Q: My home's basement has had two major floods in the five years I've owned it. My real-estate agent and the inspector she recommended never disclosed the house was flood prone. I did notice 2-inch water marks on the doors just after I moved in, but I didn't think anything of them. What are my rights now?

Q: I'm in deep distress on my mortgage and need to sell. I've found buyers from my old country, but they don't have green cards. Do they need to have green cards to buy a house?

Q: A nice Eastside home near mine was torn down, presumably to be replaced by a fancy house. I find it immensely sad to see the destruction of perfectly good resources. When I sell my home, can I require that the buyer not tear it down for at least 10 years?

Q: I found my real-estate agent through a Web site. Now that we've found a house and I've signed a contract with the seller, my agent is ignoring my e-mails and phone calls regarding follow-up details. Who should I contact if I still cannot find her?

Q: I'm retired and must sell my home and move to a warmer climate for health reasons. But my real-estate agent says the market is slow because there are so many for-sale homes. He says many owners don't really need to sell. This is making it hard for those of us who do. What can be done to discourage these sellers?

Q: We've relocated to Seattle, but have had no success selling our two waterfront houses near Houston. Is it reasonable to try to trade them instead for a home in Seattle?

Q: After we signed a lease-option agreement to buy a house we discovered the seller never obtained a permit to add a third bedroom and that room's construction is so poor a wall moves when pushed. We're afraid this could doom an inspection and sale. Do we have any options other than walking away?

With home sales sluggish, many sellers are contributing cash toward the buyer's down payment as a way to land a sale. That's a win-win, right?

The sluggishness of early 2008 home sales should abate later in the year as mortgages become somewhat easier to get, Charles McMillan, president-elect of the National Association of Realtors said Thursday.

Q: My husband and I recently found a home for sale that also was in foreclosure. It was perfect for raising our special-needs child. On the day we made a full-price offer we were told the owners had decided to file for bankruptcy, which meant we wouldn't get the house. We're very disappointed. How does the bankruptcy process work in regards to a home asset?

Q: A buyer's agent claims to represent the buyer, but she is paid by the seller. Who does the "buyer's agent" really represent?

Q: When housing ads or descriptions talk about square feet of space, are they talking about net (actual inside room dimensions added together) or gross dimensions (based on the outside dimensions of a house)? Due to thickness of interior and exterior walls, the difference can be substantial.

Q: Do you have any advice for someone poised to purchase a second home to use as an occasional rental in Chelan County near Stevens Pass? I'm planning on buying this property as a nightly vacation rental for Puget Sound families and don't have a good way to track that area's price changes.

Q: After I referred friends to my real-estate agent, I decided I wasn't happy with her services because she refused to make an offer on a house I wanted. She said it was too low. So I contacted another agent who helped me buy a house. The first agent heard about this and left a voicemail saying that if I didn't call her back she'd tell the FBI and the Department of Homeland Security that my friends are here illegally. Like me they're Hispanic and no one's illegal. Who can I complain to?

Q: What's the best way for a private investor to find out which houses are in foreclosure and when they're going to be sold? Is there a list you can buy? What about the foreclosure companies advertised online? Is that a good way to proceed?

Q: My girlfriend is considering buying a duplex or something similar as an investment. What are the pros and cons of doing this? Are there Web sites or other resources specifically for finding small investment properties? How about resources for becoming a landlord?

Q: What's the average time to buy a foreclosure property? I understand it can take as much as a few months.

Q: Generally speaking, what is the state of the real estate market in Central Washington, particularly the Roslyn/Cle Elum area? My husband and I own a home there on the Yakima River. We have a renter in there now, but are considering putting the house on the market. We live in Hawaii, however, and are too far removed to have a good sense of how that market is fairing, considering the national headlines on real estate? Also, what, if any, impact do you think the Suncadia development will have on real estate prices in that area? In the short term? In the long term?

Q: A few months ago I helped my son buy a condo in a small, newly refurbished building. He got it for about $10,000 off the asking price, and the developer paid his closing costs. A month later, the developer sold an identical unit on the same floor for $30,000 off. This seems quite unfair to my son. What can he do about it? Shouldn't the developer have disclosed he was desperate to sell?

Q: There's a condo in foreclosure that I'd like to buy. It's been abandoned by its owner, who owes the mortgage company $310,000. But I'm concerned because there are two IRS liens against the property, plus another lien for unpaid property taxes. Could I inherit these liens?

Q: We'd like to buy our first house and have found one in the North Seattle neighborhood we like. But it's at the top of our budget. Should we buy now or wait for prices to fall?

Q: My family is considering moving from a small town in Indiana to Seattle, but we don't want to live right in the city. We'd like to live less than an hour from downtown Seattle in a quiet, rural area preferably close to trails. We also want to be able to find a four- or five-bedroom home for around $150,000 or less. Which area outside Seattle would be a match for us?

Q: In searching Seattle homes for sale for the past six months, we've noticed that all new homes have the garages in front. Three big cavities with sliding doors! Ugh! We don't want our garage to be the first thing you see when driving up to our home, but we can't find a new development that has any with the garage at the back or on the side. Can you steer me toward a builder who isn't afflicted with garage-up-front-itis?

Q: After I bought my house in Ballard, I received periodic advertisements from the collaborating agent on the deal. I figured this agent took my information from the purchase-and-sale agreement, but what can I say since the sale is recorded publicly?

Than about a year later, the agent sent me advertising about a home for sale. Clearly, the agent stole my private information and entered it in their database. I complained and the agent offered to remove me. I'm happy about that, but I'm still hopping mad that this agent has a policy of stealing people's data without their permission. Is there somewhere I can report this activity to?

Q: My wife inherited an interest in her parents' North Carolina property (including an uninsured warehouse). No one told us the title had passed to her; when we realized it we decided we didn't want the asset or the liability. However, under that state's law she was not entitled to a copy of the will, nor could she disclaim the inheritance and have title pass on to her siblings who wanted the property. The only solution was for her to sign a quit-claim deed. Is transferring property this way considered a gift for tax purposes, and if so will it cost us money? In Washington could someone inherit property and not know it in time to refuse it?

