EP 14 - Contracts Part 1 - a podcast by Brian Cook And Kindra Cox

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

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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.

Further episodes of The Brian and Kindra Show

Further podcasts by Brian Cook And Kindra Cox

Website of Brian Cook And Kindra Cox