Joe Pryor.com Realtor Oklahoma Investment Properties

Preparation

Whether you are in the city, state, or out of state, the buying process can start as early as six months ahead of contract. The first thing you can do is sign up for an auto-email notification of homes that fit your profile. That profile can be adjusted as you go along, but in that process you can get familiar with what our market gives you to buy. It also can give you questions to ask us. If you want to know about the schools that take care of an area, distance to work, or other amenities, it lets us give you the answers you need so that the process will be easier by the time you are ready to physically look at your choices. To sign up go to www.homesearchbyemail.com and put in your parameters and we will start sending you listings in real time.

Representation

Oklahoma has statute law for real estate representation. previous to this was the law of agency based on the results of national court decisions on representation, making it common law. Oklahoma moved to stronger standards that are specific about how Realtors behave and act. The most used choice is Single Party Brokerage. This is like the old buyers agency with the addition of stronger wording about our responsibility to obey your wishes unless they are unlawful acts like discrimination or purposeful misrepresentation. Where it works well is when you qualify for a $225K home but you only want a $160K home. If we constantly show you $225K homes we are acting without ethics. Our job is to get you the house you want. Transactional brokerage is where you don't want or need advice, you just need someone to write a contract. Very few people would need this, so it shouldn't happen much. On single party brokerage you would sign an exclusive contract with a Realtor to represent you. The only exception is when I would be writing an offer from another realtor in my agentcy. In that case the company policy is for the sellers Realtor to move to transactional brokerage.

Making the Decision

Once you at the time to make a decision it normally would be within 60 days of occupancy unless you are wanting a new custom home which could take 4 months to a year to build depending on complexity. You should have chosen a mortgage company which we can help you with because in Oklahoma you need to be qualified by a company no longer than five days from contract acceptance. The normal process is to hone the acceptable houses to around 3 and revisit them a second time to look in great detail. I would show you comparable sales in the neighborhood and area to insure that pricing is right, and we would look at a sellers property disclosure to see if pre-exisiting conditions might effect resale. Structural issues would be the most problematic. We may want one final look before contract offer.

Contract Time

When the offer is written it is done with contingencies. Contingencies include an acceptable appraisal of value by an independent appraiser, and inspections for the house including electrical, mechanical, plumbing, structure, and pests like termites. You may want to specify environmental inspections at the time of contract. The offer should be biased in your favor but my advice is to never insult the seller by offering a very low offer. If we have done our homework and the house could be worth the $200K they are asking, a $100K offer doesn't start the negotiation in good faith. By law I am required to write that, but it normally stops communication. Hopefully we will get the price where you move in with equity beyond your down payment.

Inspections and Appraisal

The mortgage company will get an appraiser from a pool so that there is no collusion, and the appraisal has to be for at least the purchase price or the contract is void and subject to renegotiation. You will choose a home and pest inspector from a list because a Realtor who tells you to use only one is quality of possible collusion. You want the inspectors to give you fair estimates of repairs and they should be within the limits you set in the contract. If they are greater again you can at your request renegotiate the contract for the added repairs. The repairs should be done by licensed contractors if required. A homeowner doing the repairs is unacceptable. You want warranties from the licensed repair people.

Closing and Possession

Closing and possession are often negotiated separately. Be mindful that Oklahoma is a table funding state. That means that when papers are signed, you bring the certified funds for your down payment and closing cost, and the mortgage company funds, then at that moment you own the house. Hopefully you have reasonable sellers and you are too. The seller doesn't want to move out before closing in case you back out, and that has happened. Often the seller is buying another house locally and can't move until they close on their property which is contingent on you closing. It is not an exact science, but it should be decided before you are at the closing table. There is lots more to this process, but that is the detail you and my team will go over during the process. Remember, if you want to get started go to www.homesearchbyemail.com and we will start you up.

I listened to a statement by John McCain that Fannie Mae and Freddie Mac were the beginning of the end for our current economic malaise. Certainly the housing crisis is the first of the many economic problems that has surfaced, but more is on the way. The current margin calls on Wall Street has taken down important CEO's as they had to sell stock, and it was recently announced that 10% of all credit card balances will not be collected. Obviously we have tremendous problems worldwide, and more has to be done beyond 700 billion to bring confidence to the banks and financial firms. Since the housing problem is from and center, and since I don't pretend to be a famous economist, so let me stay with my area of expertise, real estate.

