Dear David,

We tried to buy a home in a multiple offer situation and went in at full asking price with no conditions. The seller reviewed all offers and found that ours was the best, but then refused all offers in hopes of getting over asking price in the future. When is an offer to sell not an offer to sell? – DISAPPOINTED

DEAR DISAPPOINTED: While I can appreciate your frustration, it’s important to note that a home seller is not under any obligation to accept an offer that is presented to them. You can’t make someone sell their home, and sometimes you can only speculate at what motivates them to head in a certain direction. In today’s marketplace, it’s common to see a seller underprice their home in an attempt to encourage multiple offers.  If this was the case in your situation, it’s possible that the seller took this approach, but didn’t receive the dollars they were hoping for. Alternately, I’ve seen a seller accept less than the highest offer in multiple offers because they didn’t like a buyer. Sometimes it’s hard to predict!

To achieve the best outcome moving forward, I suggest you navigate the offer process with an expert agent who can clearly balance your expectations with the possible outcomes of your offer. Some surprises along the way are inevitable. A selling agent is never at liberty to disclose what their client will accept for a property and if they do so without clear written direction from a seller, they are in direct violation of the Realtor code of ethics.

Dear David,

Is the mortgage insurance premium on our rental property tax deductible? – HOPING FOR A BREAK

DEAR HOPING: Mortgage insurance premiums on a rental property are tax deductible in the year that they were paid. If you have paid premiums through 12 months of the year (from January through December), you can deduct 12 months’ worth of premiums. If you started paying premiums mid-year, you can deduct the premiums that were paid from that point until the end of the year.

If you decided to pre-pay your mortgage insurance premiums, the amount you prepaid in total determines how much you can deduct.  Let’s say you took out a 72-month mortgage on your rental property and prepaid the entire mortgage insurance policy in advance, starting in the month of July. To calculate the amount you are allowed to deduct, you would need to spread the cost of policy over the 72 months, then figure out how many months’ worth you paid over the course of each tax year. For example, if your premiums were $100/month and you pre-paid the full policy at a total cost of $7,200 upfront, you could deduct $600 the first year (covering the $100/month premiums paid from to July to December), $1,200 in years two through six (covering 12 months of premiums each year), and $600 in year seven.