Q: I'd like to buy a home, to use as a rental, that's gone through foreclosure and is now owned by the bank. Is it possible to buy it using a line of credit on my primary residence? I've heard you have to pay all cash for a foreclosure property.

Q: In attempting to sell my home, a fixer, I spoke to various Realtors. They told me that because of the home's unusual layout, very large size and the amount of space devoted to a basement/workshop area, the home's potential is hard to estimate.

Then we put our house on the market for a few months and did not get a sale, though we dropped the price significantly twice. How can I determine a reasonable price?

Q: My daughter recently went through a divorce. Everything they had was listed and each item was given a value with the decree declaring which items were given to her and which items went to her former husband.

One of the items going to her was their house valued at $500,000. The original purchase price was about $250,000. If she later sells the house, will the fact that she gave up items of equal value to her ex increase the home's tax-basis value for capital-gains tax purposes?

Q: My significant other and I are about to buy a home. I'm putting up the whole down payment, and we'll split the mortgage payments evenly. Can I have a deed of trust or mortgage drawn up and filed of record as a second position lien against this property, whereby I'm the grantor and he's the grantee, and he can pay me back his half of the down payment on a monthly basis? Would that make sense, and help protect my investment? For example, if we split up and had to sell, would this help ensure I'd at least get my down payment back?

A: Seattle attorney Dan Wershow, of Wershow & Ritter, says your plan will protect you -- up to a point. If you and your S.O. were to break up and sell your home, the escrow company handling the transaction will pay off the mortgage and you'll have a lien on the home's profit equal to what's still owed you for the down payment. That lien would get paid off, too.

(Perhaps a trickier question is whether, if your S.O. stopped paying altogether you'd want to foreclose on the lien. In doing so you'd also be foreclosing on your own home.)

But a lien is not enough to really protect you, Wershow says. For that you need a written domestic partnership agreement that "talks about who is going to do what financially and what happens if they don't."

This is not the same as domestic partnership status conferred by some governments and employers, which provides medical and other benefits. Rather the partnership agreement is a private contract the two of you tailor to your own situation.

Ideally you'd write it with the help of a lawyer because there can be various legal and tax ramifications you need to know about. Otherwise the document could inadvertently harm rather than help you.

Among the things the agreement can do: address what happens to your home and other joint assets should you break up, and provide a mechanism for valuing, liquidating and distributing them.

Q: While my house was vacant and for-sale an intruder entered and left spots on the new beige carpet that could not be removed. The police investigation concluded that the trespasser likely entered from an unlocked patio door. The lock on the front door's lockbox installed by my Realtor indicated that half a dozen real-estate agents accessed the property between my previous visit, when there was no damage, and the visit when I found the damage. Soon after, I got an offer for $2,000 less than my asking price. (I accepted it.) I think the offer was low because of the carpet damage. Can any of the agents who were in the house and may have left the door unlocked be held liable?

A: Your dilemma is twofold, says attorney Lawrence Glosser, with the Seattle firm of Ahlers & Cressman. First you have to find out who left the door unlocked, then you have to prove it.

If you want to go to the effort, you could call each of the six agents and ask if they noticed any damage. If one did, you might surmise that the agent who was in the house just prior was the one who left a door unlocked.

But what if that agent denies it and suggests that perhaps someone had a key. Can you prove that no one else, a worker for example, could have left the door unlocked?

Further, you'd have to get the buyer to confirm the carpet's condition was the reason for the $2,000 discount -- not something else.

If you think you can prove all this, you could take the agent you think is responsible to small claims court.

"Maybe the lesson for readers is to check their insurance provisions with regard to having a vacant house and what their deductibles are," Glosser suggests.

Q: Do we pay tax on selling an inherited property (in my case a house)? If we do, what is the tax rate?

A: As attorneys like to say, that depends. Only this time it is certified public accountant Robert Christopfel of Seattle saying it.

Here's the way he breaks down the issue.

The value of the inherited property is its fair market value upon the death of its owner. So if you inherit Uncle Bruce's house, and it's worth $500,000 on the day he died, that's its basis value for your tax purposes no matter whether you take possession two weeks or two years later.

You don't pay taxes on the basis value. But you may have to pay them on any profit (also called gain) you realize when you sell the property.

"If you sell it at a gain, even if it's just two weeks after you inherit the property, the gain is treated as a long-term capital gain," Christopfel says. Fifteen percent currently is the highest tax rate on long-term capital gain.

So let's say you keep Uncle Bruce's house for two years and use it as a rental. Then you sell it for $550,000. You could potentially owe 15 percent of the $50,000 profit you realize. Or less if you use a real-estate agent; selling costs can be deducted from that $50,000.

But what if you move into Bruce's old home instead? In that case you may be eligible for the capital-gains exemption given to owners when they sell their primary residence. That's $250,000 for single owners, $500,000 for joint owners so long as they've lived in the home two of the previous five years when they sell it.

Under this scenario, you obviously would owe no capital gains tax on your $50,000 profit.

There's more. Christopfel says the government allows exemptions to the two-year rule for sellers moving because of medically documented health conditions or job relocation.

In those cases sellers get pro-rated exemptions based on the amount of time in residence. So say you move into Uncle Bruce's home, but live there just 15 months before selling. Then you'd enjoy 15/24ths of the exemption (the 24 referring to 24 months or two years).

Q: I may buy my first home (probably a condominium) in the next few months. However I'm concerned that prices could fall after I buy and I could lose money. Will mortgage insurance protect me in case my home eventually is worth less than I pay for it?

A: Karl Newman, president of the nonprofit Northwest Insurance Council, an industry group, says he knows of no mortgage-related insurance homebuyers can purchase that would protect them against "diminished value." And if it were to exist, he expects the premiums would be expensive.

