Oklahoma Real Estate Contracts Guide for the Exam

Oklahoma Real Estate Contracts Guide

Contract law is a significant portion of the Oklahoma real estate exam — both the national content and the 50-question Oklahoma state section. Oklahoma has specific contract-related rules around the Property Condition Disclosure Act, earnest money trust accounts, and the use of both deed of trust and mortgage instruments.

Elements of a Valid Contract

All real estate contracts must meet six requirements:

1. Offer and Acceptance — definite offer and unconditional acceptance (mirror image)
2. Consideration — something of value exchanged by both parties
3. Competent Parties — legal age and mental competence
4. Legal Purpose — must not require illegal acts
5. In Writing — Oklahoma follows the Statute of Frauds for real estate contracts
6. Consent — free from fraud, misrepresentation, duress, or undue influence

Oklahoma Purchase and Sale Agreement

A standard Oklahoma purchase agreement includes:

• Identification of buyer, seller, and property
• Purchase price and financing terms
• Earnest money amount and designated holder (broker's trust account)
• Contingencies (financing, inspection, appraisal)
• Closing date and possession terms
• Reference to the Property Condition Disclosure Statement
• Included and excluded personal property/fixtures

Oklahoma does NOT have a mandatory attorney review period. Once signed, the contract is binding subject to its stated contingencies.

Oklahoma Residential Property Condition Disclosure Act

One of the most tested Oklahoma state contract topics: the Oklahoma Residential Property Condition Disclosure Act requires the seller to provide a Property Condition Disclosure Statement before the buyer makes an offer.

The statement discloses: - Known structural defects - Plumbing, electrical, and HVAC system conditions - Known environmental hazards - Any other known material defects

If the buyer receives the disclosure after making an offer, the buyer has 5 days to rescind the offer without penalty.

Earnest Money Trust Accounts

Oklahoma law requires brokers to: - Deposit earnest money into a properly maintained trust account within 3 business days of receipt - Keep trust funds completely separate from personal and operating funds (no commingling) - Maintain records of all trust transactions for 5 years

Failure to comply with trust account rules can result in license suspension or revocation.

Deed of Trust vs. Mortgage in Oklahoma

Oklahoma uses both instruments:

Deed of Trust: Involves three parties — borrower (trustor), lender (beneficiary), and trustee. In the event of default, the trustee can conduct a non-judicial foreclosure (power of sale) — faster and without court involvement.

Mortgage: Involves two parties — borrower (mortgagor) and lender (mortgagee). Default leads to judicial foreclosure — requires a court filing and court-supervised sale.

On the exam, questions may ask which instrument allows non-judicial foreclosure (deed of trust) versus which requires court involvement (mortgage).

Common Contract Contingencies

Financing contingency: Buyer may cancel if financing is not obtained on specified terms. Inspection contingency: Buyer may request repairs, price reduction, or cancel based on inspection. Appraisal contingency: Buyer may renegotiate or cancel if the appraisal comes in below purchase price.

Contract Remedies

• Rescission: Cancel the contract and restore parties to pre-contract positions
• Specific performance: Court orders completion of the sale
• Compensatory damages: Monetary compensation for the non-breaching party
• Liquidated damages: Earnest money retained by seller if buyer defaults (if specified in the contract)

For the full Oklahoma exam and licensing guide, visit [CARealestate.com/states/oklahoma](https://carealestate.com/states/oklahoma).