Ms. Lank: Can a real estate agent be his or her own agent? Also ... can a real estate agent have their spouse as a client? -- J.

Answer: Of course agents can buy and sell their own real estate, or act for their spouses. Many do. The salesperson's supervising broker should be informed of all activity, however.

The agent must always make it known, preferably in writing, that he or she is licensed and acting in his or her own best interest. It is not proper to accept a commission, because the salesperson would no longer be putting another client's interests first, and no longer acting as someone else's agent.

Who Owns The House

Dear Edith: Perhaps you have already answered this and I missed it. After her husband died, my mother-in-law put her house in the names of her seven children. Two of them are now dead. Do their names come off the title now? Would their families inherit? I know we should consult an attorney but I wanted your opinion first. -- M.F.

Answer: The answer depends on the wording of the deed your mother in-law signed when she turned the house over to her children. She may have listed their names "as joint tenants" or "as joint tenants with right of survivorship." That would mean the property was owned by the group. When the first one died, the same group still owned it, though it contained only six persons. When the second one died, there would be five co-owners.

But if the deed named the seven siblings "as tenants in common" or if no particular tenancy was specified, then each owner could leave his or her share to chosen heirs. In that case, you'd have to know what it said in the wills of the two who died. Or if there were no wills, how the estates were settled. That would determine who owns how much at this point.

Signing As Co-Buyer

Edith: Can I sign as a co-buyer on a daughter's contract to buy a home in Florida? Her credit is not bad, just doesn't have much of it. Mine is excellent. -- N.

Answer: Yes, you can certainly co-sign your daughter's mortgage. Once you have do, you will be personally liable for the whole loan. Your credit record will show the entire amount as your debt, and you'll be vulnerable if she ever has any repayment trouble.

I Was Wrong

Ms. Lank, I believe one of the answers in your column was incorrect.

The person asked about the tax treatment on the sale of their residence where 60 percent of their home was used for business purposes. You stated that 60 percent of the sale would be treated as the sale of business property and therefore subject to capital gains tax. This is incorrect.

If the part of the home used for business is within the same dwelling unit as the residential part of the home, the taxpayer is treated as having used the entire home as a principal residence for the home gain exclusion rules. No allocation of basis and amount realized from the sale is required. However, the taxpayer must recognize gain to the extent of depreciation deductions allowed or allowable after May 6, 1997. -- S.W.D., Enrolled Agent

Answer: Oh dear, I was still thinking of old rules that no longer apply. Many thanks for setting me straight.

Realtor Out Of Line

Hi Edith, My boyfriend and I recently purchased a house together. We both have signed the contract. However, I am wondering, is it necessary for us to create another contract with a lawyer stating that if our relationship dissolves we will split the sale of the house 50-50 and move out? Our Realtor says this is not necessary because we are both on the contract. What do you think? -- S.

Answer: I think your Realtor is out of line. It takes more guts than I would have, ever, to tell anyone they don't need a lawyer.

As it happens, you should indeed talk with an attorney, together. Yes, each will own half the house. But so what? Suppose you split, one needs money and the other doesn't agree to sell? Or one buys out the other; how would you arrive at a fair price?

And even without a breakup: What if one of you can't make your share of payments? Needs to move in an elderly relative? Is transferred out of state?

Doesn't agree the place needs a new roof?

Your attorney will probably think of even more unpleasant possibilities. That's what lawyers are for. Discuss now exactly what you'd both want and what would be fair, then have your attorney reduce it to writing in a binding agreement.