You’re buying or selling a residential property in Oklahoma and you just want a basic form – you want to keep real estate agents out of the transaction and save everyone 3 to 6 percent. Most people are searching for the standard Oklahoma Real Estate Commission (OREC) residential property sale contract. OREC hosts all of their forms here. The basic residential sale form contract is used in almost every sale of residential real estate in Oklahoma. If you hire a realtor, they will more than likely fill in the blanks on this form.
You may ask whether a realtor is necessary at all. If you plan to sell by owner (for sale by owner, or FSBO) without a realtor, an attorney can review any contracts or offers and provide legal advice for a basic hourly rate. In fact, the only thing a realtor can do that an attorney cannot is list the property on the MLS. If you plan to buy or sell an FSBO property, and you want some help with the transaction process, feel free to reach out to us. Even if both the buyer and seller hire an attorney, each party can still save significant transaction costs, because they would not be giving up a percentage of the overall purchase price.
Here are some (but not all) of the key terms you should understand when using the basic OREC residential property sale contract:
- Risk of Loss. This term is crucial – it determines who bears the risk (think financial burden) if the property is damaged or destroyed before closing. The default term transfers the risk when possession or title is transferred to the new owner. There are major problems with this ambiguous language, so it’s best to protect yourself by obtaining an insurance policy on the property before you walk into your closing.
- Mandatory Mediation. Most people want to immediately file a lawsuit when something has gone wrong with their sale. This term requires all disputes related to the contract to be submitted to mediation before filing a lawsuit. This is not necessarily a bad term, as it can save parties the expense and hassle of going to court. Just know that you may not be able to immediately file a claim when a problem arises.
- Acceptance of Property. This term is harsh – once you complete closing, you accept the property in its “as is” condition. This means that if the sellers damage or trash the house the morning of closing, but the buyers did not inspect the house on the way to the closing, the buyers could be stuck with paying the full price as negotiated but receiving a trashed property.
Problems frequently arise when parties use a purchase contract form without reading it or understanding it. Un-modified forms can introduce strange language and terms that are not ideal in your unique case. You should always know the terms of any contract you sign, and especially the contracts involving your biggest financial investment (a home). Our firm has helped countless buyers and sellers navigate the standard OREC purchase contract. Contact us if you have any questions about the terms, the process, or anything else related to your sale.