The states where most of the overheated real estate prices came apart have more than just dropping home values to look for. Areas like Southern Florida, Nevada, and California are also experiencing higher levels of unemployment. All this adds up to lower revenues, less services offered citizens, and when combined with higher interest rates at present, this becomes a lethal combination that works together to drive prices down further. Even though prices in places like Florida have seen 40% to 60% drops in prices, believe it that prices should fall further based on the economic method of appraisal. At the time home prices in areas like this are running 22 times rental prices. The national average for the last twenty is 15 times the rental average. This would support another 15% drop in value. What happens then? With dramatic changes in guidelines for appraisal and mortgage qualification will help keep prices flat. So if you are investing in real estate where do you go. I know I am biased but Oklahoma should be a top choice.

Besides bias it can be helpful to point out a few statistics. Oklahoma City MLS listings show that only 6% of all listings are distressed property. Compare this to the over 50% of all listings as being distressed in Los Angeles, Las Vegas, Cape Coral Florida among others and you see an obvious contrast. next look at rental prices. In a study of the over 500 rental homes I have sold show a 12 times to value price ratio. If the long term national average is 15 times then if you are looking for an undervalued market, then Oklahoma City fits the bill. I have seen a dramatic drop in my stock and fund portfolio, but every property I own has positive cash flow. The Federal Government shows that the first half of 2008 has Oklahoma leading the nation in the rise of the average price of a home sale. Bias is always okay when you have facts to back it up. Stable prices with upward mobility and positive cash flow is a safer way to build up your income and retirement. We have both residential and commercial investments, so fill out a form on this site with what you might be interested in and we will reply. It hasn't always been this way but for the last five years it has been good to be in Oklahoma and that is still going on.

Looking at statistics for Oklahoma City home sales and the surrounding suburbs there is much to be happy about. Homes below $150,000 still show a strong buyers market. In Edmond, under that price range shows a 2.86 month absorption rate and up to $200,000 is still below the six months neutral absorption rate. Rents are up for my clients this year about 10%. With that rental price to home value you can make a case for a 15% increase without exceeding the national average rent to purchase price. There are certainly pockets of overbuilt new homes, especially if you have above 3000 square feet in distant areas from schools and businesses. Carl Tiemann of First Mortgage reports that their firm had one of their best October's ever, so in popular and affordable areas people are buying and credit exist. But the key to good health and a great to avoid the flu is to get a flu shot. Oklahoma City housing needs the equivalent of a flu shot to insure that we can continue our steady growth that has led the nation in the rise of the average price of a home.

First, Oklahoma as a state needs to put money into the electrical infrastructure to not only delivers more wind power to our major cities, but also to be able to export it like out natural gas and agriculture industries. Secondly, we need as a city to invest in light rail. Gas prices cannot stay down for long and the cities like Houston, Seattle and Phoenix for instance are connecting their cities taking pressure off traffic, and allowing people to reduce their expenses. Bu doing that, people can spend more on consumer goods that help create employment. We also need more name brand higher quality stores that have an appeal as amenities to businesses. When I leave Houston after my cancer treatment is over, the one thing I will miss is going to Whole Foods and Central Market. It takes us at least four supermarkets in Oklahoma City to do what we can do at Whole Foods and still at a lower quality. This will require that we change our sadly outdated liquor laws to allow wine and strong beer to be sold outside of liquor stores. It wouldn't hurt to have better retail stores also. I know that Houston is a bigger and more culturally diverse, but when you go to The Galleria and surrounding areas you can shop for name brands that are known world wide. We have made a great recovery due to being the state capital, the resurgence of the energy and agriculture industries, the expansion of Tinker Air Force Base, and the brilliant leadership of David Boren who is leading the creation of what will be one of the top cancer centers in the U.S. As a native Oklahoman it is time to take pride in being elite, and having our economy reflect that.

