Q: In 1995, the court dissolved our marriage. The dissolution of marriage stated our house would be sold as soon as possible, and both parties would share in cost to sell and profit equally. In October of that year, my ex-husband signed a quit claim deed removing his name from the mortgage to allow me to refinance. No money was exchanged between us.

After 13 years and $69,000 of repairs and improvements I finally sold the house. My ex husband is now laying claim to half of the amount I would now get on the basis of today’s selling price and the amount owed on the mortgage at the time I refinanced 13 years ago.

Here’s what I don’t understand: Does the quit claim deed trump the dissolution decree? If the dissolution is the winner, then, in my mind, the answer would be half of the difference between the value of the house at the time of the quit claim deed less the amount I spent making repairs and improvements to the home.

I have a lawyer and he is stumped and tells me to settle. We went to mediation and tried to resolve it, but my ex-husband wanted too much money. We’re due in court soon. Who is right?

A: I can see why your divorce attorney might be a bit perplexed. In theory, when you refinanced the home, you should have settled up with your ex-husband. That would have been the easy time to do it.

Divorce settlements can be difficult in the best of times, but determining values and apportioning expenses can be a bit more complicated. Let’s start at the time of the refinancing. If you had settled at that time, your ex-husband would have been entitled to half of the value of the home.

Let’s assume the value of your home when you refinanced of about $80,000. But you would have been entitled to deduct from that amount his half of the costs that he would have incurred had you and he sold the home. These expenses would have included real estate broker fees, title company and settlement attorney expenses along with any other costs customary in your area. If you were to determine that the amount you owed him at that time was almost nothing, let’s say, $2,500, you have a starting point.

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With the extension and expansion of the $8000 first time home buyer tax credit, lots of our readers are happy. But some are rather angry. Some of the people that would have benefited from the expansion of the tax credit have purchased homes and won't get the benefit of the tax credit. Others want clarification to see if they will qualify for the "new and improved" home buyer tax credit.

Since Senate negotiators announced they had reached an agreement on extending and slightly expanding the $8,000 first-time home buyer tax credit, my inbox has been filling up with questions about the credit and who will qualify for it. I’m also getting lots of comments from people irritated that they purchased this past year and would have qualified but now get nothing.

Q: Love your advice column. When is the compromise bill going up for vote? We could sure use the $6500 credit.

A: The vote happened this week. Senator Johnny Isakson (R-Ga.) was able to attach his legislation as an amendment to S.1699, the Unemployment Compensation Extension Act of 2009.

Since the current $8000 first-time home buyer tax credit expires on November 30, 2009, real estate industry professionals felt it would be helpful to know the extension and expansion is in place before then. If people believe the tax credit is coming, but don’t know when, they might push back their closing, or decide not to bother shopping for a home at all. At least that’s what real estate agents think.

Q: When my husband and I married in 2007, he owned a home in which I lived, but my name was never put on the deed. In July 2009, a mobile home was purchased and the title is in my name. Do I still qualify as a "first time home owner"? I have not owned a home in the last 3 years.

A: Do you own the land on which the mobile home sits? Is it permanently attached? Is it titled as real estate or a vehicle. The answer to your question depends in part on how you answer my questions.

As far as buying a home because your home isn’t in your name, the answer is no. The IRS means test treats a husband and wife as one unit, even if one spouse has never owned property.

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Q: I applied for a refinance with my current lender. I did my application over the phone and was then told the rates and options. I was told I would most likely not need an appraisal, but if I did need one, the lender would pay for it.

I locked in the rate and terms and paid the $395 application fee by credit card. Three weeks later I was told the lender did want an appraisal - but not to worry as I would not be responsible for payment of the appraisal fee.

My home appraised $50,000 less than my mortgage balance and so the rates and terms changed drastically. I was sent an email that my initial terms and rate could not be given to me and if I didn’t take the new terms and fees, I would lose my $395 application fee.

This does not sound legal or ethical to me since the terms I was offered after the appraisal were different than what I was quoted. Am I stuck with the higher rates and points and will I lose my $395 if I don’t go through with the refinance?

A: I don't have good news for you. You told the lender on the phone what your property was worth. The lender priced the loan based on that information. Unfortunately, your estimate of what your property was worth was $50,000 short. Because you don't have the home equity that the lender requires, you cannot get the loan you were hoping to get.

The lender isn't trying to scam you. It's that the government is now backing about 90 percent of loans out there and Uncle Sam is extremely strict about what kind of home equity you have during a refinance.

In fact, the U.S. government is not only backing about 90 percent of the home loans being done right now, but it has been purchasing more than $1 trillion of U.S. housing-backed securities. If the government wasn’t buying these securities, mortgage interest rates would be far higher than they are.

