Expert: liznarr - 6/26/2011

Question
My sister holds the deed to the house.  I want to have first right to purchase for 60 to 90 days and find another buyer in that time.  When I find a new (third party) buyer would I use a first right of refusal at the title company?  Another agent said she did the same thing and brought the offer to purchase from the third party and title company had two escrows and used the first right of refusal.  Thank you for your answer. Muriel

Answer
Hi Muriel,

There are a couple different ways this could be handled, depending on the custom in your area; and my response below is based on an assumption that your intent is to try to make some profit on your sale to your buyer.

Not knowing all the details of your scenario, if I were you I would first want to have an executed Option/Contract worked out with your sister which states YOUR purchase price and the fact that you have the first right of refusal for the 60-90 day time period.  The document should also state (if this is your intent) that at the end of the 90-day time period you do not have a buyer, you have the right (at your choosing) to terminate your Option and not go through with your purchase…unless, of course, you have the resources to go ahead and close on the property and feel confident that you could still find a buyer and make a profit.

If, within the 60-90 day time period, you find a buyer who is willing to close within the 90-day end of your limiting period, you would enter into a Contract of Sale with your buyer stating all the terms of your sale; and you could simply have two closings on the same date, yours being the first and pocketing a profit.  

If you find a buyer who cannot close within the end of the 90-day period of your Right of Refusal, you would need to feel comfortable enough with the loan process of your buyer to go ahead and close within your 90-day period and then close at a later date with your buyer.

You may want to contact a title company in your area and ask the same question, because their process might vary from the way it is handled in other areas.

I hope the above is helpful.  Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth