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Understanding a Right of First Refusal Clause

By Colleen Colkitt

A right of first refusal (ROFR) is a clause that is typically added into a purchase contract by the seller, granting the buyer a period of time to "first right of refusal." These situations might happen when the homeowner is eager to sell the property and receives an offer from a buyer who needs to sell his own home first before closing the deal on a new one.

A realtor will advise the seller and reassure them the deal can still go smoothly, if the seller includes a first right of refusal clause in the contract, where the seller determines a period of time the buyer will have an exclusive right to either purchase the home or walk away from any deal. The buyer can shop around during this time, and find homes that match or beat the price of the current offer. After the time allotment is over, the buyer will need to either close on the home, or look elsewhere for a property.

What Does It Do For The Buyer?

This clause protects the buyer from losing out on the deal of the house while they make arrangements on their own home. The clause is a temporary waiting period to close the deal, and it also ensures that if an offer does come in, the buyer has the right to refuse the offer or match it, or forego the deal altogether.


This deal does not always favor the seller because during the allotted waiting period for refusal, although the house is still on the market technically, the seller cannot just take a new offer without negotiating with the original potential offer. This original buyer must either meet the offer or move on.

Timing is key in these types of deals because while the seller waits for the first prospective buyer to make their own sale, they must wait and possibly forfeit any other incoming offers during the contract. Realtors will still put your property on the Multiple Listing Service (MLS) but they must disclose that there is a person under the ROFR clause, with something like, "Pending- 24 hour first right of refusal." This might deter any other agents from showing your home.

To prevent any additional delays, make sure the first buyer interested in your home has gone through all the proper loan procedures and has been approved for their finances in relation to your property.

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