Home Repairs in the Oklahoma Real Estate Contract
Update 2016: Significant changes were made affecting how repairs are handled in the Oklahoma Real Estate Contract – read full text here.
Home Buyers request a monetary cap that Sellers will spend on home repairs in the Oklahoma real estate contract when negotiating other contract elements, such as sales price and closing date. This is a true guessing game, because we determine and request this cap before we have conducted any inspections.
It’s important to note that repairs are handled differently state by state, and this post applies only to home repairs in the OKLAHOMA real estate contract.
When the Listing Realtor presents the offer to his/her Seller, he must include this full amount requested for repairs, as the Seller is agreeing to be liable for the total amount. However, if $2,000 is requested and only $1,000 is needed, the Buyer does NOT receive credit for the difference. So, when preparing an offer, the Buyer does not want to over-shoot this amount.
After inspections are done, the Buyer’s Realtor prepares a form called a TRR (Treatments, Repairs and Replacements) which lists requested repairs. It is the Seller’s (or Seller’s Realtor’s) responsibility to obtain bids for the requested repairs.
If you request $1,000 for home repairs in the Oklahoma real estate contract and the repair estimate comes to $1,500, we simply renegotiate. Perhaps the Buyer will cross a few items off the repair list or sometimes the Buyer and Seller will agree to split the difference. Sometimes the Seller will just make all the repairs and doesn’t quibble over the amount in excess of the cap.
Home Repairs in the Oklahoma Real Estate Contract
An experienced Tulsa Realtor will visually inspect the hot water heater, air conditioning unit, furnace and roof. Of course we also visually inspect the home for possible structural problems and always check the Seller’s disclosure for any red flags. We try to get a good idea of what may be actually needed for repairs, but it’s still a guessing game. In the photo above, it’s pretty obvious that structural repairs will be needed – and unless this home was a real bargain, I would NOT let my Buyer purchase this home!
Even the most experienced Tulsa Realtor can’t predict that the shower pan leaks or that there is standing water in the crawl space. Sometimes there will be items that come up in inspections that neither Seller or Buyer could have predicted.
If a repair is known to be needed, it can be written in the ADDITIONAL PROVISIONS section of the Oklahoma real estate contract and is NOT included in the amount requested for repairs. For example, I will write in Additional Provisions that a drip pan will be installed under the hot water heater IF required by the inspector or the Appraiser. Or, if the hot water heater is in the garage and has not been raised the required 18-inches and I KNOW it will be required by both inspector and Appraiser, I’ll write that repair request in that section of the contract so that it is not included in the cap requested for repairs.
By the time we get to repair estimates and Appraiser requirements, everyone is invested in this transaction. The Seller has found another home to move to and has begun packing. The Buyer has spent money on inspections and an Appraiser. Realtors need to keep cool heads when negotiating repairs and remember that a little compromise goes a long way.
If you are interested in purchasing a home in the greater Tulsa area, I would be honored to represent you in your home purchase. Choosing the perfect home is the fun part, but you really need a Realtor in your corner who will pay attention to repairs and one who fully understands the Oklahoma real estate contract.
Content written and published by Lori Cain.
