The Brian and Kindra Show

On the March 26, 2020 episode of The Brian and Kindra show, they discussed parts of the residential real estate purchase contract they use for the majority of their transactions.   In the spring time in the great state of Oklahoma, buyers often ask “what happens of the house we just made an offer obtains severe storm damage?”  The contract Brian and Kindra use addresses the risk of loss and states that risks continues to rest on the seller until transfer of title or transfer of possession.  Buyers are strongly advised to have their insurance in place the day of closing and funding and are typically required to do when obtaining a loan.    Next on the Oklahoma Residential Purchase contract deals with title work and abstracting.  The seller pays for the abstract to be brought up to date.  (The abstract is the history of the property from statehood.)  Once the abstract is updated, it is sent to a title attorney who will review it and determine if the title is clear and marketable.  From this clear title opinion, a title insurance policy can be issued.  Title insurance guarantees the attorney’s title opinion until the day that you take ownership of it.   There are owner policies and lender policies.  Brian and Kindra suggest verifying that the buyer is obtaining their own policy as well as the lender so that their coverage is still in place when they pay off their mortgage.  Obviously, a property is unlikely to sell if there are any title defects.  The contract recognized this and places the burden to clear any defects on the seller.  When this happens, it is helpful to have a Realtor and a closing company to assist you as many defects are common and someone with some experience generally has knowledge of the path to make the corrections.  The contract allows for a delay in closing to correct any title defects.  A 30 day delay is very common. The contract then allows for the buyer to choose if they will have a survey or a mortgage inspection report to be completed and added to the abstract for title purposes.  Brian and Kindra have noticed that not all title companies require this, so it is important to do a little research before one makes a decision.  Brian recommends filing a survey any time one is completed.  Also addressed in the contract is how assessments, taxes and prorations are to be handled.  On almost every settlement statement you will find the sellers giving a credit to the buyer for their portion of the year's taxes.  Some buyer may not notice this proration as they have their taxes escrowed  with their mortgage company.  Also prorated can be special assessments, home owner association dues, rents, etc. The contract also gives opportunity for the purchase of a residential service agreement and who is responsible for the purchase.  Most buyers find the term ‘home warranty’ more understandable than ‘residential service agreement’.    A home warranty can provide coverage on systems in the home such as heating and air, water heaters, some plumbing issues.  Then, when a covered problem occurs, the owner of the policy can pay a deductible instead of the entire repair invoice.  These policies can vary greatly in what they cover and coverage amounts, so it is wise to review them carefully before choosing one.  Also addressed in the purchase agreement are how to handle a dispute.  The contract says the parties will attempt to mediate the dispute instead of going directly to the court system.  Brian and Kindra recognize this a lot of information to process!   Buying or selling real estate can be very intimidating, but one step at a time and it’s all quite manageable!  As always, ask your Real Estate Professional to assist you as you navigate the search for your new home purchase or sale.

On the March 19, 2020 episode of The Brian and Kindra show, they discussed parts of the residential real estate purchase contract they use for the majority of their transactions. Last week we explained that Oklahoma allows real estate licensees to work with both parties as long as this is disclosed to both parties.  We also shared some of the first few items on the purchase agreement including the loan type, purchase price details and information about earnest money.  Today, we will hit on fixtures, inspections and repair requests.  Fixtures generally will stay with the property.  What is a fixture?  We generally refer to fixtures as things that are attached to the property.  This can be confusing so our contract has a list of items included that can help us avoid some confusion. Some things are obvious such as attic and ceiling fans, the central vacuum and attachments and garage door openers.  However, other things tend to surprise both buyers and sellers.  For example, window treatments and coverings are considered fixtures (curtains) and would typically stay with the property.  The kitchen stove whether built in or under cabinet/counter appliances stays with the property, but the refrigerator, washer and dryer are considered personal items and would not necessarily be included.  Brian and Kindra also discussed how storage buildings have even been an item of concern and are frequently reserved by the seller.  It’s always important to refer to the contractual agreement for what should stay or may not stay so that neither party is surprised.  Now, the contract will address a time period in which the buyer can complete inspections and even request for repairs from the seller.  The Time Reference Period can be negotiated on the purchase agreement.  During this time frame, a buyer can have a variety of inspections completed so they can be more comfortable with their investment.  In the Woodward, OK area, most buyers choose to have a termite and a home inspection.  From these inspections, other concerns may arise that would cause the buyer to investigate further with someone licensed in a specific field.  For example, if the home inspection informs of hail damage on the shingles, the buyer may have a professional roofer inspect the roof to determine if the entire roof appears to be bad or if only a few shingles need to be replaced.  This is also the time period in which the buyer should be securing home owners insurance.  Once the inspections are completed, a buyer may choose to submit a Notice of Treatments, Repairs and Replacements form to the seller.  The seller can investigate cost to cure the buyer's requests and can agree to the request, modify the request or simply reject the request. Often this part of the contract feels as though it is a second negotiation.  Additionally, this is the buyer’s opportunity to withdraw from the contract and receive back their earnest money if the inspections are unsatisfactory to them or if the seller will not make corrections that will have property acceptable to them.  There are so many details associated with the contract when buying real estate.  Be on the watch for more information next week when we cover risk of loss, abstracting and title work and home warranties!  If all of this talk of contracts and requirements sounds intimidating, ask your Real Estate Professional to assist you as you navigate the search for your new home purchase or sale.