What does exist, and is common, is private mortgage insurance, commonly called PMI. Many first-time buyers purchase PMI because their mortgage lenders require it. That's commonly the case when a borrower makes less than a 20 percent down payment. However PMI doesn't protect the borrower. It protects the lender in case you default on your loan and the lender has to take the property back. That's statistically a greater possibility among borrowers who have little equity to lose. They may choose to walk away if they get in financial difficulty, rather than trying to save their home.

PMI insurance is a mixed blessing: good in that it allows those with slim down payments to own a home, bad in that these premiums can continue for years and add markedly to monthly homeownership costs.

However it's good to remember that the federal Homeowners Protection Act of 1998 requires lenders to cancel PMI once the owners have reached 20 percent equity in their home. There are exceptions to this. Borrowers with blemished credit and those who took out reduced-documentation loans are among them.

LAS VEGAS -- As real estate information has became ever more Web-based, sales agents voiced fears that their jobs would become obsolete.

A new survey by the National Association of Realtors, meeting here this week, has put that fear to rest.

It found that just 12 percent of this year's real-estate transactions were for-sale-by-owner, the same as last year.

Moreover, only 60 percent of those properties involved were sold on the open market. The remainder changed hands among parties who knew each other, such as family members.

The number of FSBO transactions has been declining since 1997, when a record 18 percent of all sales where transacted without a real-estate professional.

LAS VEGAS -- Rich Barton, Zillow's founder and CEO, told the audience at the National Association of Realtors convention here this afternoon that the 2-year old Web site, which attracts 4 million unique visits a month, will continue to push the technology to innovate.

"We're very passionate about our homes. What we're trying to do is bring all that passion into the marketplace. What Zillow wants to be long-term is an online version of the neighborhood newspaper," he explained.

While Zillow never intends to sell houses, its bread and butter is selling ads to firms involved in the real-estate industry, although it does allow real-estate brokers and agents to post some content for free.

Now they can feed their complete listings of homes for sale onto Zillow.

Sometime next year, Barton said, they'll be able to add "virtual sold signs" online so site visitors can easily see which agents sell the most homes in any neighborhood.

Another new feature, aimed at garnering ads for its site, is based on predicting which homes are in flux.

"We believe we can make a good prediction about who's about to move or remodel. That will provide marketing opportunities," Barton said. He didn't give any time frame for adding this feature.

Barton said Zillow plans to become even more interactive. In the future the site will allow visitors to counsel each other about home matters. "Should I paint my house white or yellow? In the future they'll be able to ask others that," he said.

Also on the drawing boards is a feature that would allow people driving through a neighborhood to receive a flow of information about the homes they're passing.

While some real-estate firms already offer a version of this, Zillow's would have data on all homes, not just those for sale.

Zillow is also working on adding information on raw land to its database and is also eyeing the international market.

The owner of a vacation home in Whistler, B.C., Barton said he'd like to replicate Zillow's offerings in Canada. The challenge right now is getting access to the necessary home data. But he sounded confident that eventually the problem could be solved.

LAS VEGAS -- The national speakers at this week's National Association of Realtors annual convention here are all talking in one way or another about the current market downturn. Some are also talking about what can be done to help it rebound.

Lennox Scott gave his perspective on how things are playing out in the Seattle area. He is the CEO of John L. Scott, the real-estate firm founded by his grandfather.

Lennox Scott has worked through many market cycles in the decades he's been in real estate and predicted many months ago that the Seattle market would slow.

So he's not surprised that it has. Nor is he particularly worried about, calling it no more than "an adjustment phase."

Currently there is a five-month supply of for-sale homes within the Seattle city limits, Scott noted. Last year some neighborhoods had a month or less. In South King County there's a six-month supply.

If that inventory sounds high -- and Scott says it's not -- consider this for some perspective. Florida's Palm Beach County north of Miami currently has a 50-month supply of homes for sale. Las Vegas is also in dire straits with a two-year supply.

Both had market forces Seattle never had: runaway homebuilding plus thousands of investors who flooded those markets hoping to get rich quick by buying and flipping houses. When prices in those areas flattened,many simply walked away from their properties.

In Las Vegas, foreclosures and excess for-sale inventory have led to a 13 percent dip in prices. So Scott doesn't see last month's slight decline in year-over-year Seattle prices as worrisome at this point.

Still, things can be done to help buyers and sellers, he said.

Both Fannie Mae, the congressionally chartered company that funds a large share of the nation's mortgages, and the Department of Housing and Urban Development, which offers FHA loans, are trying to get Congress to modernize their programs.

At a seminar here Tuesday, Scott pointedly asked top officials from the two entities why Congress seems to be dithering despite widespread support from Realtors, lenders and others.

He didn't get a straight answer. But he made it clear that increasing loan limits, which both Fannie Mae and FHA are trying to get through Congress, would be a huge help to Seattle buyers.

"The FHA modernization bill to raise loan limits is all to the good," Scott said. In particular it would help borrowers with subprime loans and blemished credit transition into more favorable FHA loans, which they currently can rarely do in Seattle because home values generally exceed FHA loan limits.

Ditto with Fannie Mae. Its upper threshold for loans is $417,000, which means anyone who needs a larger loan -- and in a pricey Puget Sound area many buyers do -- must get a more expensive jumbo loan.

"We want a healthy Fannie Mae," Scott said.

Meantime, he says the current slower market is providing a window of opportunity for Seattle buyers. "After the first of the year we'll get a little momentum boost," he predicted.

LAS VEGAS -- At the National Association of Realtors convention here, the big question on everyone's mind is: When will the real-estate market rebound?

Economist John Tuccillo is predicting the end of 2008 or beginning of 2009 for the nation as a whole.

However the Virginia-based consultant and former NAR chief economist stressed that "there are hundreds of thousands of real-estate markets, so it doesn't matter what the national picture is."

What really matters to buyers and sellers is what's occurring in their own area.

Here's what Tuccillo says they should watch for. It could be as simple as keeping an eye on neighborhood "For Sale" and "Sold" signs.

-- The number of homes on the market. A decrease means more buyers are buying.

