- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Right To First Refusal
The right of first refusal refers to a legal right of someone to match an offer made by a third party and become the buyer instead.
These rights can be written into contracts as clauses, options, or straight up agreements.
For example if a property owner agrees to give this right to a potential buyer A, should another buyer B arise in future (in the active period) and makes an offer to buy the property, the potential buyer A who hold’s the option will have to be informed and given the opportunity to make a counter offer which at least matches the deal proposed by the new buyer B.
If buyer A matches the offer of buyer B in price and terms, or better it, then the property must be sold to party B.
Should buyer A fail to match the offer made by buyer B, then the owner will have the right to sell the property to party B and has no obligations to sell to party A.
It must be noted that the holder of the right of first refusal will not have the opportunity to buy the property until the owner entertains an offer to buy it.
Such rights are commonly issued in partnerships between shareholders, between landlords and tenants, etc.
In contrast the right of first offer gives the right holder the first opportunity to buy space or property when it becomes available. There is no requirement for a third party to make an offer for the option to be triggered.