If you feel that the appraiser was in error in determining the value of your property, you might want to research what homes have recently sold in your area. If homes are selling for prices that approach what you thought was the value of your home, you might be able to go back to the lender

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Land contract -- also known as installment contracts for deed -- are complicated documents. If you are not careful, you could end up in a mess. Some issues that can lead to problems in a land contract are title issues, including unpaid real estate and property taxes. But unpaid taxes could be the lesser of some of the title problems you can encounter using a land contract. This reader found unpaid property taxes from years earlier about a year after entering into the land contract.

Q: We purchased our property in 2008 with a land contract. The contract states that the property that is sold to us be “unencumbered.”

Now we’ve discovered that there is a lien for unpaid county property taxes from 2001. The title search did not find the lien. We’d like to know who is responsible for paying the tax bill. And, is the contract void since the property is not unencumbered?

A: When you buy a property under a land contract, you are buying the home over time. You make your payments and when you have completed making all of the payments, the seller transfers legal title to the home to you. If you worked with a real estate attorney to help you through the land contract purchase process, the attorney would have recommended that purchase (or receive from the seller) a title insurance policy for a contract purchase of a home.

If you bought an owner’s title insurance policy, then the title insurance company would pay the tax and make you whole in this situation because the title company didn’t find that the taxes were unpaid.

If you didn't buy an owner’s policy, you would likely owe the tax but could sue the seller for failure to give you unencumbered title. In any event, it’s unlikely that the land contract to purchase the property would be void, but rather that the seller breached his or her obligation to give you unencumbered title to the property. If you are still making payments to the seller under the land contract, you may be entitled to deduct from those payments an amount necessary to pay the amount owed for taxes.

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Short sales, foreclosures and other purchases of real estate can always lead to problems. One risk in buying a home in foreclosure or from a seller in a short sale is that the seller or the bank owner had work done on the property and the contractor never gets paid. The contractor, in this case a painter, then files a contractor lien on the home and the subsequent buyer may get stuck with the bill.

Q: I purchased a house that was a short sale at the end of August and have since received a claim of lien letter from a painter. The builder must not have paid the painter. Am I responsible for the debt owe by the builder?

A: You may be responsible for the lien because it wasn't settled at the closing and paid out of the closing proceeds. This is one of the problems with doing a short sale as opposed to a foreclosure where all liens are usually wiped out.

In many states, buyers purchase title insurance to guard against liens and other title issues that may surface after the closing. The title company in turn protects itself by obtaining a statement from the seller of the home representing that all work performed on the home during the previous months has been paid in full. Once it has the statement, the title company can then issues an owner’s title insurance policy to the buyer covering the buyer for any liens that could pop up once the sale has gone through.

Did you buy an owner’s title insurance policy for the property or did you just buy a lender’s title insurance policy? And if you did obtain title insurance, does the title insurance policy include coverage over mechanics liens?

If so the title company should defend you from the lien or pay the lien holder off to remove it from your title.

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How do you pursue a career in real estate? Where should you start your search when looking to become a real estate agent? A reader wants some job advice in this area.

Q: I graduated with an associated degree in real estate, but I haven't taken the big test, yet. I would love to work with a broker or a salesperson and see what it’s like to work in a residential brokerage company. That would be the best experience. How can I make that happen?

A: You do not need a real estate license to do some jobs in a real estate office. For instance, you could be a receptionist, work as part of the staff that helps get paperwork and documents ready for closing, or be an assistant to a top-selling real estate agent with limited ability to deal with buyers and sellers and probably without showing properties.

But having your salesperson's license will be a huge asset because it will tell everyone that you’re serious about pursuing a career in real estate. It will also allow you to do things like show property (which you typically cannot do if you don't have a salesperson's license) which will make you more valuable to a top agent.

The big problem is that times are tough for real estate agents, and many firms have cut the number of people who were doing jobs like these. They simply don't have enough business to pay for them.

You should make an appointment to talk to the hiring manager at some of the bigger firms in your area and see if there are any openings that will at least help you get your foot in the door, and hopefully pay you while you're taking the salesperson's license.

Even if you can't get a paying job, you should offer to intern with an agent for free, just for the experience.

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Millions of Americans have applied with their banks to obtain a loan modification. They desperately need loan modification help. The loan modification process is taking an extremely long time. Now homeowners want to know how they can get a loan modification -- whether under the Obama Making Home Affordable Plan or not -- and why the lenders are slow to provide loan modifications. A new study is revealing some answers.

Mortgage servicers –- including many large banks – have found it cheaper to foreclose on homeowners than to offer loan modifications that would benefit homeowners and investors, according to “Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior,” a new report from the National Consumer Law Center (NCLC).

And as every good investor knows, net profit isn’t just about the rate of return. It’s also about how well you hold down the expenses associated with that investment.

