Frequently Asked Questions

Foreclosures, Short Sales, HUD properties: What do I do?

Unfortunately, because of the state of the economy, there are many properties that have been foreclosed and still more properties that face foreclosure.

If you are in a position where you are having trouble making your payments we advise that you contact your lender to see if they can help you and possibly modify your loan. You may also contact any of our agents and we would be pleased to try to help you.

If you are hoping to purchase a foreclosed property or a property that may be sold through a short sale (a short sale occurs when the lender is willing to sell the house for less than what they are owed and may forgive the owner for the remainder of the debt) we can help you.

How do I know what price house I can afford?

The best way to know what house price you can afford is to speak with a lender and have them pre-qualify you. They can check your credit and let you know how much they can loan to you.

If you want a quick guideline to determine what price home you can afford you can use the following formula.

• Your total debt should not be more than 33-40% of your gross monthly income.
• Your total debt would include any loans that you will have for 6 months or more and your total house payment, which includes: principal payment, interest payment, house insurance payment, and tax payment.

Here is an example:

• Mr. Smith earns $4000 a month (gross income, before taxes)
• Mr. Smith has a car payment of $350/ a month Mr. Smith has a credit card payment of $100/ month Mr. Smith has a student loan of $85/ month
• First: 40% of Mr. Smith’s monthly income is $1600. Second: His monthly payments are $535. Finally: Subtract $535 from $1600 and Mr. Smith has $1065 that he can use for a house payment.
• If the house he wishes to purchase has a monthly tax of $150 and the house insurance would cost $40 a month, his Principal in Interest payment could be $875 (i.e. $1065-$190)
• If the interest rate is 6% and the loan is for 30 years, it would cost $6 for every $1000 he would borrow, so if he divides $875 by $6, Mr. Smith could borrow $145,833.

Confusing? Yes, it can be, so please give us a call if you have any questions.

What is Title Insurance and why do I need it?

Title insurance is an insurance policy guaranteeing that there are no liens against the property, and that the sellers of the property indeed have the right to sell the property. A lien is a charge upon real property for the satisfaction of some debt owed. For example a mortgage is a lien. Also, if a contractor put a new roof on the property and he was not paid he may put a lien on the property.

When the property is sold all liens must be satisfied. A title search would be done searching public records to determine if there are any liens on the property. Any liens found would need to be paid before they would transfer the property. The search also makes sure that the current owners have all the interest in the property and that they can transfer all the interest in the property to you.

Title insurance guarantees that there are no recorded or unrecorded liens against the property. If a lien would show up after the property is sold it would be the title company's responsibility to satisfy that lien.

Should I have a Home Inspection?

It is advised that you hire a professional home inspector to inspect the property you wish to purchase. A home inspector will inspect all the structural and mechanical components of the property. They will examine areas that the home purchaser usually does not or cannot easily inspect. They will get on the roof, weather permitting, and into the attic areas. Make sure the home inspector is certified. Inspection usually costs between $250-350 but may save you thousands of dollars.

How do I select a Real Estate Salesperson to work with?

We would like to just say "Come to King Realty", but we know you are looking for more than that.

If you are planning on listing your property for sale we would advise that you select a real estate salesperson located in your area. A local salesperson would have more knowledge about the properties in your area and also have more buyers contacting them to move to the area. Often the same Realtor can assist you in purchasing a home unless you are moving very far away.

We also recommend that the real estate salesperson be a Realtor. A Realtor is a member of the National Association of Real Estate Salesperson. They follow a code of ethics and offer information and education so that the Realtor has the best knowledge and is best able to serve your real estate needs.