Oklahoma Real Estate

What real estate investing secrets will make me rich?

Late night infomercials are infamous for promoting real estate investing secrets but do they really work? Before paying hundreds or even thousands of dollars to purchase a "system" or set of books and DVDs, take time to objectively evaluate the program. Most real estate investing secrets are no secret all – simply information that you can learn on your own...often for FREE! Here are some of the more popular "secrets" and "insider tricks" including information the late night gurus don't want you to know!

Secret #1: Save money by buying a foreclosure for pennies on the dollar.

Reality: While it is possible to save thousands of dollars buying foreclosures or pre-foreclosures, the average savings is 5 to 20 percent. Exceptional situations where a house sells for 90 percent of its value typically have extenuating circumstances such as a large second mortgage or other liens including real estate taxes, major repairs or other issues that become the responsibility of the buyer.

Secret #2: Where to find foreclosures or the secret foreclosure list.

Reality: Foreclosures can be found everywhere so there is no need to buy an expensive list. Banks, government underwriters and lenders are eager to supply the information for free in order to have the greatest number of bidders competing to purchase the properties. HUD, REO and the Clerk of the Court in your area will typically have information on real estate loans gone "bad" and Oklahoma homes for sale in a foreclosure. Check around to find out which brokers work with foreclosures in your area and ask to be put on their mailing list.

Secret #3: How to locate pre-foreclosures and buy before the lender takes the home back.

Reality: Knocking on the doors of total strangers offering to buy their home before the bank forecloses isn't for the faint of heart. Assuming you have a strong capacity for rejection, lenders are required to file specific documentation during the process of foreclosure. This list is typically free or available at a minimal fee at the local Clerk of the Court.

Secret #4: Tax Certificates are a great way to make money and obtain property for a fraction of the cost.

Reality: Tax certificates do not convey title to the property! Instead, you are simply paying real estate taxes on a property for someone who hasn't paid taxes in exchange for a stated interest rate. The interest rate and other terms vary from state to state but in all cases, a property owner can repay the taxes with interest to "redeem" the property. If the property owner fails to do so within a given period of time then tax certificate holders may request the property be sold. The tax certificate holder must bid just like others and the successful bidder becomes responsible for all liens, real estate taxes and other fees levied against the property. In most cases, property owners allow a property to go to sale because more is owned on it than the value of the property. The real estate notes and tax certificate sales are publicized by the county and available free of charge.

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What OK real estate resources are good to know about?

Whether you are searching for Oklahoma new homes or pre-existing Oklahoma real estate the following resources are a great way to begin.

1. Homes & Land. The nationwide Homes & Land real estate listing services is available online and in print making it a premier destination to everyone seeking to buy or sell real estate. Find an agent or your next home in one easy step with the www.homesandland.com search tool.

2. Oklahoma Real Estate License & Broker Search. Visit the Oklahoma Real Estate Commission (OREC) to make sure your real estate agent, broker and other professionals are up to date on their training and have a clear record of customer satisfaction by visiting www.ok.gov/OREC/

3. Oklahoma Appraisers Search. Find a certified appraisal and check for complaints or pending disciplinary action before hiring an appraiser at the Oklahoma Real Estate Appraisal Board website located at http://www.oid.state.ok.us/REAB.asp.

4. Oklahoma 2-1-1. Find Answers fast with Oklahoma 211 service including assistance for elderly and disabled citizens who need home repairs or energy assistance.

5. SNAP for Seniors. Oklahoma seniors who need safe and affordable housing can find out more information or apply for assistance by visiting http://snapforseniors.com/.

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How can I afford to buy a home?

Millions of people qualify for special financing programs, down payment assistance, grants and other funding but don't know it! Take a look at the list below to see if you might be eligible for assistance in purchasing Oklahoma real estate.

Low Income: Low income households may qualify for down payment assistance, low interest rates and even subsidized mortgage payments through various FHA loans. For more information or to find out if you qualify, visit http://www.newbidselect.com/servlet/RouterServlet?p_build_page=PSPropertySearchCriteria&siteid=62519&p_state_listings=OK.

Law Enforcement, School Teachers and EMTs or Firefighters: Ask about the "Good Neighbor Next Door" program which offers substantial discounts of up to 50% from the list price of a home. You must agree to live in the property as your sole residence and meet other eligibility requirements to participate. For more information visit http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm

Elderly/Disabled: Many Economic Development, city and county programs throughout the nation have grant money available to help the elderly or disabled purchase or repair a home. Speak to a real estate agent or case worker in your community for more information.

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What is an assumable mortgage?

