Oklahoma Real Estate Contract: Different Types and Key Terms to Include

What is an Oklahoma Real Estate Contract?

An Oklahoma real estate contract, commonly known as a Residential Purchase and Sale agreement, is a legally binding contract that is drafted when a buyer makes an offer on property that is for sale. If the seller accepts the offer, the terms of the contract are negotiated and then finalized in a real estate contract. The contract becomes legally binding once it is signed by both parties.

The purpose of a real estate contract is lay out the terms and conditions of the sale of real property. It will include tasks that must be completed by both parties before the sale is finalized. For example, buyers are required to secure financing for the property while sellers are required to provide required disclosures about the property to the buyer.

Disclosures are provided by using either the Oklahoma Appendix A Disclosure Statement or an Appendix B Disclosure Statement. These forms allow the seller to reveal any known defects about the property. Oklahoma is not a “buyer beware” state so disclosures a required part of an Oklahoma real estate contract.

Common Oklahoma Real Estate Contracts

There are several types of real estate contracts that are used in Oklahoma. The most common is the Oklahoma Real Estate Commission contract or “ OREC Version ”. This contract is template is approved by the Oklahoma Real Estate Commission and used for purchasing or selling residential property.

Other contracts are available for different kinds of property and purposes and include:

• Commercial real estate contract. Used when buying or selling commercial property that is zoned for business purposes only.
• Real estate assignment contract. Used when purchasing “distressed properties” as a wholesale investment strategy. This contract allows the buyer to assign the contract to a second buyer.
• Lease agreement. Use when a landlord wants to rent their property to a tenant for use.

4 Essential Elements of an Oklahoma Real Estate Contract

According to the Oklahoma statutes governing contracts, a valid real estate contract must include the following four essential elements:

1. Parties capable of contracting. There needs to be at least two parties entering the contract who are of sound mind, not minors, and not under the influence of drugs or alcohol.
2. Consent. Both parties must consent to be a part of the contract.
3. A lawful object. The contract cannot violate any state or federal laws or public policy.
4. Sufficient cause for consideration. Consideration is the exchange of items for value. In most real estate deals, consideration is when the buyer exchanges money for the title of the property.

Can You Back Out of a Real Estate Contract in Oklahoma?

Yes, it is possible to back out of a real estate contract in Oklahoma, but it typically requires specific conditions to be met. The most common way to back out of a contract is through the inclusion of a contingency clause.

A contingency clause is a provision in the contract that allows the buyer or seller to cancel the agreement if certain conditions are not met. For example, a common contingency clause is a home inspection contingency, which allows the buyer to cancel the contract if the home inspection reveals issues that the buyer is not willing to accept.

It should also be noted that in Oklahoma, there is a three-day right of rescission for buyers of residential property, which allows the buyer to cancel the contract within three days of signing without penalty.

Before entering a real estate contract, it is important to consult with a real estate attorney. An attorney will ensure that you understand all terms of the contract and know how to legally back out of the deal if an issue arises.