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Right of First Refusal

K

Kaleb

Well-Known Member
I would like to purchase 80-100 acres of farmland ground from a neighbor, but they do not want to sell currently which is understandable. I would like to offer to purchase a right of first refusal from them on this land. What are folks honest opinion on what this RoFR is worth or what it should cost ?


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Well, it’s complicated. It can be good for some sellers, and not good for others. Before you discuss cost, are you sure they are willing to sign and record a First Right of Refusal?
 
I think you're better off working on deleveloping a relationship and making it known that you'd like to purchase if they ever decide to sell. Probably get a better deal too.
 
Hardwood11 said:
Well, it’s complicated. It can be good for some sellers, and not good for others. Before you discuss cost, are you sure they are willing to sign and record a First Right of Refusal?
Click to expand...

I’m not, in fact I’m thinking they won’t be interested. But before I bring it up I wanted to have a number in mind that I could throw out there so they know it’s a serious offer


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In my area a lot of ground is sold on auction. If someone has first right of refusal i think they can sit back and not bid and then decide if they want it for the selling price at the end. Obviously that's not great for the seller.
 
Plus the bids might be lower, knowing they could go through all the work, and not get the farm.
 
You said they are your neighbors.
BUILD a relationship.
Don't be nagging every time you see them bout buying, but occasionally that someday when THEY are ready to sell you would appreciate first chance.
 
Total FWIW, I am not an expert on this at all. But when I bought my farm, now many years ago, the seller wanted to include language that if I ever sold that he had right of first refusal, should I decide to sell. My realtor actively discouraged me from agreeing to that stipulation based on his knowledge/experience...so I did. As it turns out unfortunately, the seller is now deceased, so I am under the impression that it would be a moot point now even had I agreed to it then.

But, I remember in general that the realtor thought it was a bad idea, pretty much a "don't go there" type of thing.
 
If you have say 80 acres and your neighbor wants a first right of Refusal. Here’s the deal… he then controls the sale of your land.

What if you want to sell the land to a family member, cousin, friend,? An auction would be difficult, listing would have to disclose it ?

What if you find out he’s meth head or poacher ? Think of these scenarios before you sign anything.
 
Unless you have the $ already....find out if the bank will give you the loan before even thinking about it. I live on the western side of the state, was offered great land/timber on the eastern side. Bankers over here don't understand land over there & don't want to give loans, even if you have the % to put up front they are asking for.
 
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