-- How long homes stay on the market. Faster turnover is another sign of a market pickup.

- The ratio of sales price to asking price. Disappearing price cuts signal a turnaround.

When the market does rebound, Tuccillo says, it will bring "a tsunami of first-time buyers." They're Gen Y'ers born after 1976.

Larger in numbers than Baby Boomers, Gen Y's will generate tremendous home sales between 2010 and 2015, Tuccillo said.

LAS VEGAS -- The National Association of Realtors' annual convention started with a bang -- literally -- this morning when an old hotel, the Frontier, was imploded nearby sending up a huge plume of dust and making the ground shake.

As chance would have it, that was a decent metaphor for the current state of real estate. The boom is over and the dust is now settling, Lawrence Yun, the NAR's chief economist, told the thousands of real-estate professionals meeting here.

This is the first year since the Great Depression of the 1930s to register a nationwide decline in median home prices, Yun said. His latest numbers put the drop at 1.7 percent. "We're in a time of fear," he said.

For 2008, Yun, who holds a doctorate in economics from the University of Maryland, is predicting a slightly improved sales climate -- if zero percent appreciation can be considered an improvement.

In other words, prices nationally will be flat, Yun said, as buyers react to gloomy housing-industry news by sitting this one out.

But as Yun stressed repeatedly, real estate is intensely local. National trends mean about as much to buyers and sellers in any one city as a national weather forecast would mean to them.

That's why things will be bad in some areas (like Ohio, which has experienced significant job losses) and good in others.

Yun suggested Seattle will continue as one of the bright lights, which it's been this year. Median year-over-year home prices have risen every month save October, when they were down slightly.

But Seattle's strength may go beyond the usual reasons: a strong local economy and good job growth propelling housing demand.

Yun suggested that Seattle may be joining such cities as New York and San Francisco as "superstar cities" whose desirability attracts affluent newcomers who bring the buying power to continue pumping up housing prices.

He conceded that there's no accurate way to get a handle on the number of these buyers, or their wealth. So for now, it's just a theory. But an intriguing one.

Q: We signed a purchase and sales agreement to buy a new home in Redmond and made a $15,000 deposit. The house was supposed to be completed next spring. The builder has just informed us that he is running 4-5 months behind schedule. He gave us an option of opting out and getting our deposit back. With real estate being in soft mode, do you suggest getting out of the contract? Its hard to get a 3-bedroom (1,300-square-foot house) in that area for less than $500,000.

A: I hesitate to suggest what you should do because I don't know enough about the market conditions in the neighborhood where the house is to be built.

If I were in your position, I'd start by asking myself a few questions.
Am I committed to having a new house or would a resale home be acceptable?
Am I committed to moving in next summer?

The answers to those may affect your next move.

King County homebuilders' costs primarily are driven by land, which is expensive because of growing scarcity. But construction costs are climbing, too. So builders may not be in a position to lower their prices next year. Therefore I wouldn't count on them going down. Sometimes builders will cut the price on a model or two, but across-the-board cuts aren't predicted.

It's possible that resale home prices in your area will flatten or dip slightly in the coming months. Buyers who've owned for a number of years likely have enough equity (unless they've done cash-out refinances) to allow them to cut their price and still come out ahead.

I suggest you talk to a couple of real estate agents in your area, including at least one who specializes in new homes. Ask them about market conditions and what they'd be thinking about if they were in your shoes. That should give you enough information to make your decision.

Q: I'm interested in buying a Renton property that has 300 feet of creek footage, which on a FEMA map appears to be outside a flood zone. I'm concerned this could be the result of grandfathering, and the flood zone boundaries could be changed at some time. I want to build on the property in the future, but my understanding is that if the land is redefined as being within the flood plain no building will be permitted. How can I investigate this further?

A: Ryan Ike, a flood-plain specialist for the Federal Emergency Management Agency, says he wishes more people would ask your question before they purchase property that could be flood prone.

That's especially important right now, Ike says, because FEMA has preliminary flood maps that may replace the effective maps currently in use. These new maps have been created for much of Western Washington. Now it's up to local jurisdictions, which are in the process of reviewing them, to decide what happens next, Ike says.

He suggests you contact Renton's Planning/Building/Public Works Department.
"Ask them based on the currently available and the preliminary maps what the city would allow to be built on the property," he suggests.

"There are building options even if it is in a flood plain, but you'll want to make sure you coordinate with the city. They'll help explain all that."

Ike says jurisdictions will hold public hearings before preliminary maps are made permanent, and those hearings will consider how the maps may affect local building regulations. Information on federal flood insurance will be available at during the meetings.

FEMA does not have a Web site with a list of those meetings. Ike suggests people living in or near a flood-prone area, or those considering buying or building there, contact their local government's building department to see when a hearing is being held.

Q: When my common-law partner and I split 20 years ago, we signed a quit claim deed and I got the house. Now I've sold it and am trying to figure out capital gains. Would they be based upon the value when we signed the quit claim? If so, how can I figure out what fair market value was then?

A: Certified public accountant Chris Dowsing, of Morrow Kessler & Dowsing in Seattle, says that when the quit claim was executed, the house was either a gift to you or a sale to you. Knowing which is the key to determining your capital gains obligation.

If it was a gift, you get what's called a carry-over basis, meaning that capital-gains tax is figured based on the home's "basis," loosely defined as the original purchase price.

If instead you bought out your former partner, the calculation is based on the home's new basis -- its market value at the time of the quit claim.

(Other factors, such as subsequent home improvements, also affect the basis.)

Contact an appraiser if you need a historic property valuation for tax purposes.

Additionally, it wouldn't be a bad idea to run your numbers past a tax preparer to make sure you haven't left anything out of the equation.

An Oregon reader, Greg, sent the following comment and questions:

My wife and I live in Portland and are in the middle of a home purchase using a jumbo loan. We have great credit, down payment, no debt etc... Should we be worried like the couple in your article? Have things settled since your article? Who are the solid lenders out there for jumbo loans?

