First Right = Big Mistake

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by Osman Parvez

I got this email the other day.   It's redacted to protect the innocent.  Take a look.


Here you've got a case of the seller granting a first right of refusal to a third party.    The result?    REAL buyers were scared away, reluctant, and focus elsewhere.

The first right expired at the end of October, the slowest time of year in real estate.  The seller has blown the summer selling season.   Their agent is now chasing whatever showings occurred over the summer to let the buyers agents know the first right is expired.

Great marketing strategy, right?   Still, I give the agent credit for trying.   It was likely the hand he was dealt.

In the vast majority of cases, a first right of refusal simply deters other offers and messes up the marketing of the property.   If you are a seller who has been approached for a first right of refusal, understand that granting it has a very real cost.     You should consider asking for something in exchange, preferably non-refundable cash, if the first right of refusal will occur when the property will be actively marketed to other buyers.

This is why smart agents will never recommend you grant someone a first right of refusal.    Now you know.

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