Guide to Residential Real Estate Transactions in Oklahoma

Residential real estate in Oklahoma is a great investment, whether you’re buying a primary residence, vacation property, or investment property. Oklahoma homes are often less expensive than surrounding states and Oklahoma has a stable economy with low unemployment rates. This article will give stakeholders an overview of various aspects of residential property purchases and sales in Oklahoma.

While some stages of a commercial real estate transaction will be similar to these steps below, commercial deals are treated differently under Oklahoma law. Click here if you’re looking for our commercial real estate transaction guide.

A note on all OREC forms cited in this article and on our firm’s website: The Oklahoma Real Estate Commission forms are a great starting point for all residential real estate transactions in Oklahoma but may not offer the full protection that one or all parties seek in their written agreements. Parties should consult an attorney before trusting that these forms contain all necessary or desirable terms. 

Disclosure as a Mandatory First Step

Sellers of residential property are required to make certain property condition disclosures in Oklahoma. Some sellers may be exempt. Check out our article on the Oklahoma Residential Property Condition Disclosure Act.  

Standard Form Contracts

Almost all residential real estate transactions in Oklahoma are performed using the Oklahoma Real Estate Commission (OREC) standard residential form contract. These forms are all extremely similar to each other but have variations for established residential property, new home construction, and vacant lots and vacant land

Custom Contracts

Parties are not required to use the OREC form contracts for their residential property sales in Oklahoma. Buyers and sellers are allowed to use their own custom agreements and frequently do so in “for sale by owner” contracts.

However, Oklahoma law does require that any agreement for the sale of real estate (or any interest in real estate) is written and signed by the parties in order to be enforceable by the court; this is known as the “statute of frauds.” The custom contracts must also have certain essential elements of an agreement before a judge will uphold and enforce the contract; at a bare minimum, these elements include a purpose (sale of the real estate), parties (identifiable names/entities of the buyer and the current owner as seller), and a purchase price. 

Contingencies in Oklahoma Real Estate Contracts

Buyers should strongly consider using contingencies in their written offers. Standard OREC contracts have built-in inspection rights (discussed below), which are a form of contingency; effectively, the buyer has a right to terminate the agreement if the inspection is unsatisfactory.

However, buyers can protect themselves with additional contingencies, with the most common being a financing contingency. See OREC’s forms for conventional loans, FHA loans, VA loans, and USDA rural housing loans. With a financing contingency, the buyer is able to terminate the purchase agreement without penalty if the buyer is unable to obtain a sufficient mortgage loan. 

Loan Preapproval

Buyers can also make their offer more competitive by providing the seller with a written preapproval for their anticipated loan amount. Preapproval is not required in Oklahoma. Sellers should beware of this approach; even if a buyer has a preapproval from a reputable lender, preapproval is not a final loan commitment.

We have seen buyers attach preapproval letters to their written offers to purchase a property, include a financing contingency, and eventually terminate the agreement based on inability to secure a loan for the same amount listed in the preapproval letter. 

Conditions in Oklahoma Real Estate Contracts

Savvy buyers also protect themselves with conditions. The most common contract condition includes a buyer who wants to first sell their own current home before being required to close on the new home (known as a “Conditioned on Sale”), either for another home that is already under contract or not yet under contract

Sellers have the power to decline to accept an offer which contains a conditioned on sale term or demand that the buyer remove their condition (and if not removed, terminate the contract). 

Winning the Negotiations and Getting Under Contract

Parties frequently make subsequent offers and counteroffers after the buyer makes the first offer. By Oklahoma law, each counteroffer operates to automatically terminate the most recent offer (or counteroffer). When you make a counteroffer to the opposing party, you are effectively starting the offer and acceptance stages over again from the beginning.

Residential home buyers can also use an automatic escalation strategy which can eliminate the need for constant back-and-forth counteroffers. In a multiple offer situation, buyers can use this approach to make their offer stand out from other interested buyers. 

Backup Offers

Sellers can technically be “under contract” with more than one buyer at a time. The Oklahoma Real Estate Commission provides a standard contract supplement whereby sellers can accept a backup offer. The backup offer would only have effect if the seller’s first contract falls through or is terminated. 

Earnest money – The Right Amount in Oklahoma

There is no set rule for the amount for earnest money required in Oklahoma but there are local norms. See our article on earnest money and how much may be appropriate for your transaction.

Alternate Real Estate Purchase Structures

Sometimes, the parties do not want (or possibly cannot afford) a straight-forward purchase and sale. We frequently have clients request different purchase arrangements such as seller finance, lease-to-own, rent-to-own, lease option, lease-purchase, contract for deed, and more. While these methods often create more risk for the parties than a standard transaction, the attorneys at Avenue Legal Group are experienced at finding creative solutions for residential transactions with non-traditional financing.

