Broker Question - List Boat with Right of First Refusal?

[Paul L]

Doesn't first-right-of-refusal mean that you would get to match a legitement offer that a 3rd party made on the boat? If so, that would need to be disclosed to the potential buyer, making it harder to sell. You going to compensate the potential buyer for their costs like a survey or travel expenses? Seems like a real complication. Can't you come up with an owner short-term financed deal?

[Liam Wald]

Originally Posted by Paul L

Doesn't first-right-of-refusal mean that you would get to match a legitement offer that a 3rd party made on the boat? If so, that would need to be disclosed to the potential buyer, making it harder to sell. You going to compensate the potential buyer for their costs like a survey or travel expenses? Seems like a real complication. Can't you come up with an owner short-term financed deal?

This is how Wikipedia defines it;
https://en.wikipedia.org/wiki/Right_of_first_refusal
Wikipedia
Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.

I agree with you. Not disclosing to potential buyers that there is a "first right of refusal" agreement in place would be unethical and disclosure would likely turn potential buyers away.
Although a low-ball offer would force the hand of the party holding first right.

[tankersteve]

No broker experience, but what Liam said seems interesting to me. If I am notified that there is a right of first refusal, does my offer have to be accepted for the ROFR to take place? Where do low-balls fit into the scheme here?

Second, if I make an offer contingent on survey, does the individual with the ROFR have to make his own survey first?

I think some are right in that a ROFR is not going to help your friend out. Maybe as Liam mentioned, an agency listing makes sense, and your friend just tells you of any offers he has, informally notifying you that you need to get in the game if you want to play.

Tankersteve