Hey welcome back, I’m Marcie Billen – a real esate agent in the south Oklahoma City metro and here’s part 2 of my explanation of the Oklahoma real estate contract. If you missed part 1 of the real estate contract explanation, be sure to check that out! Now let’s get to it! In this section, we’ll be covering pages 2-3 of the real estate contract.
Accessories, Equipment & Systems
I get questions about this a lot, but the biggest question I get with accessories, equipment and systems inside the house is “does the stove stay?” Most of our stoves are freestanding instead of a built-in, and yes, the stove does stay. There is a whole list of items at the top of page 2 of the real estate contract that are automatically included with the sale of the home, unless stated otherwise in the exclusions section.
Additional Inclusions: If there’s anything that you want to include with the house, it’s going to go on this section. Those inclusions typically are washer, dryer, and refrigerator, if the seller is offering those or would like to leave those. Sometimes we can’t reach that agreement.
Exclusions: Exclusions that I typically see are above ground pools, maybe a hot tub, or playground equipment for children. Of course, you don’t have to ask for anything to be excluded.
Time Periods Specified in Contract
The beautiful thing about this Oklahoma real estate contract is that it really lays out the timeline for the contract itself. With the timeline for the real estate contract, we have a time period for investigations, inspections and reviews, and financing supplement. It will say what day that’s going to commence on and I typically write a date in here. I like to start it on a Monday, but it depends on when we went under contract. Otherwise, the time reference date shall be the third day after the last day of signatures of the parties.
Residential Property Condition Disclosure
Whenever you’re putting in an offer in a house, this is the second document that I will send you to sign and it’s a three-page document. It’s mainly something that protects the seller from litigation, so you’re telling the buyer about the defects in the property that you know about. “No representations by seller regarding the condition of property or environmental hazards are expressed or implied other than as specified in the Oklahoma residential property condition disclosure statement or the disclaimer statement. A real estate licensee has no duty to the seller or buyer to conduct an independent inspection of the property and has no duty to independently verify accuracy or completeness of any statement made by the seller in the disclosure statement and any amendment or the disclosure statement.” I highlight that because it’s so important that you, as the seller, especially fill out that disclosure statement to the best of your ability and do not lie. Do not lie on that document because it will bite you in the butt later.
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Investigations, Inspections and Reviews
Here’s where we have the start date for our investigations, inspections and reviews; how long we have to do investigations on the house. Depending on the length of the real estate contract, I write in 10 to 15 days for these.
There’s a non-exhaustive list of the types of inspections you can get on house. Basically, you can get an inspection for anything you want, but usually, it’s a home inspection, roof inspection, and/or structural inspection.
What do we do with that inspection report that we get on the house? (We highly, highly recommend the inspection, by the way.) It is not required by law to get an inspection on the house, which is a huge misconception I hear from buyers and sellers all the time, that you have to get an inspection by law and it either passes or fails – that is not the case, you do not have to get an inspection and it does not pass or fail, we just see what’s going on with the house. And then, we’ll deliver the report to the sellers and we’ll talk more about that in the next section.
Treatments, Repairs and Replacements (TRR)
You may know the phrase TRR if you’ve bought and sold a house before. I really try to call it a repair list and not a TRR because you’re not a realtor and you probably don’t do this every day like I do.
Treatment of termites and other would destroying insects: basically, treatment of termites is something that we deal with in a TRR, but oftentimes we put it also in the actual offer itself because you definitely want to make sure that you get that treated one way or the other.
Treatments, repairs and replacements review: Twenty-four hours after your inspection period is over, we can deliver a TRR, or repair list, to the seller asking for things to be repaired that are a defect. Defect means “a condition malfunction or problem which is not decorative that will have a materially adverse effect on the property or the value of the system or the component.” It can’t be something like carpenter paint, unless the paint is like peeling on the outside. Buyers and sellers typically have 7 days to come to an agreement about that. So, we deliver the repair list to the seller if you’re the buyer and then we have seven days to negotiate this out. After seven days then it should be done, usually it gets done way faster than that and if we need more time, then we just go ahead and sign an extension.