A new era begins Wednesday in Oklahoma. Our new NBA team starts playing in the Ford Center. I have linked an excellent article about how this happened from The New York Times. It points out that The Thunder will not make a huge financial impact on Oklahoma City especially in light of the 20 Billion that Devon and Chesapeake Energy Companies bring to the state. It does point out that Oklahoma City is the new role model for the NBA. As someone who grew up in Oklahoma City I completely understand David Stern's reasoning. Oklahoma City in the 1950's and beyond has been a cultural and intellectual wasteland. One of it's chief industries was telemarketing. Why? The high divorce rate caused a fertile recruiting ground for low paid single mothers who could work on a flex time schedule. As the article points out, The Murrah Building Bombing caused a unification of the city to recreate it into a new identity so we wouldn't be the city of domestic terrorism insanity. The unity crossed economics, race, and geography. We funded the two MAPS projects that revitalized downtown Oklahoma City and the Oklahoma City school systems. We expanded out airport for more direct flights that appeals to business men who want to relocate, and we created an empowerment zone that gave significant tax breaks to companies like Dell Computers to come to a lower cost market with a capable work force. Our housing market is still stable with only 6% of MLS listings being distressed properties. However, we can still become complacent. The resurgence of the energy industry that flourished until 1982 has brought incredible wealth to Oklahoma is softening. Some predict oil going down to $45 a barrel and natural gas which has gone up in inventory to also slide. We did the above things to not be dependent on energy. We have a lot more work to do to go from an emerging city to a vibrant city that has a balanced economy. As I previously blogged, when I go around Houston shopping I realize that a CEO's wife is going to tell her husband about what she likes to do that is better in Houston than our city. When we went to Whole Foods yesterday not only did we get better good in one place, we also got vitamins, aloe juice, and supplements that i would have to go to a health food store for in OKC, and bread that only a Oklahoma City bakery could satisfy me with. My apartment is in walking distance from five significant museums, IMAX theaters, three parks, and bike trails. We are moving in that direction but we need to pick up the pace. One professional sports franchise does not transform a city although it is a major accomplishment. Higher pay for our teachers, changes in liquors laws to allow even Walgreen's to sell wine which is a convienience, having more amenities to attract business all create jobs that increases consumer spending that brings in more jobs. Although Starbucks is not the factor it once was, when Seattle based Boeing moved to Chicago instead of Dallas there were obvious factors like the flight schedule from airports, office vacancy rate, but the number of Starbucks locations was considered in the process. It was not that quality of coffee made the difference, it was more an indicator of what this showed was beyond the obvious factors. Out anti-intellectual, anti-growth s has diminished, but it has not gone away. It is time to push down on the accelerator pedal to go to the next level. Go Thunder!!! Go Oklahoma City!!!

In 2012 Devon Energy will light up the Oklahoma City skyline with a 54 story Tower. The appraised value of the building is 750 million dollars. Back in the 1990's when we did the initial MAPS(Metropolitan Area Projects) that infused the first 350 million dollars for downtown renewal with a one cent voluntary sales tax could we have expected another 2.5 billion invested in downtown, then this. "it's a big deal" was the understatement by Brett Hamm, the President of Downtown Oklahoma City Inc. 7.5 million dollars in extra annual tax revenues will flow into our coffers just from this building. It will be the tallest building in Oklahoma. Larry Nichols, the visionary head of Devon Energy will also put money into the creation of a new downtown park, and other funds will be used for overhauling the Myriad Gardens as well as improvements to the neighborhood surrounding the Tower. This will also have an affect on bringing up property values around it. The Tower will create TIF (Tax Increment Funding) to do the park and other non-profit downtown projects. With the Devon Tower and the master plan community surrounding the Chesapeake Energy Campus, both of the huge independent energy companies are transforming the landscape of the Downtown and Northwest Oklahoma City areas. Both of these companies have put an extreme emphasis of not only creating hundreds if not thousands of high paying jobs, they are also contributing to the quality of life in our city, and backing cultural events and centers that we can be proud of. It is gratifying that when I have investors come in from other states and other countries, that when they see Oklahoma City with fresh eyes, they marvel at the progress, the many construction projects, and see what i see, a great place not only to live, but a great place to invest in both residential and commercial real estate. As a native Oklahoman, I will live to see this magnificent building, and the most important American Indian Cultural Center on 360 acres completed in the next four years. We will be able to point with pride that no longer will we be just known for the terrorist attack on the Murrah Federal Building, but like the fabled Phoenix, a city that rose above tragedy to show that when people come together in Harmony and singular purpose, the best is yet to come. Please come and visit and let me show you around. It will be my privilege.