Would a Right of First Refusal Benefit You?
Normally a right of first refusal is used when a prospective buyer offers to buy a home, but for some reason has a contingency that needs to be addressed before “he” is willing to move on… (The most likely contingency would be that the buyer needs to sell their home before purchasing)….
The seller in this case, likes the offer, but for good reason is wary of the contingency....
What can they do? Buyer and Seller may agree to a “right of first refusal”…..
The Buyer and Seller enter into contract, price & terms are agreed upon and there is a RFR clause.
The right of first refusal gives the Seller the right to continue marketing his home…. If he gets another offer from another Buyer before the 1st Buyers contingency is met then He can then ask Buyer with the RFR to remove the contingency and move forward towards closing, or…. back out of the transaction so that the Seller may move forward with the subsequent offer….
The Benefits… a sense of security…..
To the Seller: knowing that he has an offer for a certain amount of money…that is if the buyer’s contingency is removed…..
To the Buyer: knowing how much he will be paying for a property….. Thereby knowing what his bottom line is on both sides….
For the Seller: It stops some potential buyers from viewing their home….he really doesn't have his home sold until the Buyer gets a contract on his....
For the Buyer: it can have an effect on his negotiating power…. The seller will view this as a less than perfect offer and want more money for accepting it.....
This can afford a sense of security for both Buyer and Seller but comes at a cost….