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Real estate glossaryNational exam concept

Right of first refusal

A right of first refusal gives its holder the opportunity to match or accept terms the owner is prepared to take from another buyer before the owner sells to that third party.

Exam area: Contracts

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What does “right of first refusal” mean in real estate?

A right of first refusal gives its holder the opportunity to match or accept terms the owner is prepared to take from another buyer before the owner sells to that third party.

How is “right of first refusal” different from the closest wrong answer?

A right of first refusal becomes actionable after the owner decides to sell on acceptable third-party terms. An option lets the holder initiate a purchase on preset terms during the option period.

What is the Georgia-specific rule?

The written instrument controls notice, matching terms, timing, transferability, and duration, and recording can affect notice to later purchasers.

Worked exam example

Scenario

An owner receives an acceptable $400,000 offer and must first give a tenant the agreed period to buy on matching terms.

What is the most common exam trap?

Trap correction

The holder cannot ordinarily force a sale before the triggering event merely because the right exists.

Original exam check

Apply the definition

A tenant's lease gives a right of first refusal on the building. The owner has not decided to sell and has no offer in hand. The tenant wants to buy now. What can the tenant do under that right?

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Related terms to learn next

Option contract

An option contract gives the optionee the right, but not the obligation, to buy or lease property on stated terms within a stated time, in exchange for consideration supporting that promise.

Contingency

A contingency is a contract condition that makes a party's duty, right to terminate, or obligation to proceed depend on a stated event, standard, deadline, or approval.

Constructive notice

Constructive notice is knowledge the law imputes to a person because information was properly recorded in public records or because visible possession or conditions would prompt reasonable inquiry.

Assignment

An assignment transfers a party's contractual rights to another person, the assignee, without necessarily releasing the original party from contractual obligations.

Recommended next complete lesson

Continue with Contracts complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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