question:  If a home in Indiana is listed for $169,900, is there a percentage you can take off the price or is it just based on the other, similar houses in the area? I watch you on the “Today” show and thought I remembered you saying there is a percentage that homeowners mark up their property. We started our bid at $155,500. The appraised value in ’08 was $149,900, so how could it have gone up $20,000?

Answer: There are no rules regarding how owners price their home. Your opening offer is a good one and the sellers would be nuts not to counter. It’s unlikely the home’s value has gone up 13% since last year, so it seems to me that the owners have priced their house so they could negotiate with a buyer like you. Don’t forget that you and the seller set the value when you agree on a price. If you’re less than $15,000 apart, just stick to your guns and you should be able to buy it for somewhere between the asking price and your bid.

(This is taken from nydailynews.com)

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