Assumable loans used to be a popular type of real estate loan that were a great deal for the buyer and seller alike. Although most modern real estate loans are not assumable, it never hurts to ask. Occasionally you might find a seller holding an assumable mortgage which can save you thousands, or even tens of thousands, of dollars over the life of the loan. Here is how it works...

When you obtain a new mortgage the loan is amortized over the term of the loan. Interest payments comprise the majority of the monthly payment at the beginning of the loan with very little going toward paying down the principle of the loan each month. By assuming a real estate loan from someone else, they have already paid the highest amount of interest so you are able to pick up where they left off. For example, let's assume the property sold for $100,000 at 6.75 fixed interest rate for a 30 year term. The total amount of interest paid would be $133,495 plus the original $100,000 for a total of $233,495 over the entire 30 year period.

In our example, the seller has owned the property for 7 years and decides to sell the home for $125,000. The balance owed on the home has been paid down to $90,790 although the seller has made 84 consecutive mortgage payments totaling $54,480. That means less than $10,000 went to paying down the principle while over $44,000 went toward interest payments. There are 23 years remaining on the mortgage.

If the buyer were qualified to assume the existing mortgage then they would simply pick up where the original seller left off – saving all of the interest payments for a seven year period of time! To make this work several things must be in place including:

1. Eligible Mortgage and Buyer. Even if a mortgage is assumable, the buyer must meet certain eligibility requirements to qualify.

2. Second Mortgage. The buyer must cover the difference between the existing mortgage and the selling price of the home. In the example above, the seller was asking for $125,000 and the mortgage was paid down to $90,790 leaving a balance of $34,210 which the buyer must come up with. A down payment, second mortgage or other funds must be available to make up the difference for the deal to work.

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When do the new FHA limits expire?

The recently announced Economic Growth Package proposed by President Bush would help nearly 250,000 families obtain FHA insured mortgages to purchase or retain farm property and other rural Oklahoma real estate.

While most proposals on the block center on the needs of inner city or suburban home owners, the current proposal would allow HUD (Housing and Urban Development) to underwrite loans via the FHA program to those outside of the sub-prime industry including farming communities. The newly revised FHA limits allow up to $729,750 of funding for very high cost areas which will revert back to $362,790 in January of 2009 unless an extension is approved by Congress.

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Does the federal government owe me money?

Oklahoma real estate owners who obtained a FHA-insured mortgage to purchase a home may be eligible for a refund from the federal government. The refund is to compensate for a portion of the insurance premium plus any excess earnings associated with the original loan. To receive the refund you must have met the following requirements:

• Obtained an FHA mortgage after September 1, 1983.
• Paid an up-front mortgage related insurance premium during the closing process.
• In good standing or never having defaulted on the mortgage payments while you held the loan.
• Assumed a loan that met the original qualifications.

U.S. Department of Housing and Urban Development

P.O. Box 23699

Washington, DC 20026-3699.

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Can I save money listing with a flat fee service?

Flat fee listings sound like a tempting way to save money when selling Oklahoma real estate but think twice before taking this route; flat-fee often save less money than you might think and may require a lot more additional work. Learn how to make an informed decision when evaluating flat-fee services by using these helpful tips.

1. Appreciating Markets Make It Look Easy. When the prices of Oklahoma new homes were increasing weekly then it was easy to find buyers - it seemed everyone was searching for a home or investment property. Houses were selling in weeks instead of months but that isn't the norm. Historically it takes an average of six months to sell a home and the longer a house is on the market the more the price drops.

2. Splitting Sales. Typically when a home is listed with a traditional real estate agent, the commission is split between the listing broker/agent and selling broker/agent. To attract attention to your home it will be necessary to offer an incentive to show the home so you may save less than half the amount originally anticipated. For example: let's assume you listed a home priced at $200,000. The listing agent and broker would receive roughly 3 percent (or $6,000) and the selling agent and broker another 3 percent (or $6,000) with a 6 percent commission structure. Listing with a flat fee agency would save the listing portion but most sellers still need to provide some type of incentive for real estate agents to show the property. Since many flat-fee agencies charge $1,000 or more the total savings would only be about $2,000 in exchange for taking on a great deal more work.

3. Missed Opportunity. One of the benefits of working with a qualified real estate agent is the ability to show the home even if you are at work. Especially in a "buyer’s market" it is important to provide a quick response and superior service when home buyers are searching for Oklahoma new homes. Missing calls, rescheduling showings or missing work to show a home quickly becomes a problem for many would be home sellers.

Take time to calculate the real cost and expected savings before making the decision to go with a flat fee listing service. It might cost you more than you realize in the long run!

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