Lisa Otero
For All Your Real Estate Needs
Phone: (405)200-3193    Fax: (405)604-2988
Home Buying Info

Buying a House in Oklahoma

 

Would-be buyers get pre-approved for mortgages, research school districts, and look at their share of houses in their quest to find a perfect home. But one thing that should be added to the to-do list is to consider the insurance implications of buying a specific house.
When consumers are house hunting, the Insurance Information Institute (III) recommends keeping insurance issues at the forefront of their buying decisions.
"In the frenzied excitement of buying a home, it is important that consumers ask a number of key questions about securing financial protection for their most valuable asset," said Jeanne M. Salvatore, vice president, consumer affairs at the III.
For example, if the house you're eyeing is located in a flood zone, you'll need a separate flood insurance policy, which you'll need to budget a few hundred extra dollars for.
The III says you should also get a copy of the house's claim loss history, which comes in the form of a CLUE report from ChoicePoint or an A-plus report from the Insurance Services Office.
"Getting a copy of a home's loss history provides powerful information to a potential buyer," said Salvatore. "These reports provide information on the number and types of homeowner insurance claims filed by the home's owner going back five years."
If the house had water claims, that would be a red flag -- problems that should be remedied before you buy the house. Conversely, you can also pick up reassurances about the house you're eyeing, Salvatore said. For example, if there was significant wind damage that required roof replacement, you'd be pleased to know you have a new roof.
The III says some of the factors that will influence your insurance include the house location, the type of construction, and its condition. You should also consider:
  • How old the house is. Older homes tend to have features -- plaster walls, ceiling moldings and wooden floors -- that are more expensive to replace and may ultimately raise the price of your insurance.
  • Plumbing, heating and electrical. The older the systems, the more likely fire or water damage will occur. If recent upgrades have been made, it will be easier to get insurance.
  • Quality and closeness of fire department. Your insurance premiums will typically be lower if you live near a fire department with a top rating that staffs firefighters full-time.
  • Disaster-resistance. If the house is built with products that stand up to disasters -- like hail-resistant roofs and windstorm shutters -- it could cost you less to insure.
  • Location. You always hear location is key in real estate. It's also important in determining your insurance premium. It could cost you more if you leave near the coast or a river or in a dense, wildfire area. If you live in an earthquake-prone area, it will mean getting a separate policy, as is the case with flooding.
 

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity
REALTOR.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

10 Hurdles to Closing on a New Home

 

Having your home purchase offer accepted is like getting that runner's high during a marathon. But hold the Gatorade cooler - the property isn't yours just yet. During the 30 days (or so) between when your purchase offer is accepted and when the keys are handed to you (commonly referred to as "escrow"), there are many hurdles to overcome. If you stumble on any of them, the purchase may fall through and put you back at the starting line.
Just like an athlete trains for a race, you can train yourself for the daunting final steps in purchasing a home. Escrow procedures and rules vary by state, but here are 10 of the most common problems encountered during this period, and what (if anything) can be done to prevent or mitigate them.
 