On the March 12, 2020 episode of The Brian and Kindra show, they took some time to discuss some of the addenda that are associated with the residential real estate purchase contract they use for the majority of their transactions.  Last week we discussed some of the documents that are included with the Oklahoma Real Estate Commission purchase agreement on residential transactions.  Today, we will begin by discussing the form that details the disclosure of brokerage duty. Often, buyers or sellers will ask if the agent works FOR the buyer or FOR the seller.  Simply put, this document allows real estate associates to work WITH both parties.  We really consider it working for the transaction.  Oklahoma licensees have specific things that must be held confidential such as the financial status of the parties they are assisting and the motivation for buying and selling.  This form also declares that the licensee will use reasonable skill and care, honesty and that they will do things the way the real estate commission requires them to.  They also must reduce offers or counter offers to written form upon request of one of the parties and all written offers must be submitted.  Additionally, if the licensee plans to provide fewer services than what is required to complete a transaction, they must disclose this is writing.   Another document that is used with the contract is the Acknowledgment and Confirmation of Disclosures.  This document is very important in that it notifies the parties if the licensees working with both parties are with the same brokerage.  This document also serves as a notice to verify the buyer has received the property condition disclosures and the lead based paint disclosure if required.  Last, it tells the buyer and seller both that they will have costs associated with buying and selling and they should look for an estimate of expense from their agent.    Finally, we will begin to talk a little about the actual purchase agreement.  The purchase agreement immediately tells the reader if there are any addendums to the contract.  Most commonly, a loan supplement will be attached to the contract and this part of the document will give the reader notice to look for a loan document or other type of attachment.  Other types of addendums to the contract could be a lengthy legal description or a survey.  Next up the buyers and sellers names are filled into the contract.  It is important to have these names spelled out in the same manner as they are on their loan applications.  Now, it’s time to type in the address and the legal description of the property.  Then of course, a purchase price, earnest money and the holder of said earnest money are included.  Next, a closing date!  All of these items are written in the contract at the time of the offer and each one could be negotiated further.   The column is out of space for today!!  More information about the residential contract will be shared in the weeks to come.  If all of this talk of contracts and requirements sounds intimidating, ask your Real Estate Professional to assist you as you navigate the search for your new home purchase or sale.

n the March 5, 2020 episode of The Brian and Kindra show, they took some time to discuss some of the addenda that are associated with the residential real estate purchase contract they use for the majority of their transactions. First, Brian wanted to be sure to note that a contract is when 2 parties sign an agreement.  He jokes that a contract could be written on a napkin in a convenience store.  However, for the purpose of this column, the radio show and podcasts, the contract they are explaining is a residential real estate purchase agreement that is provided by the Oklahoma Real Estate Commission.  This contract is preferred by many real estate professionals as it helps the professionals to be more consistent in each transaction.   The first thing Brian and Kindra do when explaining the contract to their buyers or sellers is to look at estimated expenses.  For sellers, this will include costs such as prorated taxes from January 1 of the year of the sale until the date of closing.  It will also include the fee to update or build the abstract (recorded history) of the property.  The seller’s fees also typically include commission and a fee to the closing company who prepares and completes the closing process.  They also pay Documentary Stamps to the State of Oklahoma.  It is also the sellers responsibility to provide a deed to the buyer, so an attorney fee may apply as well.   Buyers fees vary depending on whether they pay cash or are obtaining a loan.  Then, depending on the loan type and lender, these fees can vary again!  Often, whether cash or credit, the buyer will pay for a title inspection completed by an attorney and possibly a title insurance policy and abstract update to be complete after closing.  As mentioned before, each lender has varying costs for the loan, but we often see processing fees, a loan origination fee, credit fees, flood zone inspection fees and many others.  Most buyers often pay a full year of homeowners insurance as well as 3 months or so of prorated homeowners insurance and taxes toward their escrow accounts.  Another requirement by the Oklahoma Real Estate Commission are Property Condition Disclosures.  These are to be completed by the seller and offered to a buyer who is making an offer on a residential property. The seller is to disclose any defects to the property.  Page 1 of the disclosure statement asks if each item is in “Normal Working Order”.  If anything is not working, the seller is asked to explain further in a text box.  Likewise, on pages 2 and 3, the seller answers yes and no questions.  If a seller marks ‘yes’, they are asked to further explain in another text box.  These disclosures are very important and a contract should not be signed without obtaining disclosures first.  In addition to these disclosures, a seller must also provide a ‘lead based paint’ disclosure if the house was built prior to 1978.  The column is out of space for today!!  More information about the residential contract will be shared in the weeks to come.  If all of this talk of contracts and requirements sounds intimidating, ask your Real Estate Professional to assist you as you navigate the search for your new home purchase or sale.