Contracts
In Pennsylvania, how does a buyer's 'right of first refusal' in a purchase contract work?
AThe buyer has the first right to refuse any home inspection repairs
BIf the seller receives another offer, the buyer with the right of first refusal has the opportunity to match it before the seller can accept the competing offer✓ Correct
CThe buyer may refuse to close if the property does not appraise at the purchase price
DThe right of first refusal gives the buyer priority in all future sales of the property
Explanation
A right of first refusal (ROFR) gives the holder the right to match any subsequent offer before the owner can accept it. In real estate, if the seller receives a third-party offer, they must notify the ROFR holder, who then has a specified time to match the offer.
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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.
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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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