Download a copy of the Oklahoma real estate contract
Expiration of Buyer’s Right to Cancel the Contract
So, this is probably the question that you’ve been waiting for. How do I get out of this real estate contract if I am a buyer and I don’t want the house anymore? or something came up in the inspections that was just too much?
“Failure of buyer to complete one of the following within the time periods and investigations inspections or reviews paragraphs shall constitute acceptance of the property regardless of its condition.” So, what it’s saying is we have to perform these actions, or we can’t cancel the contract. That’s what your realtor is for – to help you through this and to make sure you’re staying on task with the dates in the real estate contract. You’ve got to perform your investigations during the time allowed; very important. You’ve got to deliver a written version of the repair list form of items to be treated, repaired or replaced, OR you have to cancel the contract within that time period. You as the buyer, can cancel the real estate contract and get your earnest money back at any time during the investigations portion. That’s typically 10 to 15 days for the inspection period, all the way up until you have a signed repair list by both buyer and seller, which is usually another week. You can get out of the real estate contract at any time during that period and you can get your earnest money back, but you do have to pay for things you already ordered during the real estate contract like any inspections or the appraisal if it already happened.
Watch this video for an in-depth explanation about earnest money.
Another way to get out of the real estate contract if you’re a buyer after expiration of the time periods and investigations inspections and reviews paragraph is the “buyers inability to obtain a loan based on unavailability of hazard insurance coverage shall not relieve the buyer of obligation to close transaction.” So, if you can’t get hazard insurance, meaning home insurance, on the house and you don’t find out until after the inspection period is over, then that does not give you the right to get out of the real estate contract unless your hazard insurance puts you over what you can qualify for on a loan. It’s very interesting on that and that really rarely happens, but that’s why we do the investigations period; to make sure that you can get home insurance on the house.
“After expiration of the time periods and investigations inspections and reviews any square footage calculation of the dwelling including but not limited to appraisal or survey indicating more or less than quoted shall not relieve the buyer of the obligation to close this transaction.” If you’re really worried about the square footage of the house, you better get it measured during the inspection period and not just during appraisal because the appraisers do measure it.
Inspection of Treatments, Repairs, and Replacements and Final Walkthrough
Of course, if we ask for things to be fixed, then we need to make sure they’re fixed before you finally sign the documents at the closing table. “Buyer or other persons buyer deems qualified may perform re-inspections of the property pertaining to treatments repairs and replacements.” Typically, it’s just you, as the buyer, like looking and making sure things got done. Sometimes it’s us, as a realtor, and we take video or get pictures for you.
“Buyer may perform a final walk-through inspection which seller may attend. Sellers shall deliver property in the same condition as it was on the date of which contract was signed by buyer subject to the TRR repair list. All inspections and re-inspections shall be paid for by the buyer, unless prohibited by the mortgage lender.” Usually, those inspections don’t call for anything that requires payment, but that doesn’t mean it never happens.
Risk of Loss
This is homeowners’ insurance, so “Until transfer of title or transfer of possession risk of loss homeowners’ insurance ordinary wear and tear excepted, shall be on the seller”. The seller has to keep the home insurance on the property until the buyer signs the papers and it’s funded.
Acceptance of Property
“Buyer upon accepting title or transfer of possession of the property (once you sign everything) shall be deemed to have accepted the property in its then condition”. You can’t go back to the seller and ask for anything else at that point.
That’s it for part 2 of the Oklahoma real estate contract series. I have one more post coming out about that will be covering the last 3 pages of the real estate contract, so be sure to keep an eye out for it! If you have questions or would like to book a free consultation with me, feel free to reach out! Marcie Billen | [email protected], 918.691.8982.