A: I don't think you should be worried about getting a jumbo loan, i.e. a mortgage greater than $417,000. There's definitely jumbo money out there to be had, particularly for buyers like you with strong credit, a healthy down payment and good debt-to-income ratio.

I can't recommend lenders. What I can advise readers is to go with a well-established lender and closely monitor the loan process all the way through so there are no last-minute surprises.

The Federal Trade Commission, which oversees some lenders, has lots of information on its website about getting a loan.

Good luck with your home purchase!

Q: My husband and I are looking into buying land to build on in the future. When we look at real estate listings and the information available from the county, we notice that there are 2-acre parcels assessed at the same value as 5-acre parcels nearby. Is there anyway we can find out why the 2-acre parcel is worth more per acre than the 5-acre parcel? Where can we find enough information in order to make an informed decision about what land to buy?

A: As counties assess real-estate for tax purposes only, it's important to understand that assessed value is not market value, i.e. what buyers pay. (Many county assessors have Web sites; check yours to see if the local assessor explains valuation methods. If not, give your assessor's office a call.)

What's really relevant to you is the fair market value. If you question market prices, the best person to answer your concerns would be a real-estate agent who specializes in land sales in the area you're considering. That person should be able to explain local land pricing to you.

Q: In a recent column, you answered a question about how to find a diligent Realtor. One tip offered was:
Start by looking for a person who specializes in your target neighborhoods. Preferably you'll want a full-time agent (many work part time and do just a few deals a year) who's handled numerous transactions.
I'm interested in your advice on how to do that? Is there a place to find out how many transactions a realtor has conducted within a certain timeframe and geographic location?

A: There's no public database that will give you this information, so the easiest way to find it is to interview the real estate agent and his/her boss. The boss, usually called a broker, manages all the agents in a given office. The brokers know who the full-time agents are and who has expertise in listing homes or selling homes. Often agents specialize in one or the other.

Additionally, most large companies give awards (gold, silver, etc.) for top performers. Agents who have lots of sales will be award winners. Ask smaller firms how they recognize their top agents.

Q: After being outbid on a North Seattle house we really liked, my wife and I have found another. But we're leery of making an offer because we suspect the house has been purposely underpriced in order to generate a bidding war. Is this a widespread tactic?

A: Stories of underpricing homes have been swirling for years now -- so much so that this sales tactic has almost become conventional wisdom. That's particularly true in highly desirable areas where buyers outnumber available homes and bidding wars drive sold prices above asking prices.

The problem, however, is that there's no widespread evidence that this is happening, and real-estate agents usually deny they use this strategy. After all, agents have a fiduciary duty to their sellers to get the best price. If they purposely underprice a home -- and no one bids it up -- they've failed their duty and potentially could be disciplined.

Here's what we do know: In its 2006 annual report, the Northwest Multiple Listing Service reported that King County's single-family homes sold for 81.61 percent of their list price, i.e. the median list price was $520,797 and the median sold price was $425,000.

Snohomish County homes sold for 90.79 percent of list, Pierce for 88.02 percent and Kitsap for 80.03.

Obviously if homes usually sold for more than asking, these percentages would be above 100 percent.

The MLS compiles this ratio annually, thus there's no data available yet for 2007.

But here are some things to think about:

1) While our housing market is stronger than most of the rest of the nation, it's definitely cooling. The number of for-sale homes is growing. That can make sellers nervous about overpricing their homes, fearful that doing so will mean a long market time. So they may underprice slightly instead, particularly if they need a quick sale to get out from under their mortgage payment.

2) Pricing a home is an inexact science. Unless the asking price is significantly lower than that of comparable houses, it's hard to intuit if a home is being underpriced on purpose. Ultimately it's the buyers who tell the sellers if the price is right or not.

3) Market conditions are intensely local and price-driven, so one overall strategy doesn't work. In this slowdown, some neighborhoods remain hot while others have definitely slowed. And even within neighborhoods some price ranges are hot while others aren't.

A market report from Windermere, for example, points out that Ballard/Green Lake sellers have the advantage until house prices reach $700,000. That means a seller could underprice a house there with some expectation of multiple offers driving the price up.

But in the Juanita and Woodinville neighborhoods, there is no sellers' advantage. That market is considered "balanced" up until the $500,000 mark, then mostly gives buyers the advantage. Underpricing a home in those areas would be risky if the seller expected to get more than the asking price.

Windermere bases its analysis on the number of homes for sale weighed against the number sold in a given price range and time period.

These results are for the seven-week period ending Aug. 29. The next seven weeks could bring entirely different conclusions.

Q: When my husband and I bought our house 37 years ago, no one suggested that my name should also be on the document. The house is paid for now and still is in only my husband's name. Is there a reason I should pursue having my name added? Would it be difficult or expensive to do so?

A: "If the house was purchased during the marriage and paid for with community assets, it is most likely 'community property,' which means that each spouse owns half -- even if only one name is on the title," says Seattle attorney Lori Rath of Rath Law & Mediation.

(The situation may be different, she says, if a spouse purchases the home before marriage and uses their separate assets to make payments.)

"Assuming the house is community property, it is still probably in your best interest to add your name to the title," Rath advises.

"That can be accomplished by a simple deed and should not be very expensive, although there will be county recording fees in addition to legal fees. No real estate excise tax will be due because there is an excise tax exemption for this kind of property transfer."

Q: In 2003 my parents rented out our family home, which they'd owned about 25 years. In 2005, my father passed away. Mom plans to move back within a year or so. Will my mom still be eligible for the capital gains exemption when she sells the house?

A: Years ago, a personal residence converted to a "business use" like a rental, remained that until it was sold, says certified public accountant Rob Keasal, residential tax specialist with Anderson Zurmuehlen & Co. in Seattle.

Then the Internal Revenue Service changed the rules. Now owners can claim a personal-use capital gains exemption if the home is their primary residence two of the five years preceding the sale. So it can go back and forth between home and rental as long as that timeline is met.

