A Wasilla home owner recently called me with questions about a first right of refusal. It seems that his neighbor wanted to buy his property in case he should ever decide to sell. The neighbor acted like it was not a big deal. It was presented as if it were a friendly gesture between two neighbors.
A first right of refusal allows the holder of the right a chance to buy a property at the same terms another buyer has presented. The holder of the first right of refusal usually has a specified period of time to make the decision to buy or not to buy.
For a seller, that’s like entering a boxing match with handcuffs on your wrists. You have to notify buyers that if they like your property enough to write a bonifide offer with earnest money, pre-qualification letter, and everything else, you have to show their offer to someone else first. The buyer has to cool their heels while they wait to see if all their efforts are in vain. How many sane buyers are going to do this?
Don’t let anyone talk you into giving them a first right of refusal.