The Real Estate Encyclopedia
What Is Right Of First Refusal?
Category - Home Buying Questions - Search & Offer FAQ's

The right of first refusal protects the prospective buyer from having a property sold before he/she has the opportunity of presenting an offer and negotiate a purchase agreement.  For example, a tenant may agree to rent a property only if given an opportunity to purchase the property before someone else makes an offer.  In other words, the tenant is saying to the landlord, “If you get a valid offer from someone to buy this property, I want the option to match that offer.”

If the landlord is interested in selling the property, he/she usually doesn’t care who buys it, as long as the price and terms are the same and acceptable. The right of first refusal can often be found in a purchase agreement for land.  If the same seller owns additional acreage adjacent to a particular property, the buyer will often ask for a right of first refusal to cover the adjacent acreage, in order to protect his/her privacy and the value of his investment. 

 
Category(s)
Home Buying Questions - Search & Offer FAQ's
Home Buying Questions - General Home Buying FAQ's
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