The clock has probably run out on your mother's previous occupancy, but will start again once she moves back in, says Keasal. Then, as a single owner, she'll be eligible for a $250,000 tax exemption on her home's "gain" or profit after she's lived there for two years. That profit will be figured based on what the home was worth when your father died, not what your parents originally paid for it. (Homes get an automatic "step up" in basis -- the base value of the home -- when an owner dies.)

What if your mom moves into the family home, but doesn't stay for two years?

If a person becomes incapable of self care and has to move into a nursing home, the period in the nursing home would count toward the two years, Keasal says. So let's say your mother moved back to her home, lived there for a year, then went into a nursing home for a year before selling the property. In the IRS's view, she qualifies for a $250,000 capital gains exemption.

Q: We bought our home five years ago in a private, wooded area in Snohomish County. We own easement rights (along with five neighbors) to a lovely, quarter-mile, private drive that leads to our house. Now a developer has purchased all of our neighbors' homes and land, and is threatening to have the county reverse our easement rights. They said they will provide a new street for us (lined with packed-in new houses), but it will be from a completely different direction that will cut off access to our mailbox, and even the street listed on our home's title. What are our rights in this matter?

A: There's probably more to this situation, suspects attorney Larry Smith, with Graham & Dunn in Seattle. For instance, did the developer first offer to buy your easement, then when you declined begin talking of having the county reverse your easement rights?

A reversal likely won't happen, Smith says, because "the power of imminent domain is not available to developers to help them develop property. So the notion that the county is ready to condemn your easement raises a red flag for me."

That said, it's conceivable the county will allow a new public road to serve the new development. Counties usually require developers to install and pay for these roads. However, it strikes Smith "as unusual the county would put in a new road over a private easement to serve a developer's private development."

He suggests you visit or call the county's planning department. Speak with the planner overseeing the developer's plans and ask that person what's going on.

"They can tell you if the county is considering condemnation of your property, or more likely that it's not going to do that," Smith says.

Then if you don't like the direction this is going, contact a land-use attorney to explore your options.

However the bottom line is this: If the developer owns the neighboring land, it will get developed and there's nothing you can do about it. So, "it may be in your best interests to have a new road developed," Smith says.

Q: I bought a home with my son on a Veterans Administration loan for us to live in together. Now our plans have changed, and we want to rent it. Can we do so without getting into trouble with our mortgage company as it was purchased as an owner-occupied house?

A: As long as your original intent was to occupy this house, and your loan documents reinforce that, you're OK, says Susan Siegler, a loan specialist at the Department of Veterans Affairs in Washington, D.C.

"What the law actually requires is that a veteran obtaining a VA loan certify they intend to personally occupy the property. They do it at application and at closing," Siegler says. "That's to make sure the vet isn't signing it to obtain a loan for a rental property, or purchasing it for someone else."

But the VA realizes that homeowners' circumstances change. So the VA will look for red flags in the loan documents, but "unless it can be proven that there was no intent to personally occupy and they made a false statement, there's really no repercussion."

Q: I'm searching for a condo and am amazed that prices have not dropped yet, despite the accumulating inventory. Please enlighten, if possible.

A: When inventory builds, price appreciation slows, which it's obviously doing around here. But in the Seattle area, overall median home prices haven't fallen on an annual basis in the last 22 years (amount of time I have statistics). There have always been enough buyers to keep them climbing, sometimes a little, sometimes a lot.

Certainly prices of individual homes have been cut, and it's not rare for median prices to fall for a month or two in a specific area (particularly if it has a small number of sales, and one month they're expensive homes and the next month less-expensive homes ... the luck of the draw).

I liken it to gas prices. You know from experience that gas may cost a nickle less tomorrow at your local pump, but that's not indicative of market trends. Small fluctuations are normal; it's long-term price movement that reveal what's really happening.

Will local home prices fall in the future? Anything is possible. The most likely cause would be a serious recession with lots of lost jobs, which translates to lost buyers.

But at the present time, Puget Sound's economy is healthy - healthier than the national average. We're adding jobs (whether there are enough well-paying new ones to support home ownership is another question) and adding population. Certainly the subprime mortgage meltdown is having an effect, but there are still plenty of borrowers with good jobs and good credit.

So with the buyers still there, home prices are continuing to go up this year. Will they meet the 5 percent annual price growth (for all homes - including condos and single-family houses) predicted by the National Association of Realtors? We'll see.

Q: Does it ever make sense to have separate agents for listing your existing property and representing you when you buy your next home? I plan to sell a condo in a highly desirable downtown neighborhood. My gut is telling me to enlist a selling agent with a strong grasp on the condo market specific to my block. However, this person might not be the most experienced real-estate agent to help me look for a single-family home in a different neighborhood in the same city.

A: Geography, more than housing type, is a consideration when choosing an agent, says J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Most agents tend to work within about a 10-mile radius and are familiar with both houses and condos in their areas, he says. (Weekly open house events are held especially for agents to aquaint them with all properties new to the market.)

When you think about it, that makes sense. Buyers shop by property type, neighborhood and budget. Therefore, they may start out looking for a detached home, and buy a town house or condo instead if they decide it delivers more for the money. A good agent will be able to help them explore all their possibilities.

Scott suggests you begin your agent search by asking neighbors, friends and coworkers for referrals. Interview agents, asking them how they'd market and price your condo.

Ask them, "what their game plan is to showcase this property to get the best price," Scott suggests. They should also help you compare your home to other for-sale condos that would be in competition for the same buyers.

Ask the agents what areas they work in, what types of properties they handle, and whether they usually work with clients in your price range. And crucial is rapport. Scott says you want an agent you feel comfortable with, who you feel communicates well with you.

If you're considering buying a home more than 10 miles from your current home, then you probably need two agents. Scott suggests you ask the first one for a referral to a second in your target neighborhood.

"Agent-to-agent referrals are a highly trusted source," he says.

Q: I hear there's a new homestead exemption in Washington State. What are the benefits for homeowners?