  1. The termite inspection reveals extensive damage. The lender will have a pest inspection done on the home (at your expense - usually less than $100) to make sure there is no serious damage caused by wood-munching insects like termites and carpenter ants. This inspection protects the lender's interest in the property. Tenants who discover termite problems after moving in often abandon the property, which leaves the lender holding the bag. Some lenders may not require a termite inspection, but it may be in your best interest to get one anyway. If the inspection uncovers any evidence of visible infestation, the problem areas may have to be remedied before escrow can close. If the problems are too severe and/or the seller won't pay to fix them, you'll have the option to walk away, as long as your purchase agreement has the proper contingencies.
  2. The appraisal isn't high enough. The bank will have the home appraised (again, at your expense) in order to protect its interest in the home. It wants to make sure the home is worth at least as much as you will be paying for it so that, if foreclosure is in the future, losses can be recouped. If the appraisal comes in too low, the seller will have to lower the selling price or you will have to pay cash for the difference. It may be possible to get a more favorable second opinion from a different appraiser.
  3. There are clouds on the title. During the escrow process, you'll hire a title company to do a title search and issue title insurance. The title search ensures that no one else has a legal claim to the property you want to buy (such as the IRS, the state or a relative of the seller), and title insurance protects you against any future claims to the property. If there is some sort of lien or claim against the property, the issue will have to be resolved before the transaction can proceed.
  4. The home inspection reveals major defects. Most purchase offers have an inspection contingency written into them, so that if the home inspection reveals serious problems, the purchaser can back out without penalty. If you didn't put this contingency in your contract, you may lose your earnest money (usually several thousand dollars). If not, the process of negotiating with the seller to have the home repaired or to credit you money at closing in order to handle the repairs yourself, can potentially hold up the purchase process and delay your closing.
  5. You get cold feet or the seller backs out. The contract will outline justifiable reasons for either the buyer or seller to back out without penalty, such as not waiving a contingency or not meeting a deadline. However, if you decide, after waiving the contingencies, that you don't want to go through with the purchase (for example, because you found another house you like better), you'll again lose your earnest money. The reasoning here is that the seller should be compensated for the time the home was off the market, which will delay the amount of time it ultimately takes him or her to sell (and which may have financial ramifications for the seller). Conversely, if the seller decides to back out simply because of a change of heart or because a better offer was made, you will have a legal right to collect damages from the seller.
  6. Your financing falls through. Savvy buyers don't make offers on homes without getting preapproved - that is, without getting a written loan commitment from a bank that it will provide you with mortgage of a certain amount (and savvy sellers don't accept offers from buyers who aren't preapproved). However, there are things that can prevent the loan from closing, such as if you lied on the application, interest rates increase sharply, your job situation changes or your credit score goes down. Ask your lender how you can avoid problems like these.
  7. The property is in a high-risk area and you don't want to live with that risk (or pay to insure against it). In states that require a natural hazard disclosure report, during escrow you'll receive a document outlining the natural hazards that may affect the home (floods, earthquakes, seismic hazards and fires, for example). The lender may require that you purchase hazard insurance (above and beyond your homeowners insurance), if the home is in a high-risk area, and that insurance can be expensive. It's also a cost you'll be required to pay every month until the loan is paid off, or when you sell the house. To prevent unpleasant surprises during escrow, ask your agent, neighbors, and/or the city planning department, when you first start looking for a home, which natural hazards exist in your desired area, what type of extra insurance you might have to buy, and how much it might cost.
  8. The home isn't insurable. If a previous homeowner has made a major insurance claim on the home, such as water damage or a mold claim, this will show up in insurance records, and insurance companies may refuse to insure the home, thinking that it is too much of a risk. If a home is not insurable, you will not be able to buy it unless you are an all-cash buyer, as lenders require you to maintain homeowners insurance until the mortgage is fully paid off. Of course, even if you are a cash buyer, it probably isn't a good idea to buy an uninsurable home.
  9. There are costly differences between your good faith estimate and HUD-1. When you get your loan preapproval, and again when you put an offer on a specific property, your lender should give you a good faith estimate detailing the closing costs associated with obtaining financing on the home. The good faith estimate is basically a rough draft of what the HUD-1 form you will receive at least 24 hours before closing will show. As its name implies, the good faith estimate should be a close approximation of what you will actually end up paying - ideally within 10% - but some unscrupulous lenders will try to reel in clients with unrealistically-low estimates. If this happens, and you can't get the lender to back down on the excessive charges, your best option may be to ask the seller to extend the closing date and try to rapidly secure alternate financing so you can still buy the house without getting ripped off.
  10. Errors prevent closing on time. There are many different parties involved in closing escrow, and if any one of them makes a mistake, your closing can be delayed. Depending on what your purchase contract stipulates and whose fault the delay is, if you don't close on time, you may have to pay the seller a penalty for every day that the closing is late. The seller could also refuse to extend the closing date and the whole deal could fall through. In a best-case scenario, the seller could simply agree to extend the closing date with no penalty. After all, if the deal doesn't close, the seller will have to start all over again, too.
 

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity
REALTOR.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

Home Inspections Avert Future Headaches

Suppose you bought a house and later discovered, to your dismay, that the stucco exterior concealed a nasty case of dry rot. Or suppose that winter when you fired up the furnace, you discovered a cracked heat exchanger leaking gas into your home.

