What does a right of first refusal grant a party?

A right of first refusal is a contractual agreement that gives one party the opportunity to purchase a property before the seller can offer it to other potential buyers. This right essentially allows the holder to have the first chance to buy the property under specified terms, effectively prioritizing their interests in the sale.

This mechanism is particularly useful in real estate transactions because it can provide an advantage to the party holding the right, enabling them to secure a purchase without having to compete with other buyers. It often comes into play in situations where a property owner may want to sell but wishes to give a trusted party, such as a tenant or neighbor, the first option to buy.

In contrast, the other options misrepresent the nature of the right of first refusal. It does not provide the ability to negate a purchase agreement, nor does it grant a bonus for buying a home or the right to demand repairs before sale. The focus of a right of first refusal is specifically on the opportunity to purchase rather than on any other aspects of the transaction.