The Right of First Refusal
The average person becomes involved in real estate transactions only a handful of times in their life, leaving many at a disadvantage due to inexperience, confusing real estate terminology and contractual legal language. Improper contract wording can result in unenforceable conditions which complicate the buying and selling process, especially when it comes to the Right of First Refusal. Understanding this contractual right will aid you in establishing transaction terms which facilitate the buying process and ensure you are able to purchase the land or home you desire.
The Right of First Refusal is a contractual right which grants an individual the option to enter a business transaction with the owner of an asset, according to specified terms, before the owner is entitled to enter into that transaction with a different party. When it comes to real estate, the Right of First Refusal is an agreement between the property owner and purchaser A, that should purchaser B come along, the property owner will inform purchaser A and give them first priority in buying the property at the established offer price.
Some advantages and disadvantages exist with the Right of First Refusal, such as:
- Buyer Advantage: As the first person to “claim” a property, your intentions are known to other potential purchasers and will dissuade some potential purchasers because they want to avoid starting contractual disputes of any type.
- Owner Advantage: While leaving your property on the market, multiple purchasers can place legitimate offers on your home or land which increases the chances of a favorable offer.
- Buyer Disadvantage: Misunderstandings or improper wording can result in a contractual breach which can result in the loss of your Right of First Refusal payment and would require a lawsuit against the owner to recover the funds.
- Owner Disadvantage: Potential buyers see that a contract on the home is already in progress and don’t realize that a better offer can still be placed or are too highly motivated to buy that they will not wait.
As with all real estate transactions, having a qualified representative present to advise you during the buying or selling process is highly beneficial. We recommend you consult with a real estate agent or real estate attorney to help during this process.
Owners and real estate agents can increase the visibility of properties for sale by posting on AllAcres.com, your total source for land sales. For questions about getting the maximum exposure for your land for sale, All Acres can be reached by phone at (855) 227-3741. Or, feel free to contact us online and learn more on how to list your property.