Who holds the key to your house?

Financial expert Dave Ramsey deconstructs jargon that confuses you. Understand the terms before you get into an agreement, suggests Dave.

I bought a piece of lake property not long ago, and the developer has first right of refusal if we decide to sell it.

We originally looked at the property as an investment or building site, but I really don’t understand what first right of refusal means.
- Craig

Dave says: A lot depends on the wording, but typically it means that you can sell property to another buyer subject to the developer not wanting to buy it back at that price.

If you decided to sell within the timeframe specified in the first right of refusal contract you’d have to notify the developer that you have a written offer on the property. Then, you have to give him a chance to buy the lot first at that price.  

Or, you could just ask the developer – in writing – to waive his first right of refusal if this is something you want to do. They’re in the business of selling lots, not buying them, so it may be an easy deal.

A little about Dave:

At 26, he had a net worth of a little over a million dollars. Life couldn't be more perfect. And then he lost it all, thanks to debt. That's when Dave went on a quest to find out how money really works, how he could get control of it, and how he could have confidence in handling it. On our pages, Dave will guide readers on all things related to money! 

For more financial advice plus a special offer for our readers, visit www.davesays.org. This column is part of a series of columns by Dave, exclusively for you, dear readers!

Dave's earlier column: Share a house, save on costs?