Profile picture for sosnowsk

House listing has "right of first refusal" in notes

A house I'm considering for purchase has the statement "right of first refusal" in the notes of the listing. What does this mean? Is the owner in a ROFR agreement with another party, like a bank? Maybe its a short sale? Or is that indicating they would let me enter into such an agreement with them. Although, why would I do that? This home is overpriced by about $50,000 for the neighborhood and has been for sale for almost a year in an otherwise quick selling subdivision.
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November 15 2012 - US
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Answers (4)

Profile picture for flylowguy
1st right of refusal is often given to a lessee who wants to buy the house but can't at that time,  maybe because he has another house he moved from that needs to sell or close first.  So he leases instead.  Lots of things might change.  Often first right is not exercised or even presented if it is only effective during the time period of the lease-----but the owner doesn't offer it for sale during that time,  or otherwise receives no offers.
If a home is marketed with a first right that potentially stands in the way of a potential sale to an outside buyer,  that right holder has the opportunity to buy the house at the exact same price and terms as the acceptable offer.  Sometimes a house will receive an offer to purchase with cash and an immediate close.  The first right holder/lessee probably cannot match that,  so he loses his opportunity.  Even a pre-qualified buyer with a loan ready to go will often be easily able to beat a first right holder in an exact match contest just because of the quicker closing date.
If the lessee/first right holder is truly interested in purchasing the property,  the best bet is usually to just work with him on his time and ability schedule and then price the property at market.  Nobody has to be left holding the bag that way. 
The giving of a first right to a lessor tends to make them better property caretakers since they feel it will be their home someday.  In the end,  getting market is the best you can do,  so nobody actually loses anything in the process.
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4 days ago
This basically means that someone "Wanted" the property, but for Some reason or another could Not buy at the time it was listed ( or were in negotiation ). They may be in a situation where they cannot move just rent, in a lease, working on their credit, ETC ETC. So they were willing to put in the contract " First Right of Refusal" which means, they would LIKE to have these folks come forward, and are telling them, its NOW or NEVER.. Usually they do Not come forward, for one reason or Another !
Tim Hartwig
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November 15 2012
I had a similar scenario (but I was representing the seller) where a potential buyer PAID my client for ROFR rights for "x" amount of time.

Reason?  Potential buyer wanted to only pay "x" amount with "x" terms, and the seller did not agree...so rather than the buyer risk not getting the asset, he figured he would gamble with the open market.  ie if the seller receives no credible/worthy offers then maybe they can negotiate a lower price.

Maybe something similar is happening here.  Do not let it scare you off though.  You should make an offer based on what you feel it is worth--and will appraise for, of course--and see what happens.  Maybe the 3rd party will just let it go to somebody else, or they will step in and snatch it from you.  

Best wishes and good luck
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November 15 2012

It's basicaly means that the third party(like  Association) has a right to buy this unit first for same price that you offer if they want to.

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November 15 2012
 
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