When negotiating a real estate contract, a common phrase you will see is “Right of First Refusal”. What does this mean, though? And when is it applicable? What is a right of first refusal?
Typically it’s an agreed-upon clause in a contract, where the seller gives the buyer a certain amount of time after another offer comes in to proceed with your offer.
An example of how it works is this. Say Person A wants to sell a home to Person B for $500,000. However, Person C has a Right of First Refusal, so the property must be offered to them under the same terms and conditions. If Person C accepts, than Person B has no ability to purchase the property. While this makes it seem simple, it’s not.
Usually, there is a 24-48 hour period after the seller gets another offer in which you can purchase the home before you lose out on your deal entirely. These clauses have become exceedingly rare, though, as most sellers in markets like today have no reason to hold a home offer for you. This seller’s market has let home owners set the rules of engagement.
Home sellers can really dictate the terms here. Now, if you are also selling your home while buying, you may have timing issues. It can be tricky to buy and sell at the same time. That’s when a right of first refusal really comes in handy for the buyer. It can be a notice to make a move if their sale is close, or to move on if their home is not close to a sale.
If you’re ready to buy or sell your home, Rick & Tracy Ellis are ready to make your dream come true. Call us today at 636-299-3702, email us directly at firstname.lastname@example.org, and visit www.tracyellis.com for more information on buying and selling your home. You can also listen to the “The Rick and Tracy Ellis Show” every Saturday at 4 p.m. and Sunday at 10 a.m.