The best way to avoid unpleasant surprises like these is to arrange for a home inspection before you buy. A good home inspection is an objective, top-to-bottom examination of the home and everything that comes with it. The standard inspection report includes a review of the home's heating and air-conditioning systems, its plumbing and wiring, the roof, attic, walls, ceilings, floors, windows and doors, the foundation and the basement.
Getting a professional inspection is crucial for older homes because age often takes its toll on the roof and other hard-to-reach areas. Problems can also be the result of neglect or hazardous repair work, such as a past owner's failed attempt to install lights and an outlet in a linen closet.
But a home inspection is also a wise investment when buying a new home. In fact, new homes frequently have defects, whether caused by an oversight during construction or simply human error.
Reasonable Fixes: Home inspections cost about $250 to $350, depending on the size of the house and where in the country the home is located. Inspection fees tend to be higher in urban areas and cities than in rural areas. Real estate agents can usually recommend an experienced home inspector. You can find one through a friend or the Yellow Pages under "Building Inspection" or "Home Inspection." The American Society of Home Inspectors, a professional trade group, also has a database of qualified inspectors on its Web site.
Some builders may try to dissuade you from getting a home inspection on a home they've built. They may not necessarily be trying to hide anything because most builders guarantee their work and will fix any problems in your new home before you move in. Some builders, in fact, will offer to do their own inspections. But if you'd prefer a more objective appraisal, insist on an outside inspection.
Self-Education: Education is another good reason for getting an inspection. Most buyers want to learn as much as they can about their purchase so they can protect their investment. An examination by an impartial home inspector helps this learning process.
Ask if you can follow the home inspector on his or her rounds. Most inspectors are glad to share their knowledge, and you'll be able to ask plenty of questions.
Home buyers usually arrange for an inspection after signing a contract or purchase agreement with the seller. The results may be available immediately or within a few days. The home inspector will review his or her findings with you and alert you to any costly or potentially hazardous conditions. In some cases, you may be advised not to purchase the home unless these problems are remedied.
You could elect to include a clause that makes your obligation contingent upon the results of the inspection. If major problems are found, you can back out of the deal. If costly repairs are warranted, the seller may be willing to adjust the home's price or the contract's terms. But when only minor repairs are needed, the buyer and seller can usually work out an agreement that won't affect the sale price.
 
 

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity
REALTOR.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc

Understanding the Closing Process

 

On closing day, all parties will sign the papers officially sealing the deal and ownership of the property will be transferred to you. It's your opportunity to make any last-minute changes to the transaction.
The day before closing, be sure to gather all the paperwork you have received throughout the home-buying process: good-faith estimate, contract, proof of title search and insurance if necessary, flood certification, proof of homeowners insurance and mortgage insurance, home appraisal and inspection reports. You might need to refer to these documents at closing.
Most home-sale contracts entitle you to a walk-through inspection of the property 24 hours before closing. This is to ensure that the seller has vacated the property and left it in the condition specified in the sales contract.
If there are any major problems, you can ask to delay the closing or request that the seller deposit money into an escrow account to cover the necessary repairs.
 
 
At closing, your participation will be twofold:

 
  • Sign legal documents.This falls into two categories: the agreement between you and your lender regarding the terms and conditions of the mortgage and the agreement between you and the seller transferring ownership of the property. Be sure to read all documents carefully before signing them, and do not sign forms with blank lines or spaces.
 
  • Pay closing costs and escrow items.Borrowers handle the numerous fees associated with obtaining a mortgage and transferring property ownership in one of two ways: they either roll them into the principal balance of the new loan or agree to pay higher interest rates and have their lenders foot the bill. Some buyers may have to pay these out-of-pocket fees.

Present at closing
Closing procedures vary from state to state (and even county to county), but the following parties will generally be present at the closing or settlement meeting: 

Present at closing
 
 
Closing agent, who might work for the lender or the title company.
Attorney: The closing agent might be an attorney representing you or the lender. Both sides may have attorneys. It's always a good idea to have an attorney present who represents you and only you.
Title company representative, to provide written evidence of the ownership of the property.
Home seller.
The seller's real estate agent.
You, also known as the mortgagor.
The lender, also known as the mortgagee.

 
The closing agent conducts the settlement meeting and makes sure that all documents are signed and recorded and that closing fees and escrow payments are paid and properly distributed.
Closing documents
You will receive the following important documents:

Closing documents
HUD-1 settlement statement:
A detailed list of all costs related to the sale of the home. It is similar to the good-faith estimate you got weeks earlier, but the HUD-1 is not an estimate; it is a precise record of the settlement costs. Both you and the seller sign it. Compare the HUD-1 statement against the good-faith estimate to see if the actual closing costs differ significantly. By law, you have the right to review the HUD-1 24 hours before closing. Do so. Clear up any mistakes and resolve problems.
Final TILA statement:
You received the first version of this statement after applying for your mortgage. This final version outlines the cost of your loan and APR and takes into account any modifications made to your rate and points between application and closing. Make sure that everything is in order.
Mortgage note:
This document states your promise to repay the mortgage. It indicates the amount and terms of the loan, and what the lender can do if you fail to make payments.
Mortgage or deed of trust:
This document secures the note and gives your lender a claim against the home if you fail to live up to the terms of the mortgage note.
Certificate of occupancy:
If you are buying a newly constructed house, you need this legal document to move in.

 
Once you've reviewed and signed all closing documents, the house keys are yours and you will have successfully bought your new home!
 
 
 
 
 

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity
REALTOR.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

Why Use Lisa Otero as your Realtor?

 

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing. (or settlement)
 
 

1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity
REALTOR.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

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Coldwell Banker Mike Jones Company
4801 Gaillardia Pkwy 125 • Oklahoma City, OK 73142
Phone: (405)200-3193 • Fax: (405)604-2988




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