Question (CA): I am single, 52 years young, and renting my current residence. I have been with the postal service for 23 years. I hope to retire in 5 or 10 years.

I have a high debt-to-income ratio, yet a good credit standing. I have very little in general savings (no "down-payment) yet friends are telling me this is a good time to buy real estate and that I should. I'm afraid of a large monthly mortgage hanging over me preventing me from retiring when I want to.

Should I be trying to buy my own property?

Answer: We lean toward the conservative side when it comes to acquiring real estate. That is, we believe it is always more prudent to establish an automatic savings plan into which a person contributes "X" % from every paycheck. That way, in the 5 or 10 years that you plan to continue working, you will have a down payment in the event you decide to purchase a home. You might also check with a loan officer (i.e. mortgage broker or your bank) to determine what their professional opinion is regarding increasing your savings versus reducing your debt.

Conditions and people change. But one thing does not change, and that is the stress and other unpleasantness that can accompany a large monthly mortgage relative to the income you have to pay it.

There are two formulas that we suggest a buyer of residential property uses together as "rules-of-thumb" meaning, that there are exceptions but as general rules they are very good. They are, the following:

1. 28% of a person's gross monthly income can be used to pay principal, interest, taxes and insurance for a property (i.e. the entire mortgage payment); and,

2. 36% of a person's gross monthly income can be used to pay the principal, interest, taxes and insurance for a property PLUS all the other monthly bills.

Question (FL): How can I find a Realtor that "specializes" in finding buyers in other countries that are interested in purchasing homes in the U.S. (i.e. Kissimmee, Florida)?

Answer: Access the National Association of Realtors ("N.A.R.") website at realtor.com. When the main page displays, locate the "Find a REALTOR®" section and enter Kissimmee for the city, and select Florida for the state, then press "Go." The "Find a REALTOR® Search Options" displays. Select the checkbox reading "Show areas near Kissimmee, FL."

At the next page, under "Additional Search Options" select the checkbox marked "Select All." Then scroll down to the area entitled "REALTOR® PROFESSIONAL DESIGNATIONS & CERTIFICATIONS" and select the "CIPS" designation. Beneath the REALTOR® PROFESSIONAL DESIGNATIONS & CERTIFICATIONS area, select the "Search" button. You should see that 34 licensees who are members of N.A.R. match your search for real estate licensees in or around Kissimmee, Florida, who specialize in dealing with foreign persons interested in investing in real estate located in Kissimmee, Florida or nearby areas.

Question (KY) My sister put her house up for sale in Kentucky. The first contract was signed and it was to close on a set date. That date passed and still no closing. After 3 more weeks a closing date was settled upon again. The buyer sent all the closing papers back to the Realtor signed but without a check. An official closing date was set and the lawyer had all the paperwork, but the woman decided that she did not want to buy the house anymore. Is there any legal recourse since contracts were signed?

Answer: One usually has "legal recourse" in a real estate transaction when one of the parties breaches the contract. The primary question is, however, what are the merits of the case? In order to answer that question, an attorney at law, whom you hire as your attorney and who has successful experience in such matters, should review all the documents that comprise the transaction.

The next question that should be answered has to do with the other party. In your sister's situation that would be the buyer. If your lawsuit is successful, does the buyer have adequate resources to pay your sister for damages, attorney, and court costs? Was the buyer represented by a real estate licensee in the transaction? If yes, then it is possible the Errors & Omissions Insurance that is required to be carried by all Kentucky real estate Licensees (usually $100,000 per licensee per claim) might cover it.

Most real estate purchase and sale agreements contain a specific provision in the event of default (a breach of the contract, for example) of one of the parties. Your options, provided the contract is valid and enforceable, should most likely be addressed in that paragraph.

Question (NJ): My sister and her boyfriend are buying a home. He is paying cash (all his money) and wants to put her on the deed as well.

If they split up and she has not invested any money in this property, can she still claim 50 percent ownership?

Answer: Your sister should consult a New Jersey attorney who has successful experience in estates and estate planning. Typically with unmarried couples, your sister's name would appear on the deed as either a Joint Tenant (Your sister and her boyfriend would each own 50 percent of the property) or as a Tenant In Common (your sister and her boyfriend would each own a proportionate interest that does not have to be equal).

It sounds as if her boyfriend is planning to include your sister as a Joint Tenant typically phrased as Joint Tenant With Rights of Survivorship ("JTWROS"). In the event they broke up and her boyfriend did not wish to be accommodating to her, your sister would file a "partition lawsuit" in which the court would force the sale of the property and divide the proceeds between the two owners, with the exception that typically when one owner bears all the costs of maintaining ownership of the property, such costs such as property taxes for example, are usually reimbursed to that party.

Published: September 11, 2007

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George Stephens, CRB is the Broker of ERA Stephens Properties. He is licensed as a mortgage broker in Texas, and a real estate broker in Texas, Georgia, and Massachusetts. Charles J. Jacobus, JD is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law, and the author of Texas Real Estate Law, and Texas Real Estate, both published by Thomson Publishing. He also teaches at Champions School of Real Estate, Houston Community College, and is an adjunct professor at the University of Houston Law Center. To send us a question visit AskGeorge.net and click the "Ask A Question" button. The answers to questions in this column do not contain legal advice. George and Chuck are co-authors of Texas Real Estate Brokerage and Law of Agency, published by Thomson Publishing. If you wish to obtain legal advice, you should consult your own attorney.