How does an option to purchase differ from a right of first refusal?
An option to purchase grants the optionor the right to buy the property at a fixed or easily determinable price on or before a certain date in the future. A right of first refusal gives the holder the right to match any offer made on the property before the owner can accept it. For example, suppose the owner receives an offer of $125,000 for a home and he intends to accept it. Before he can accept the offer, however, he must go to the holder of the right of first refusal and give him the opportunity to buy the property for at least that price. If the offer is matched, the owner must sell to the holder of the right. If it is not, then the owner is free to sell to the third party offeror. Of course, the owner is under no duty to accept any offer. If he simply rejects the $125,000 offer at the outset then the holder of the right of first refusal has nothing to say about it. Also, the holder of the right of first refusal has no control over when he may have to exercise his right. The holde
