What does the right of refusal mean?
The right of refusal is a contract between a buyer and a seller which gives the buyer a priority to buy the asset in question before other buyers, according to Realtor. When you go through online listings and see that there is a property listed as the right of refusal, you must know that there is another buyer who holds the right of refusal contract.
This means that you can buy that house only when the buyer who holds the right of refusal decides not to pursue that opportunity.
Example of right of refusal
Let’s assume that you are renting a house from your neighbor. At the same time, you like the house so much that you could buy it if you are given a chance to do so. Due to your high interest, you went and talked to your landlord about the matter and agreed that if the house is to be sold, you will be given a priority. To enforce this agreement, you both signed a right of refusal contract and you kept a copy. If your landlord puts the house on the market, you will be given the first priority to buy the house.
How to validate the right of refusal?
Like any other legal documents, your right of refusal must be validated and stand up in a court if it comes to it.
For this reason, the right of refusal must be written down and signed by both parties (buyer and seller). In addition, the contract must include the description and physical address of the property. This is the only way it will serve as a legal bond between a buyer and the seller of the house.