A: Washington, like other states, has long had a homestead exemption. Enacted into law, this exemption protects a certain amount of home equity from creditors and is intended to help keep families from losing their homes in hard times, according to a recent state senate report.

The legislature increased the homestead exemption from $40,000 to $120,000 effective July 22. While other states require homeowners to file paperwork in order to be eligible for this exemption, Washington grants it automatically to all homeowners.

Most homeowners never utilize the exemption, but it can be helpful to those in financial distress.

"It helps people in bankruptcy because it protects equity in their home," says Seattle attorney Christina Latta of Seattle Debt Law. "They could file (bankruptcy) and they wouldn't have to pay the equivalent of that available equity to creditors."

Q: Regarding your July 22 Home Forum item about buyers doing a neighborhood review as part of the buying process: my real estate agent told me that the legislature changed the law recently and buyers can no longer back out of a sale based on what they find out about the neighborhood. Is this true?

A: No it's not, says Seattle attorney Mark Schedler, of Williams Kastner & Gibbs, who answered the original question.

"The legislature didn't do anything about a neighborhood review; the concept has never shown up in any legislation at all," Schedler says.

The point of a neighborhood review is to allow buyers to research their neighborhood and back out of the sale, within the time frame agreed upon by buyers and sellers, if the buyers find anything they don't like. Like a sex predator living next door. Or plans for a view-blocking apartment building nearby. The buyers' earnest money is returned.

An option to have a neighborhood review is included in the sales forms the buyer gets if those forms were created by the Northwest Multiple Listing Service. Most agents around here use NWMLS forms.

What has changed is the form. Form 35 used to be neighborhood review. Now neighborhood review is a separate addendum called Form 35n.

Q: My fiance and I will marry next month. We each own a house. Is there any reason to put -- or not to put -- our names on both houses? We'll most likely sell one of the houses eventually.

A: You have complete control over a home titled in your name only, and that control is not something to give up lightly, says Seattle attorney Mary Ann Vance of Vance & Ridgway.

"The large issue is: do you want to make these homes community property or do you want to maintain them as separate property? There are a number of things that would go into that analysis," Vance says.

Equity is one of them. If one of you has, for example, $400,000 in equity and the other has $40,000, the person with the larger amount is giving much more to the union than the other. Vance says she'd ask, "What are you really getting for the money for doing it?"

Another important factor: your credit histories. "If someone has a bad credit rating and you put them on your title, you've dirtied up the title with their judgments and liens," she says. That's why she recommends that as unromantic as it sounds, you share credit reports with each other.

Still another factor: other heirs. If you have children from previous unions and one of you dies without a will, the surviving spouse keeps their half of each of the houses and also inherits half of the deceased person's share of them. This gives the survivor three-fourths ownership. The final quarter is inherited by the deceased person's kids. That might not sit well with the remaining spouse who can't sell, or even keep, the property if the other heirs object. Indeed, the only way around that is to go to court.

There are other factors, too, including timing the sale of one house to get the best tax advantage, and getting permission from your mortgage lenders to add names to titles. Mortgage documents commonly require that.

Because these situations are so individual, Vance suggests you consult with a real estate attorney who can custom tailor advice to your particular situation. Also, an estate attorney can draw up wills that can insure your property is eventually disbursed as you wish.

Q: You suggested in your column last Sunday that home buyers talk to the neighbors before buying. But this is what happened to us when the home next door was for sale. Potential buyers came up to us and asked about the neighborhood, and we said we totally enjoyed it. Then before the open house, the real estate agent came over and told us not to talk to the people attending it. She said if we did she'd take action against us -- as in court! Could she have taken action against us if we'd have said our neighborhood was the pits?

A: Many real estate agents routinely suggest that their clients perform a neighborhood review, which obviously includes talking to neighbors. The forms agents use in home sales even make such a review an option for buyers. So to have an agent threaten legal action for helping a buyer get the lowdown on the neighborhood is unusual.

It's also so much hot air. Neighbors have no legal relationship with an agent selling the home next door, so the agent has no control over them. No contract to enforce. Nothing. Thus as long as you tell the truth, be it good, bad or ugly, to prospective buyers, you're OK.

That said, you still need to be careful not to commit slander. That means, for example, that you'd be unwise to say a neighbor was a drug dealer if your only "proof" is frequent sightings of suspicious visitors to that neighbor's home.

Robert, a researcher in Washington, D.C., e-mailed this question in response to a July 6 story that said Seattle-area home sales were down, inventory is up and prices are moderating.

Q: I was wondering the source of the house supply data statistics you included. Also, would you happen to know of a source for existing home sales volume, days on market, and month's supply by county in Washington state? I have been scouring the Web and can find no source for all of these data points. Your article included more detailed data than I've ever seen on the housing market in the region, it was great.

A: That story contained information from several different sources.
Alan Pope, a surveyor in Redmond, created the chart showing homes sold as a percentage of homes available. Pope makes that analysis, which shows the strength of the housing market, available here: www.alanpope.com You can search it for King and Snohomish counties. On the site, Pope calls that data "absorption of inventory."

The home sales data in the other three charts that accompanied that story was provided by the Northwest Multiple Listing Service, which compiles monthly sales statistics for 19 mostly Western Washington counties. It puts much of that information here: www.nwrealestate.com.

There is no statewide source of current home sales data because that data is generated by Realtors who share it with their local multiple listing services.

According to Stephen Klaniecki, spokesman for the Washington Realtors Association, there are seven main Multiple Listing Services in the state.

Besides the Northwest MLS, the others are:
RMLS covers the Clark County Area at www.rmls.com
Yakima MLS at www.yakimaassociationofrealtors.com
Spokane MLS www.spokanerealtor.com
Tri-Cities MLS www.tricityrealtors.com
North Central Washington MLS www.ncwar.com
Walla Walla MLS www.wwarealtors.com

Klaniecki says most do have some statistics on their sites, but as a general policy don't release everything. The information is compiled primarily for their members' use and "a lot of it is not public information," he explains.

