Real Estate Contract – Right of First Refusal – Who Benefits?

By
Real Estate Agent with Marc It Sold!

real estate contractThis post came about because of one by Jessica Horton entitled, "Why put a carton of milk on layaway when your old dairy cow doesn't have any takers?"  In it she discussed about receiving a lot more real estate contracts as of late with contingency clauses for the sale of a buyer's home with no kick-out clause.

Let me preface this by stating that I make it a point to follow-up and follow through.  From the get go I get the buyers information in regard their lender, etc. and put calls through until I hopefully get more information back.  For the many that have come to know me, I do not like surprises and I can only gather that my sellers would not be too thrilled with them either.

Considering the present market conditions, I will not take a home off of the market if there is a contingency clause for the sale of the buyer's home.  For the purposes here, I'm assuming the fact that the buyer's home is already listed with a real estate professional and priced accordingly for the market.  Granted, I would prefer it to be under contract and then obviously feel better about the situation.  Of course if that was the case, I would respectfully request all the information as to their buyer's lender and follow through on that as well. 

The reason that I'm writing this is not as much in regard to what's just been written, but more so to how this affects your seller's home being shown after the contract is executed. 

I have found that the majority of the time the home is basically passed over for consideration and that the showings generally cease or slow to a trickle at the most.  I'm not aware of other MLS's, but in the Mid-Florida Regional MLS we can keep the home ‘active' but the first thing that has to be mentioned in the public remarks section is that you have a ‘Contingency Contract' and I usually add that it's a ‘Right of First Refusal' with a certain number of hours denoted.  This appears to essentially take the home off of the market.

With the number of homes available in today's market I have to wonder if our seller's are hindering themselves by accepting some of these contracts.  Like I've said I try to do my homework, but what about the person that does not?  I try not to talk negatively in regard to others in our profession, but are they performing a disservice to their client? 

 

For more information on Central Florida real estate and Central Florida homes for sale in addition to Central Florida relocation contact Marc Grossman, your Central Florida Realtor @ 407-463-1034.  Additional information is available for Seminole County real estate and homes for sale, Orange County, West Volusia County and South Lake County.

Central Florida Real Estate Specialist - Marc Grossman, GRI - Marc It Sold!To learn more about Marc and the services he has to offer, visit his profile & website

Marc Grossman, GRI  -  http://www.OrlandoHomes-4u.com/  -  407-463-1034

Marc donates 10% of his net proceeds to Hospice of the Comforter.

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Rainer
208,738
Marc Grossman
GRI, Greater Orlando Real Estate Broker
Marc It Sold!
Bill - Thank you very much.  See we do agree on some things!  :)
December 20, 2007 03:21 PM
Rainmaker
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Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Put 40 years of experience to work for you
Lyon Real Estate

Marc, To answer your question, I can say nobody knows what it means because a contingent offer in our MLS does not say it is a contingent offer. It states that the status has been modified. Which is confusing to lots of agents.


December 24, 2007 12:08 PM
Rainer
208,738
Marc Grossman
GRI, Greater Orlando Real Estate Broker
Marc It Sold!
Elizabeth - Totally understand.  Well if that's the case, I wouldn't mind taking them 'all day long' as well.  I wonder why your Board and MLS system decided to do that instead of denoting it moreso.  Even though I wouldn't mind my system doing the same thing. 
December 25, 2007 08:11 AM
Anonymous #21
Anonymous
Anonymous

Can a first right of refusal be bumped by another first right? If first right 1 has a contingency requiring selling their home to by the other, can first right 2 also subit a first right with the same contingency,but at a higher price and bump first right 1?

August 15, 2008 04:25 PM
Rainer
208,738
Marc Grossman
GRI, Greater Orlando Real Estate Broker
Marc It Sold!

Anonymous - In answer to your question - Yes!  Just because a price is higher, does not necessarily make it a better offer.  There are too many factors to be taken into consideration.

August 19, 2008 06:22 PM
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This blog is an avenue to relate information and sites that may be of interest to you in regard to real estate. There will be miscellaneous meanderings about me and opinions in regard to Central Florida and Orlando homes for sale and real estate in particular. Get great free widgets at Widgetbox!