Title Insurance

For buyers who will use bank loans and financing to purchase their target property, title insurance will often be required by the lender. However, title insurance can be a good idea for cash transaction buyers as well. The cost of title insurance is usually paid directly to the title company at closing, in a one-time payment, and the cost of the policy is directly related to the amount of needed coverage (which is determined by the market value of the home).

Property Inspections

Oklahoma law uses a caveat emptor, or “buyer beware”, approach when it comes to all real estate transactions. This means all buyers are encouraged to take the opportunity to carefully inspect (either themselves or by paying a licensed inspector) their target property – including as many types of due diligence as the buyer needs to satisfy themselves with the condition and status of the property. This should include a physical home inspection, termite inspection, legal title inspection, appraisal, and more.

There are a few exceptions to the typical buyer beware method in Oklahoma, including the Residential Property Condition Disclosure Act. Check out our article on the RPCDA for more information.

While some licensed home inspectors charge a very low flat fee for inspecting your property, usually based on the square footage of the home, buyers should not necessarily be looking for the lowest cost. A good inspector will be able to inform buyers of the property’s faults, code violations, out-of-warranty appliances, and more. 

In a competitive market with multiple buyer offers, some buyers may waive their right to an inspection; in that case, the buyer loses their ability to terminate the purchase and sale agreement based on inspection of the physical condition of the property. If you are buying a property using traditional bank financing or loans, your lender will likely require an inspection of the property by a licensed home inspector.

Inspecting Title and Quiet Title Actions

Buyers should always check the status of the legal title of their target property. This should include a review of all deeds, mortgages, liens, assessments, covenants, and matters of public record to ensure that no one else can claim ownership of the home or land. 

Buyers at an Oklahoma county tax sale, a county sheriff’s auction and foreclosure sale, or an off-market listing should be especially careful to investigate the chain of title before bidding or closing a sale. Avenue Legal Group offers simple flat fee rates for quiet title actions and pre-auction title search due diligence.

When you first provide a copy of your contract and the earnest money to a title company, they should begin work on preparing an initial commitment for issuance of title insurance, usually called a “title commitment” or “title report.” The title commitment will contain a section of requirements; you may see “complete quiet title” as one of your numbered items which must be completed before the title company will close the transaction. If that happens to you, contact us to get your quiet title lawsuit started.


Similar to title insurance, real estate buyers using bank loans and financing to purchase their target properties will be required to have the home appraised before the loan will be funded. The appraisal will confirm for the bank that their mortgage loan is adequately secured (i.e. the home (asset) has a market value that exceeds or is equal to the value of the loan). 

In the last few years, we have seen residential buyers make purchase offers which exceed the value of the home, creating a “gap.” In a gap situation, the lender will not give a loan for the full purchase price of the home, leaving the buyer to come up with enough cash to cover the gap and complete the closing. If the buyer is unable to fund the gap, the buyer may be required to breach the contract and forfeit their earnest money. However, smart buyers prepare for this possible situation by including special terms in their written offers, such as a financing contingency and special gap provision. 

Treatments, Repairs and Replacements (TRRs)

Once the buyer is under contract and conducts a home inspection, the buyer may want to request that the seller repair certain defects before agreeing to close the sale. See our article on treatments, repairs and replacements (TRRs).

Terminating a Real Estate Purchase and Sale Agreement

Buyers and sellers may want to terminate their real estate contracts due to physical condition, status of the legal title, conditions, contingencies, financing, or other reasons. See our article on how, when, and why to terminate a residential real estate purchase and sale agreement in Oklahoma.

Earnest Money Disputes

Once a party decides to terminate a residential real estate purchase contract in Oklahoma, the most common issue becomes the question of “which party is entitled to the earnest money?” Usually, the outcome of the dispute is decided by a combination of factors, including (1) which party terminated the agreement, (2) whether the termination was communicated in the allotted timeframe, and (3) whether the earnest money is a significant amount. See our article on earnest money for more information. 

Bonus: What happens in the event of a dispute (mandatory mediation in Oklahoma residential real estate contracts)?

An often-overlooked provision of the standard OREC residential purchase contract is the mandatory mediation clause (paragraph 14 of the residential and vacant land contracts, and paragraph 16 of the new home construction contract). This term requires the parties (by using the word “shall”) to first submit their disputes about their written contract and the subject of the transaction to a mediator before pursuing the dispute in court.  

Oklahoma Real Estate Attorneys

Avenue Legal Group can help you navigate any stage of your residential real estate transaction. We can often help you avoid getting into frustrating situations if you involve us from the beginning of your deal. However, we are ready to represent you in mediation or court if your dispute has already escalated.

Contact our firm to discuss how we can help with your residential purchase and sale.

Most common services requested by parties to a residential real estate transaction in Oklahoma:



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