For example "days on market" information showing how long Seattle-area homes have been for sale is not released.

If you want more information than these MLS sites provide, you'll have to contact them individually.

"You have to request it, and then it depends on who is asking and what use they intend," Klaniecki says.

Q: After we bought our home in Shoreline last year we learned that the seller and the seller's agent knew that two houses were about to be built that would significantly block our view. Neither disclosed it to us.

In our estimation, the house would have sold for $200,000 less than we paid for it had it had the diminished view at that time. What recourse do we have against the seller and agent for not disclosing this information?

A: Sellers must disclose what they know about the condition of their home on "Form 17" that's given to the buyer. Agents also must disclose what they know, although they're not required to go looking for information.
But that's not the end of the story, says Seattle attorney Mark Schedler of Williams Kastner & Gibbs.

"The key question in disclosure cases is not what the seller or real estate agent knew; it's whether the information would be reasonably discernable through a diligent investigation," he explains. If it is, then courts will rule that it's the buyer's fault he or she is in a pickle.

That's why due diligence is so important.

"The courts have found that items that are readily ascertainable to the buyer include not only conditions that a home inspector would find, but things that one could learn by going to city hall and talking to the planning dept or talking to the neighbors," Schedler says.

Additionally, the standard real-estate sales forms used include a clause giving buyers the option of reviewing the neighborhood before making a final commitment to buy.

In the last two years, when sales were particularly brisk, some buyers sweetened their offers by waiving the right to a neighborhood review and sometimes even a physical inspection of the property.

A buyer who purchases without taking advantage of these safeguards can be in for two nasty surprises. They can discover, as you did, that they have a problem. And then they learn, as you have, that there's no recourse.

Q: After living in other states, we just bought our first home in Washington. At closing we saw we had no option in how our home was titled. So it was titled as husband and wife, which defaults to community property. We wanted our home titled "Joint Tenants with Rights of Survivorship" to avoid having our home go through probate. Is there some tax disadvantage here to titling it as joint tenants? If not, how do we change it to that?
A: "In states like California, where the probate process is much more difficult than Washington, they prefer the 'Right of Survivorship' option because it avoids probate," explains Bellevue attorney John Sherwood Jr., who's with the firm of Peterson Russell Kelly.
But in Washington, probate is easier so that's not much of an issue, he says. Further, this state has a law saying that property purchased within a marriage is considered community property (in most cases), and there's a huge tax benefit to that. Namely: upon the death of the first spouse, the home's "basis" for capital gains tax consideration is adjusted upward to the market value at the time of death.
So having the home's title held as husband and wife just acknowledges that community property status and provides a framework for tax savings.
"If it's a tax advantage you're looking for, you're fine the way you are," Sherwood says.
However if you're looking to avoid probate, then you might consider setting up a revocable living trust that transfers your property into a trust. "On the death of the first spouse, the survivor is the beneficiary of the trust and the trust owns the assets," Sherwood explains.
There are other ways to avoid probate. An attorney who specializes in estate planning can help you explore this and come up with the best solution for you.

Q: I was wondering if you have a chart showing the yearly appreciation of value in percentage form for King/Snohomish/Pierce counties over the past few years?
A: We've run bits and pieces of what you want, but not a chart showing the past few years' appreciation for the three counties.
That said, you can see appreciation towns and neighborhoods for various in King and Snohomish counties by looking at the data we generate annually for our home price appreciation series. (It includes just the south half of Snohomish County.)
The most recent data is in the charts along the right side.
The historical data can be found at the top under Series Archive.

Q: I rent a cottage behind a home. We share the yard. I was told it's not possible to buy a house with a shared yard. Is that correct?

A: There are a number of newer cottage communities in the Puget Sound area that pair small, detached houses with communal yards. To see what some look like check out the Seattle-based Cottage Company's Web site: http://www.cottagecompany.com.

It sounds, however, like you're wondering if you can buy the cottage you now live in (presuming the owner is willing). Whether that's possible depends on whether the property can be divided, and that depends on the local zoning, says Seattle attorney Rebecca Wiess.

Zoning commonly requires a minimum lot size. In practice this means that if the lot where your home is located is large enough to be divided into two lots that at least meet minimum size, it may be possible to legally divide them. Then you'd own the cottage and your portion of yard and the home's owner would own the other share.

Wiess suggests you investigate zoning with your city's building department and see what options you might have. Your next step is to consult with a land-use attorney "and not take the city's word as the absolute last word," Wiess says.

If none of this pans out, another alternative is negotiating a 99-year lease for the cottage. There's local precedent for long-term leases: cabins on Forest Service land and on land owned by Indian tribes.

Q: Based on a market analysis, we priced and sold our condo for $165,000. However the buyer's appraisal, and subsequent second opinions from other appraisers, said the property was worth only $145,000 to $150,000. I think this ignores the fact that my condo has a garage and others around me, which have sold for less, don't have garages. Are the lenders, through appraisers, conspiring to bring values down after the recent home loan "crisis?"

A: With more than a decade of appraisal experience, Eric VanderWaal says, "I've never had a situation where a lender wants the price to come in under value. The last thing lenders want to do is have prices go down."

Here's why: If values go down, so do the size of mortgages. Smaller mortgages mean less profit for the lenders. For an example of this, let's use your numbers. A $165,000 mortgage, at 6.5 percent, generates $210,448 in interest over 30 years. A $145,000 loan at the same interest rate generates $184,940 in interest.

So what happened in your case? VanderWaal, of Bridgeport Appraisal in Woodinville, says it could be one of several things. For starters, condos are often harder to appraise than houses because their relative affordability means their prices are more likely to be bid up. The more volatile the prices, the harder it is to get an accurate read on them.

It's also possible that your condo simply got a bad appraisal. Perhaps the appraiser ignored your garage because he or she didn't have similar nearby properties to compare yours to.

Finally it could be that your property experienced what's called an "above market sale." This means the appraisal is accurate, but the buyer agreed to pay more than it was worth on paper. That's not unheard of at all.