If you are purchasing a home using a loan, the bank will require an appraisal. The appraiser visits the home, looks at comparable recent sales, and determines a value for the
What's a Right of First Refusal and Why Should You Care?
You also may see the right of first refusal used between a landlord and his tenant. If the tenant likes the home, and would someday like to purchase the property, he may seek a right of first refusal to secure this option.
As an owner of a property, your initial thought may be that a right of first refusal is a win-win scenario for you. Either you sell the property to the person who initially submits an offer to purchase, or the holder of the right of first refusal purchases the property. However, in reality this may not be the case. If the wording is not incredibly black and white, and there are not strict timelines, you may be stuck unable to sell the property. If you are considering signing a right of first refusal, you should work with an attorney to make sure the terms are incredibly clear and leave no room for different interpretations.
However, this wording which was drafted in 1973, reveals a lot of ambiguity. My client’s initial offer involved a cash transaction with a closing seven days after the execution of the contract. The holder of the right of first refusal exercised her right of first refusal, but she failed to match these terms. Unfortunately, there was no recourse for the seller. The right of first refusal is worded strongly in favor of the holder. In this scenario, which has yet to come to a conclusion, so far everyone lost. My client was not able to purchase the property. The seller was not able to sell the property, and the holder of the right of first refusal has not proved capable of purchasing the property.
If you are considering signing a right of first refusal, I recommend you hire an experienced attorney to make sure you do not fall victim to the same scenario. Likewise, if you are thinking of buying a property where a right of first refusal exists, do your due diligence and make sure you fully understand the terms of that right before you waste your time and money on a purchase that may never come to fruition.
If you would like recommendations for experienced real estate attorneys in the Austin area, don’t hesitate to contact me.
Erika Rae Albert is an Austin native who has built her business around one guiding principle, YOU always come first. Prior to joining the real estate industry, she honed her her customer service s....
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