Question: Here's the deal: A buyer will purchase a two-family home for $549,000 with 20 percent down. The seller will hold a six-month note for the balance. If the buyer cannot obtain new financing to pay off the seller's loan in six months, the seller gets the property back minus the 20 percent.

Can the buyer sign a deed giving property back to the seller minus the 20 percent if he should fail to obtain financing?

Answer: The proposed arrangement assumes enormous risk for the buyer, risk that is needless. Given that the purchaser has enough cash for 20 percent down, why not just buy the place with financing from a regular lender? That way there's no risk of losing the property in six months if financing cannot be obtained.

The proposed financing is nothing but a six-month balloon note, an inherently bad choice because of its short term. The arrangement itself is essentially an option for the seller to buy back his own property at a discount if certain conditions cannot be met.

I would instantly pass on such an offer given that the market in many areas is filled with sellers offering properties with far better terms. Go no further with this until you have spoken with lenders and local brokers.

Question: I'm an event planner and a broker has asked me to put together open houses on two weekends in December. They want properties to be "entertaining/family friendly" to draw out a lot of prospective buyers. What would you suggest?

Answer: Think about what you would like to see at an open house. For me, the list looks like this:

• I want a licensed real estate professional at the house so my questions about the property can be answered.

• I want my buyer broker to be with me and to be graciously welcomed.

• I want the house to be immaculate.

• I want all junk removed before the home is shown to create a sense of greater space.

• I want pets to be elsewhere, especially those that are large and have lots of teeth and claws.

• I do not want the listing agent to tail me from room to room. It's irritating and limits my ability to have a private conversation.

• I want the property to have curb-appeal, to be inviting.

• I'm okay with bread or cookies baking, even though I know it's hokey and trite.

• A nice fire in the winter is comforting and shows that the fireplace is working.

• I want an attractive package of "leave behinds" to take with me, including all disclosures and a nice description of the property.

• I want to know how to contact the listing agent at the office and via a cell phone.

Question: My boyfriend and I bought a house the end of August 2006 and I moved out 20 days later ... . Drama.

Anyhow, I do not want anything to do with the house. There is no equity, we did not put any money down and we have an 80/20 loan. I want him to sell, he says no. I asked him to refinance and I will pay half of closing, he said no.

I moved back into my apartment and cannot afford to pay any of the mortgage. He is paying it every month and can afford it. Can he sue me for half of the mortgage -- which would be a $1,000 a month -- for as long as he keeps the house and pays for it? I only make $1,300 take home pay a month and half of that is my rent. What if he doesn't sell for another year or two. My name is on everything. If I force the sale of the house we could lose $25,000 on it. I guess that would be split 50/50 with each owing $12,500 in debt. I would rather have that then have my name with a mortgage company owing jointly $262,000 on a house I don't live in, will not claim tax on or anything. What should I do?

Answer: As a start, you need to sit down with the former boyfriend and the two of you need to determine if you both want your credit destroyed. Personal issues must be set aside.

You could sue for partition to force the sale but that would produce both legal bills and a loss for both of you. Be aware that as co-signers you are each fully responsible for any loss, not just half.

If it possible for your ex to refinance on the basis of his own credit? If yes, look for a loan with no up-front cash costs -- the expense of the refinancing is in the form of a bigger loan amount or a slightly higher interest rate. Now, before payments are missed or the property is sold for a loss, is the time to refinance -- if possible.

Another idea is this: Can the house be rented for enough to cover the mortgage, taxes and insurance? If yes, that may be a solution which would allow you both to own the property for a few years and -- hopefully -- in that time the value would increase to a point where you could sell and break even or perhaps make a profit.

If you think about it, what you really have here is a sort of "equity-sharing" arrangement. Since you own 50 percent of the property and he occupies 100 percent, he should be paying rent to you. By making all monthly payments, that's essentially what he is doing. If the value of the property is going up, this may be good for you both.

For specifics, please see a local attorney or legal clinic.

Question: I want to place my home on the market. What's the best way to select an reputable agent?

Answer: I look for the most active and most successful person in the immediate area where I want to buy or sell. I want someone who is experienced and understands that my needs are unique. I want a local broker who knows the community and can tell me why one house sold for a given price while another did not.

