List it, spruce it, show it, but first make sure its price is right

Question: Our home has been listed for sale for more than five months.
By: Robert J. Bruss: Inman News
The local market is very slow. The listing agent has the house on her website and occasionally holds a weekend open house. We need to sell before we can buy another home near my husband's new job. What else can we do?

Answer: If your home has been listed for more than five months, something is wrong.

The primary reason a house doesn't sell is because it's overpriced. Ask the listing agent to prepare a new comparative market analysis. This form shows recent sales prices of similar nearby homes, the asking prices of neighborhood homes (your competition) and the asking prices of recently expired comparable listings (usually overpriced).

If your home is overpriced, it's time to face reality and reduce the asking price.

Be certain your home is correctly listed in the local Multiple Listing Service and on the local MLS website, the agent's most powerful marketing tool. Ask the agent to detail what she has done and is doing to properly market your home. How often does she advertise it in the newspapers and in local home sales magazines? She should be holding a well-advertised open house at least once a month.

In addition, she should network with agents who sell homes like yours to be certain they are aware of your property. Lastly, ask the listing agent if she recommends staging your home to show it at its best, such as by removing old-fashioned furniture and sprucing up the interior.

Cost of new roof is not deductible

Question: We recently had our roof replaced. It cost $23,000. Can we depreciate the roof over its 20-year life expectancy?

Answer: No. Home repair and improvement costs for your personal residence are never tax deductible. However, you can add the cost of that new roof, which extends the useful life of your home, to your residence's adjusted cost basis.

When you eventually sell the home, you could then reduce the amount of your capital gain.

Dad could opt for a reverse mortgage

Question: My elderly dad lives in his home alone. He refuses to sell, even though he owns the $700,000 house free and clear. He could live like a king in a luxury rental apartment. The house needs repairs, especially a new roof. His banker suggests a home equity loan. But I wonder if that is smart because he has a limited income from Social Security, stock dividends and a small pension. What do you recommend?

Answer: The banker wants to sell a home equity loan because he gets a commission, whereas the local bank probably doesn't make senior reverse mortgages. Such a mortgage can provide your dad with the money needed for a new roof and other expenses he might have.

He will have the choice of a lump sum, a lifetime monthly income, a credit line (except in Texas) or any combination. Most seniors choose the credit line and use the available funds as they need them, such as for a new roof, a new car or a vacation.

The big advantage of a reverse mortgage is that no repayment is required as long as your father lives in his home. But a home equity loan requires monthly payments.

Because your dad's income is limited, adding a monthly payment for a home equity loan to his burden might not be wise.

Few agents like home-share sales

Question: Is there a market for partial interests, in this case a 50% interest in a vacation home?

Answer: There is no organized market for partial property interests. Most real estate agents refuse to take a listing for a 50% interest in a property. Ask your friends and relatives if they want to buy it. If somebody is interested, expect to sell at a huge discount from 50% of the fair market value for the entire property.

Keep shopping for reverse mortgages

Question: My husband and I own a house worth about $750,000. We need a reverse mortgage. But the FHA and Fannie Mae will give us only a $61,000 lump sum or $400 per month. These amounts seem extremely low. What should we do?

Answer: When a principal residence is worth more than $500,000, the best reverse-mortgage lender is often Financial Freedom.

To find local reputable reverse-mortgage originators for all three nationwide lenders in all states, go to http://www.reversemortgage.org .