Most homeowners assume that foreclosure is a money-losing proposition for lenders and investors. There’s a lot of talk that with a short sale, a lender might only lose 10 to 20 percent of an investment. But with foreclosures, lenders might settle for 20 to 30 cents on the dollar or more.

These numbers would seem to point mortgage servicers toward doing more loan modifications. But as the recent RealtyTrac foreclosures number showed, the third quarter had the highest number of foreclosures on record.

“The country is in the midst of a foreclosure crisis of unprecedented proportions. Millions of families have lost their homes and millions more are expected to lose their homes in the next few years,” noted Diane E. Thompson, an attorney with NCLC and author of the study.

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Q: The closing on my house will occur at the end of October or the beginning of November. I should be eligible for the $8,000 first-time home buyer tax credit.

But here’s the wrinkle: I will be inheriting a house in November when my father's estate comes out of probate. Will that make me ine

ligible for the $8,000 first-time home buyer tax credit? I plan to live in the house that I am purchasing.

A: The rules relating to the $8,000 first-time home buyer tax credit require you to be a first-time home buyer by the date of the closing. If you close on your home at the end of October and at that time qualify for the $8,000 first time home buyer tax credit, you shouldn’t have to worry about whether you’re inheriting a house the following month. You need only comply with the other requirements of the tax credit.

To qualify for the $8,000 first-time home buyer tax credit, you must not have owned a home during the three years prior to the closing. You must live in the home you purchase for three years and must use it as your primary residence.

Your modified adjusted gross income may not exceed $75,000 for single people and $150,000 for married couples. Above those numbers, the tax credit phases out. (Your adjusted gross income is basically what you would see at the bottom of the first page of your federal income tax return.)

To get the full benefit of the $8,000 first-time home buyer tax credit, the sales price of the home must be at least $80,000. The way the tax credit works is that you get a credit of 10 percent on the purchase price of the home up to a maximum of $8,000.

Read the full article at ThinkGlink.com, or find more advice and tips on home buying and inheritance.

The first time home buyer has restrictions on income. The first time home buyer tax credit requires you to live in the home for 3 years. Also, you can't have owned a home for the last 36 months. In addition, the first time home buyer tax credit has restrictions on who can sell you the home. If you are buying a home from a close relative, you won't qualify for the tax credit. But what if you inherit the home?

Q: My sisters and I recently inherited our mother's house. The sister that is executor of the will also wants to buy the house. The house has to be taken out of Mom's name before it can be sold, and the bank wants to put it in my sister’s name. That way she would refinance the house to pay us off.

She would like to take advantage of the $8,000 first-time home buyer tax credit, because she hasn't bought a house yet. But if she refinances instead of buying the home, she can’t.

Is there a way for her to get a loan and then buy the house using the 1st time home buyer tax credit? Thanks for your time.

A: There are some IRS rules regarding the “purchase” of a home that is being inherited from an estate. But your question raised other interesting tax issues including your question on the $8,000 first time home buyer tax credit, so I tapped the knowledge of Bill Nemeth, an enrolled agent based in Atlanta.

Nemeth started by noting that your sister (who is the executor of your mom’s estate) is a part-owner of the home, since she inherited a portion of the home along with her siblings.

“The traditional way to view the inheritance of her mom’s house is to call it investment property, as there is no intent to have anyone of the sisters inheriting the home use it as her principal residence,” Nemeth explained.

When real estate is inherited, the cost “basis” in the property becomes the “fair market value on the date of the owner’s death or at any time within 6 months after the owner’s death. “The executor gets to pick the better date,” Nemeth added.

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When you buy a foreclosure, check to see if there are any contractor's liens against the property that have survived the foreclosure. Often, the lender will wipe out all other subordinate liens, including contractor's liens, in the foreclosure process. But in some cases, those liens may still exist and be valid. If you suspect there might be other liens that will be filed against the property even after you close, be sure to purchase a title insurance policy with coverage over contractor's liens. You will want to have this insurance in place to have a title company cover the costs of litigation and the costs to remove the contractor's liens with the purchase of the title insurance even if you bought the property after a foreclosure.

Q: I am in the process of buying a new home. It’s a foreclosure. The lender foreclosed on the developer.

In doing my due diligence on the purchase, I noticed some contractors were not paid. Will these contractors be able to put liens on the house after I close on it?

A: The short answer is yes. Most contractors can put a lien on a home -- a contractor's lien -- when they have been hired to perform work on a home and they are not paid. In some states, contractors have a certain amount of time to put a lien on a home. Some states even require contractors to give the owner notice of the lien before the lien can be effective. Each state has its own contractor’s liens statutes and they can be quite complex.

Now that you know that contractors can lien your property, you also need to know a bit more about liens and the lien holder’s rights.

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