Deal structure

How to assign a contract with a right of first refusal

Assigning a contract with a right of first refusal (ROFR) means you need to respect the third party’s prior claim to the property. Your assignment will likely be contingent on the ROFR holder declining to exercise his or her right, which requires specific communication.

November 15, 2026 · 4 min read

Understand what a right of first refusal means

A right of first refusal (ROFR) is a contractual right that gives a specific party the option to enter into a business transaction with the owner of something, according to specified terms, before the owner can enter into that transaction with a third party. In real estate, this means if a seller receives an offer he or she wants to accept, the ROFR holder gets the first chance to buy the property on those same terms. This is common in co-owner agreements, homeowners associations, or leases with an option to purchase.

It’s not an option to buy at a predetermined price; it’s an option to match a bona fide offer. If the ROFR holder doesn’t match the offer, the seller is free to sell to the third party. Your assignment deal depends on this process unfolding correctly.

Identify if a ROFR exists early

The first step is always due diligence. Ask the seller directly if any such agreements exist, and review the property’s title report, deed, and any HOA documents or prior sale agreements. A title company will flag an recorded ROFR, but sometimes they are in private agreements.

If an ROFR is discovered late in the process, it can derail your deal. Knowing upfront allows you to plan your approach. For more on what makes a good lead, see: /learn/what-is-a-motivated-seller-lead.

Structure your assignment contract for the ROFR

If a ROFR exists, your purchase agreement with the seller should explicitly acknowledge it. Include a contingency clause stating that the sale is subject to the ROFR holder’s approval or his or her waiver of the right. This protects both you and the seller.

When you assign that contract to a cash buyer, make sure the buyer understands the ROFR terms. The buyer will need to be prepared for potential delays while the ROFR process plays out, or for the possibility that the ROFR holder exercises his or her right.

The notification process for the ROFR holder

The seller is typically responsible for notifying the ROFR holder. This notification must include the exact terms of the accepted offer, including your purchase price and any other material conditions. The ROFR holder then has a specified period to respond, which could be anywhere from a few days to a month, depending on the agreement.

Ensure the seller sends the notice properly, usually via certified mail, and keeps proof of delivery. You want a clear record that the ROFR holder received the offer and either accepted or declined it within the given timeframe. This is critical for clear title down the road.

What to do if the ROFR holder exercises his or her right

If the ROFR holder decides to exercise his or her right, your assignment contract with your cash buyer becomes null and void. The seller then proceeds to sell the property to the ROFR holder on the terms offered. This is a risk you take when dealing with properties that have such clauses.

While it means a lost deal for you, it’s a legally binding agreement the seller must honor. You simply move on to the next lead. For more on dealing with different types of investors, see: /for/wholesalers.

What to do if the ROFR holder waives his or her right

If the ROFR holder explicitly waives his or her right, or the specified response period expires without action, the contingency in your purchase agreement is satisfied. At this point, you can proceed with your assignment to your end buyer without further concern about the ROFR.

Make sure to obtain a written waiver from the ROFR holder, or clear documentation that the response period has passed. This documentation will be essential for the title company to issue a clear title to your assignee.

Questions people ask

Can I hide my assignment fee from the ROFR holder?

No. The ROFR holder must be presented with the exact terms of the bona fide offer the seller intends to accept. If your assignment fee is part of the total price, it should be disclosed as part of the total contract price.

What if the ROFR holder doesn't respond?

Most ROFR agreements specify a timeframe for response. If the holder does not respond within that period, the right is typically considered waived. Always get a written waiver if possible, or clear documentation of the expired timeframe for title purposes.

Should I still make an offer if I know there's a ROFR?

Yes, if the deal makes sense for you. An ROFR doesn't mean the holder will exercise it. It's just another contingency to factor into your deal structure and timeline. Many ROFR holders are not in a position to buy when the time comes.