(1) This is one of the more complicated real estate definitions listed here. In essence, of the owner of a property decides to sell their residence and a second party holds a right of first refusal, they have to be offered the chance to purchase the home before any other potential buyers. Sellers can offer right of first refusal to interested buyers and still market the home in the meantime. But if someone else makes an offer, the seller has to allow the person with the right of first refusal to match or exceed that offer. If they do neither, the seller is free to sell the property in question to a different buyer. (Just a little confusing, right?)
(2) When you see a listing with the status “Right of Refusal,” the seller has made a prior arrangement with a buyer who will be given the chance to match any subsequent offers.
This is sometimes done when buyers must first sell their current home before they can commit to buying the seller’s home. For example, Bob wants to buy Sally’s home, but needs to sell his own home first. Bob makes an offer on the home which includes a contingency that allows him to back out of the deal if he cannot sell his home. Meanwhile, Sally is able to solicit offers from other buyers. If another buyer, Pete, makes an offer on Sally’s home, she must give Bob the chance to buy the home under the same terms offered by Pete (i.e. a right of first refusal). If Bob can’t or won’t match the offer, Pete can buy the home from Sally.