Definition
The right of first refusal is a legal right that gives a person the chance to purchase a property before it is offered to anyone else. It is often found in rental agreements.
Understanding Right of First Refusal
When a homeowner decides to sell a property, the right of first refusal gives a specific party, like a tenant or neighbor, the chance to buy before others. In simple terms, the right of first refusal is like having a first pass at buying something before it's publicly available. Example: If a property is offered at $300,000, the person with this right can decide to match that offer before others can bid. It's not a guarantee that the property will be sold to the holder. It doesn't mean the holder can buy the property at a lower price or dictate terms. It simply offers the first opportunity to purchase at the current offer.
