When Will the "First Right of Refusal" Come Back in Style?
Great blog,
The "First Right of Refusal" has never really gone out of style. In this market where homes are sitting on the market longer, many seller's are also putting them on the market for lease. I had a client that just leased a home for a year, with option for additional year, and a "First Right of Refusal".
We also wrote it with a what is called a Kick-out clause with a time period of 72 hours.
for the comments about the expense of the inspections... buyers take that risk when they enter into any escrow and for what ever reason the escrow doesn't close.
It would be difficult to do this in a short sale, but nothing is impossible.
William Archambault wrote an excellent piece on the "first right of refusal" about a month ago. William wrote his from mostly a leasing perspective.
What's really silly is that I was wondering, just the day prior, WHY is this clause underutilized with contracting on homes, today and in Nevada, from a selling perspective? What I mean by this, if another contract comes in from a different buyer, the contracted buyer will have :insert set time frame: hours to meet the price, terms and conditions of the new offer or their contract becomes null and void.
I used this clause (or had this clause used on my buyers) REGULARLY when I sold in Nebraska.
After all, we are a seller's market and and why wouldn't we want to go all lengths to make our sellers more money if it is entirely possible?
I believe by keeping buyers on their toes to perform a *little bit quicker* so they can fulfill their contingencies (I get it, we have lending challenges, boo hoo,) that homes would sell for: more money, quicker and with a higher quality & committed buyer. Our contract to close ratios are sad, sad, sad here, not only because of short sale contingencies, but rather buyer committment. We need to have buyers get some "skin in the game" and make sure they are solid.
Of course this clause may be impossible to implement when a short sale contingency needs to be fulfilled.
At any rate, I added the clause to my zip forms so I don't "forget" when I have a "standard" seller. I also added a little definition for the buyer's agent. I suspect they will not know what I am speaking of!
I can't think of any bad reasons. So tell me why this isn't a good idea.
:)
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