Question: My husband and I made an offer to purchase a house about two months ago, and the grumpy old man who owns it accepted. It’s been a total nightmare since. He originally told us that the house was in top shape, but the home inspector we hired found evidence of past flooding in the basement, a water heater that’s slowly leaking onto the floor and several other problems that would cost thousands of dollars to fix. The seller won’t pay for any of the repairs or agree to lower the price he originally accepted. We love the house, but we can’t decide if we should go through with the deal or look for someplace else. What do you think we should do?
Answer: There’s an odd thing about decisions — you usually don’t need to talk yourself into the “right one,” whether it’s a house, a car or even a potential spouse.
Your relationship with the seller clearly started off on the wrong foot when he misled you about the property’s physical condition. It got worse when the home inspector uncovered several other problems that would be expensive to repair, but the cantankerous seller refused to help pay those costs or to cut his asking price so you’d have the money to pay them yourself.
If he’s been this uncooperative so far, just imagine what may lie ahead if you decide to close the deal anyway and then even more problems arise.
Assuming that you followed my longstanding advice to make your purchase offer contingent on obtaining a satisfactory home inspection, you now have the right to cancel the transaction and get your deposit back because the inspector’s report lists many expensive repairs that need to be made.
Frankly, that’s what I would do. There are plenty of other great homes for sale today, and record-low mortgage rates have shifted the power in most parts of the nation’s housing market back to buyers rather than sellers — especially from those sellers who don’t want to be reasonable.
Real estate trivia: A good way to remember to change the batteries in your home’s smoke alarms, radon detectors and the like is to do it when daylight saving time begins March 8. Repeat the task when DST ends on Nov. 1.
Q: The flowers in my backyard have been destroyed by insects. Can I file an insurance claim to have them replaced?
A: Sorry, but probably not.
The cost of replacing flowers, trees and bushes usually are covered by a standard homeowners policy, commonly referred to as an HO-3. You would get most of your money back (after paying your deductible) if they were stolen by a thief or destroyed by fire, lightning or even falling aircraft.
Losses caused by insects aren’t usually covered, though, in part because insurers expect policy holders to personally take care of their plants and trees or to hire a professional to look after them.
Call your insurance agent for details, and to ask if there’s a loophole in your policy that would entitle you to a reimbursement that would offset the deductible that you would first have to pay.
Q: Our son graduated from a local university about a year ago and, after a long job search, got a great position at a research firm on the other side of the country in July. He was expecting some big tax deductions for his 2014 job-search expenses (including lots of money in airfare and hotel stays to visit potential employers), as well as write-offs for his relocation costs. My sister, though, says that none of those expenses are deductible because it’s my son’s first full-time job. Is this true?
A: Your sister is half-right and half-wrong.
Older workers can deduct nearly all of their job-search expenses. But many of the costs of landing a very first full-time job by a younger person -- from the price of printing resumes to overnight hotel stays -- generally aren’t tax-deductible. This odd Internal Revenue Service rule treats recent college grads and other young people who are entering the workforce for the first time unfairly.
Your son, though, should be able to deduct most of the relocation expenses he incurred to move to the job that he finally accepted because, as your letter states, it’s “on the other side of the country.”
A cross-country relocation clearly meets the IRS key requirement that a first-time job seeker’s relo expenses are tax-deductible if the new job is at least 50 miles from the previous home — whether he lived with you while he was in school or stayed in a university dormitory. That means that he can write off the cost of hiring a moving company and even packing his stuff up, and perhaps claim a 23.5-cents-per-mile deduction if he followed behind the moving van in his personal car.
Your son can get a free copy of IRS Publication No. 521, Moving Expenses, by calling the agency at 800-829-3676 or by downloading it from a computer at www.irs.gov.