Q&A: Don't try to time the housing market

By Gary M. Singer/Sun Sentinel (MCT)

QUESTION: We are tired of renting and want to buy a home but we are afraid that prices will keep falling. How do we know when it is the right time to dive in?

—Norman

ANSWER: If you are emotionally and financially ready to become a homeowner and feel that you have found your dream home, now is a great time to take advantage of the record low interest rates. You can’t time the bottom of the market, so don’t try. There really are two types of economies: the national economy and your personal economy, and your personal economy matters much more. Don’t worry so much about whether the home declines slightly in value. Just focus on finding a place that you want for your family and that you can afford. Those are the most important long-term considerations. Happy hunting.

Q: We are renting a home. After a month of living here, we have noticed signs of sinkhole damage, which is getting worse week by week. Our renter’s insurance will not cover sinkhole damage. There are the typical “staircase cracks,” the walls are separating from the ceilings and there are cracks on the garage floor and driveway. Are we able to legally get out of our lease?

—Sally

A: Maybe. As with most things in life, it’s a matter of degrees, meaning it will depend on how bad the damage is. Whether it is sinkhole damage, or any other condition that affects the tenant’s ability to live in the property, the first thing to check is to see if the issue is covered by what was agreed to in the lease contract. If it’s not, there are minimum standards set forth in the statutes that address living conditions of rental properties.

I suggest you contact the landlord and share your concerns. In Florida, if the landlord fails to comply with what was promised in the lease, or with the minimum living conditions as set forth in the statutes, the tenant may give the landlord a written seven-day notice to resolve the issue. If the landlord doesn’t, the tenant may terminate the lease agreement and be relieved of further responsibility. Before you do all this, make sure to review the appropriate statute for your jurisdiction.

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Q: I want to leave my house to my son when I pass away. It is my only asset so I don’t want my son to have to probate my last will and testament just to get my house. Someone recommended a living trust, but the attorney I spoke to wanted a small fortune. Do I have any options?

—A.J.

A: Yes. You should seriously consider a life estate, which is much less expensive than a living trust. Owning property as a life estate means that the property is yours as long as you live. When you pass on, the property instantly passes to whom you previously designated. This means that no probate is necessary, and a living trust doesn’t need to be drawn and maintained. The downside to the traditional life estate deed is that once you set forth to whom the property will pass, that interest “vests” in whom you decided, and you can’t change your mind, sell or mortgage the property without that person’s agreement. This can be a desirable result in certain situations, such as to protect an elderly relative from being coerced into deeding the property away to a caretaker.

If you want to set up a life estate, but do not want to lose control of your home, you do have another option: an enhanced life estate, which is commonly called a “Lady Bird deed.” This is basically a life estate where the holder can change her mind and sell or mortgage the property without getting anyone else’s consent. In most cases, this is the type of ownership I recommend to people in your situation.

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ABOUT THE WRITER:

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.