In the realm of real estate, a First Right of Refusal (FROR) is a contractual right that grants a contingent buyer—the individual who must sell their current home to finance the purchase of a new one—the opportunity to proceed with the purchase of a property they’re under contract for, even if another offer is received. This stipulation is especially significant because it balances the scales between the interests of the buyer, who seeks assurance, and the seller, who desires to keep their options open.
Typically, upon receiving another offer, the seller notifies the contingent buyer, who then has a predetermined number of days—usually a couple—to make a critical decision. They can either waive their contingency, pushing forward with the purchase without the safety net of selling their current home first, or retract their offer to buy, thereby reclaiming their earnest money deposit.
This mechanism is beneficial for contingent buyers as it allows them to make an informed choice, particularly when another offer is accepted on the property they intend to buy. Simultaneously, it offers sellers the advantage of continuing to market their property for non-contingent offers, thus not missing out on potential buyers.
From experience, when a contingent buyer with a FROR already has their home under contract, they are more likely to waive their contingency and maintain their purchase agreement. Conversely, without their home under contract, most buyers opt to withdraw their offer to safeguard their earnest money. Understanding the dynamics of a First Right of Refusal can significantly influence both buyers’ and sellers’ strategies in real estate transactions.
If you are considering selling your home in the greater San Antonio area (Boerne, New Braunfels, Bulverde, San Antonio, Helotes, Comfort) and are interested in saving a tremendous amount of money in the process, give Hill Country Flat Fee Realty a call to discuss your goals.