First Right Of Refusal Agreements
Learn what a first right of refusal is and how it can be used and impact your purchase or sale of real estate.
A first right of refusal can be an integral part of the purchase agreement. We are not attorneys but will offer a simple explanation of the addendum. This addendum, when used properly, will benefit a buyer who has a home that must be sold to complete a purchase of the next home. This addendum creates a "contingency" that the purchase of the home that an offer is being made on is subject to the sale and closing of the home that is currently owned. This should be used if you are in a position, typically because of inability to perform financially, where you cannot or do not want to purchase the home you plan to buy without first selling the home you currently own. These forms typically designate a two part contingency including the "sale" and "closing". The "sale" portion relates to the actual signing of an accepted contract with a buyer. The "closing" relates to the physical transfer of deed and collection of proceeds. It is typical, upon releasing the "sale" portion of the contingency, to begin the timeframes and movement of terms on the home you are purchasing per contract all while still being subject to the "closing" portion. Be sure to discuss your contract with your preferred agent and attorney for additional details.