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<p>My concern would be more that a ROFR could impact a buyer being
willing to make an offer knowing that they could lose out. The
seller might end up with a lower price offer as a result, or
otherwise a more comlicated sale.</p>
<p>There's a condo on Mercer Island that has ROFR provisions in
their documents benefiting the other owners and I always wonder
why they didn't get rid of those when they added in rental
restrictions. I sort of doubt that the ROFR has ever come into
play, but even if it has, there just seems to be little reason for
it.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
John L. Scott/KMS Renton
206 723-2148</pre>
<div class="moz-cite-prefix">On 5/17/2018 12:49 PM, Erik Marks
wrote:<br>
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<p class="MsoNormal"><span style="font-size:11.0pt">Be careful
with the Right of First Refusal in this context. There are
many important terms to a transaction other than price. And
so the "price" could be higher than fair market if, for
example, the deal is seller financed with a 2% interest
rate; or the "price" could be lower than fair market if, for
example, the property was to be encumbered by a restrictive
covenant of some sort. And so I don't think it would make
sense to grab price from a ROFR environment, with other
terms being defined by a standalone PSA.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Further,
ROFR's can trigger conflicts that generate painful disputes,
Lis Pendens recordings and tie up property for long
periods. For example, what if the 3<sup>rd</sup>-party
offer includes a provision that the purchaser will pay for
the property being sold by (a) cash, plus (b) conveyance of
a certain parcel of property held by the 3<sup>rd</sup> party
or its affiliate. How can the holder of the ROFR "match"
that offer. Then what happens? Hence the risk of a dispute
that is difficult to resolve and locks the property up. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">The
suggestion for an appraiser-arbitrated price made by another
commentator is a good way to go - using the "long form"
offered. And I would further suggest providing some
defining framework to what "Fair Market Value" means and
what the minimum qualifications of the appraisers are. With
respect to the former concern, consider whether FMV is by
appraiser-choice of valuation by comparables, cash flow or
replacement valuation; or if one or two of those are to be
given greater weight. Also consider what is allowed within
the scope of a "comparable" with respect to product type and
geography. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt;color:black">--
<o:p></o:p></span></p>
<p class="MsoNormal"><b><i><span
style="font-size:11.5pt;font-family:"Arial",sans-serif;color:black">Erik
Marks</span></i></b><span
style="font-size:11.5pt;font-family:"Arial",sans-serif;color:black">
</span><span
style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><br>
</span><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">2255
Harbor Ave SW</span><span
style="font-size:11.0pt;color:black"><o:p></o:p></span></p>
<div>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Suite
203</span><span style="font-size:11.0pt;color:black"><o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Seattle,
WA 98126<br>
<br>
office: 206-264-4598 <br>
cell: 206-612-8653<br>
<br>
</span><u><span
style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#0000FE"><a class="moz-txt-link-abbreviated" href="mailto:erik@egmrealestate.com">erik@egmrealestate.com</a></span></u><span
style="font-size:11.0pt"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
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