Contracts
What is a 'right of first refusal' clause in an Illinois real estate contract or lease?
AThe seller's right to reject any offer without explanation
BA provision giving a party the right to purchase or lease property before it is offered to others at the same terms✓ Correct
CThe buyer's right to rescind within 3 days of signing
DA clause requiring the property to be listed on the MLS first
Explanation
A right of first refusal gives a specific person the right to purchase or lease property under the same terms and conditions as any bona fide offer from a third party. The holder of the right of first refusal has a defined period to decide whether to exercise the right.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
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