Q: I found a house I really like, but they have a first right of refusal. What does that mean? Should I even bother writing an offer? Can I still buy it?
A: The short answer is “yes.” You can still write an offer, but, even if you and the seller come to an agreement, it’s not completely a done deal. A First Right of Refusal (often 48 or 72 hours) means the seller has negotiated a contract with another buyer, but that buyer still has to sell their house in order to move forward. Instead of taking the house totally off the market and waiting for the buyer’s house to sell, the seller retains the right to market (and sell) the house given that, if they get another offer, they give the buyer a “first right of refusal.” If the buyer is able to move forward, all of the terms have already been negotiated, but you don’t get the house.
Let’s say you’ve written an offer, and the seller has accepted it. The seller then goes to their original buyer and gives them notice they need to either move forward within their agreed upon deadline or they have to release the property so the seller can move forward with you. If the other buyer is able to move forward, you won’t be able to buy the house unless their deal falls through for some reason.
If the other buyer does not move forward, you’ll be able to purchase the house. Once you’re notified that you are moving forward, you’ll get started with depositing earnest money, getting insurance, starting the mortgage process, and scheduling inspections.
So, move forward as you would with any other house, but don’t get too attached until the “refusal” period is over and you know you’ve got a deal. It can be a little more complicated than some other purchases, but if it’s the right house for you, it’s worth the effort and the risk.
Talia Freedman is the owner of Talia Freedman and Co.