Question: Can you suggest a source of information showing how commercial office real estate prices in Anchorage have changed over the past two years or how they are predicted to fare in 2007? I'm primarily referring to class A and B office properties.

Answer: Yes. The first choice is to contact a local broker who specializes in commercial property. The second is to call the Anchorage Economic Development Corporation.

Question: We signed a contract to purchase a home under construction. In the meantime, we sold our primary home (we lived there for 3.5 years) and rented a home for 14 months while we waited for the new home to be completed. During this time, my wife's company transferred us out of state. Instead of getting out of the contract for the new home, we assigned it to another person who purchased the property. We never took possession of the home. We received $177,000 in profit from doing this from the person we assigned the contract to who purchased the home.

My question: Do we need to pay capital gains or any taxes at all on this money?

Answer: You have two events here. First, you lived in your prime residence for two of the past five years. Upon selling you should have reported the sale. There would have been no taxes on the first $500,000 in profits if married and $250,000 if single.

Second, you had a business transaction. You held an asset more than 12 months, thus your $170,000 profit is a long-term capital gain. This must be reported and you'll likely be taxed at 15 percent or $25,500.

For specifics, speak with a CPA, enrolled agent or a tax attorney.

Question: I need some simple advice on renting our home and the related equity options/loans. Can you point me to a adviser who can sit down with this?

Here's what I want to start:

• We have a home with a mortgage and we want to move to a better area with a bigger home.

• I want to keep this smaller home because it would be perfect rental property, and I'm prepared to take on landlordship.

• I want to form a corporation because my plan is to possibly have another rental property in a few years.

• I want to pull the equity out of the home to put into another home.

What are the best financing options? I would like to sit down with someone with, but I'm not sure what type of adviser to call. Investment advisers seem more geared toward stocks but not so much a simple investment like mine.

Answer: If you change the property's title to ownership by a corporation you may have to refinance plus there can be significant transfer tax costs. Thus you should go no further with this until you speak with an attorney and lenders who deal with single-family property investments.

Your questions raise a more general issue, however. Before renting anything it would be best to have a good idea of the local marketplace; how homes are bought, sold and rented; and some landlording basics. You should take a real estate sales course from a local broker, private school or community college. This would give you a lot of information plus prepare you to take the real estate sales exam, if you like. As a licensed salesperson working under the authority of a broker you could then buy a replacement home and reduce your acquisition cost to the extent you earn a commission.

Question: My husband has a home up for sale that is owned by him and his former wife. However, the home isn't selling and she's getting remarried and wants out from under the house. She's willing to "give" the house to him and is only asking to have her name free and clear and off the papers.

Since the local housing market is bad right now we are considering moving into the house. What would you suggest to be the most "cost effective" route to go? Would we have to refinance in order to get her name off the papers?

Answer: The ex-wife is being very helpful here, much to everyone's benefit, and that should be recognized. Since title will change the home may have to be refinanced -- but the good news is that interest rates are very low at this time.

First see if the current lender will continue the loan if there's a title change. Then speak with lenders to see the types of loan products available to you. A local real estate attorney can explain how to change the title at the lowest possible cost -- if the ex-wife's interest can be obtained in exchange for "good consideration" there may not be a transfer tax on the transaction. (This is a counter-intuitive idea since it has an ex-wife giving up title in exchange for love and affection.)

Have a real estate question? Send your inquiry to Ask Realty Times. Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style. For comments regarding other Realty Times articles, please contact individual authors by pressing here. For past columns, please press Ask Realty Times.

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Published: December 1, 2006

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Have a real estate question for Realty Times? Wondering about buying, selling, financing, refinancing or renting? Here's where you can send your question to Peter G. Miller, OurBroker®, a nationally-known columnist, author and reporter. Peter G. Miller has written six books -- including The Common-Sense Mortgage -- a guide with hundreds of thousands of copies in print. Miller was the original creator and host of America Online's Real Estate Center and joined Realty Times in 1998. Send your questions to . Because of the volume of mail received, individual questions cannot be answered privately and not all questions can be used. Published letters may be edited for space and style and all letters become the property of Realty Times upon receipt.