Everyone in my area is doing this now. Is this so a seller can back out of an agreement at anytime even after signing into an agreement? Or is this so even if a buyer brings a full price agreement the seller can still get out of the deal without paying anyone a commission?

Need a bit more info to give you a good answer... please explain the situation a bit more thoroughly?

ROR is typically used if a buyer has a house to sell before he can purchase. If a seller gets another offer before the buyer can remove that contingency the seller gives the buyer a certain amount of time to remove it before the seller will cancel the contract and move forward with the new offer.

Unless you have this or a similar situation, I don't see the purpose for a first right of refusal clause.

We often encounter Rights of First Refusal in situations where Sellers wish to retain some control over the future ownership of a piece of land or a next door building lot. It's usually a negotiating tool . . . . maybe not at that moment; but as a tool in some future session. Maybe they want to get a property back at some point in the future; or maybe they just feel some kind of need to "control" who might be buying into the neighborhood in the future. I think there's often a basis for challenging the original intentions.

By selling, while retaining the ROFR, the Buyer can't ever sell without informing the old Owner and giving them an opportunity to counter the offer of the future Buyer. It can clutter up the marketing process quite a bit. I hate them.

Similarly, Buyers will sometimes request a ROFR on a portion of the property that they cannot afford at that stage in their lives. I recently had some Buyers who were interested in a 40 Acre Sugarbush (a Maple Grove groomed for Sugaring) that was adjacent to an Old Farmhouse that two Attorneys had purchased.

Anytime we went to walk the land of the Sugarbush, one of the Attorneys would take it upon themselves to come out and tell us about how we were wasting our time because they had purchased a Right of First Refusal on the Sugarbush at the same time they had purchased the Old Farmhouse.

The Attorney told me that there was no way that they would ever allow someone else to purchase that prime real estate without paying through the nose for it, by out-bidding any Buyer who had taken the time to evaluate it and then prepared an Offer. And he and his Wife were quite prepared to make an attempt to discourage anyone who ever visited to do that initial evaluation of the property.

You see, they didn't want to buy the Maple Woods using their money, but they didn't want anyone else to buy it either. So the original Owner, being somewhat naive, was stuck paying taxes on the Bush, while the Attorneys continued to enjoy the privacy of the environment that was provided by these Woods.

I think that the original Owner eventually had to pay these Folks a hefty sum just to release the ROFR, or buy it back, in order to sell the parcel . . . . or they ultimately sold it to the Attorneys just to bring the matter to an end. Everyone wears out at some point. I certainly lost interest in continuing to try to sell that land long before the issue was resolved.

I hate this kind of ROFR too. When I hear ROFR, I tend to cringe and consider making a quick exit before I invest too much time. But I might suggest someone use a ROFR for improving their own bargaining position. Then I'd have to look myself in the mirror, and question my motives.

Vermont illustrates a clear case of FRORs being abused. Nick, can you tell us a little bit more about your case specifically?

FROR here in St. Paul, MN is very similar to a buyer's contingency...that is where a buyer makes an offer on a house they want to buy, but it is contingent upon them selling their own house first. This contingency at least secures the buyer the FROR if/when the seller calls the contingency due.