Expert: Dick Dennis - 12/22/2010

Question
Hi Dick,
I am the trustee for my late mother's trust, and the only remaining asset is her condominium in La Mesa, CA. I am currently renting it out, and that lease expires in June 2011. I'm very interested in selling the property at that point, but currently the remaining mortgage principal (about $245k# is greater than the probable value #about $225k to $230k).
Since the trust has no other assets, what are the implications of selling the condo at a loss? This may be more of a lawyer question than a realtor question, but I thought I'd give it a shot ;)
Thanks so much!

Answer
Since your mother was the one who obtained the mortgage, Lian, you, as the trustee, should not have to be concerned about your credit standing if you sell the condo at a loss or let it go into foreclosure. However, you are apparently collecting rent. Is that rent more than the mortgage payment? In any case, is the mortgage payments current and the same for the condo's Homeowner's Association fee up to date, too?

Don't be surprised if the probably value is closer to $200,000. Therefore, I recommend you contact a good La Mesa (or south San Diego County) Realtor or two and get their assessment of value. Condos have not been maintaining their value as much as regular homes. Yes, it may be a good idea to contact the attorney who put your mother's trust together to find out if there is anything you should be worrying about as your mother's trustee. For example, the tenant might be entitled to a refund (at least part of it) should he move out at the end of the lease. Also you might find it better to retain the condo and continue to rent it out if it makes sense.

I do wish you well, Lian.

Dick Dennis
CA Real Estate Broker
Lic. #00349415
dixiedee13@aol.com