OPTION TO PURCHASE OR RIGHT OF FIRST REFUSAL?
For an Option to Purchase to be valid, the document needs to contain all of the terms and conditions for the possible sale so that if a buyer were to exercise the option, everything that has to be agreed is already in the document. The option should also set out a time period, if any, for which it will be valid and a procedure to the purchaser to exercise the option.
The difference between this and a right of first refusal is that if the buyer wanted to exercise his right to purchase, the terms and conditions and sale price would still have to be agreed, and if there is no agreement, there is no sale. An option is much stronger because it commits the seller to selling, whereas the right of refusal merely puts the buyer in the front row for negotiations to purchase.
The wording for a Right of First Refusal would be something like this:
The Seller and Owner of Erf 25 Pennington hereby grants to Joe Soap (the "grantee") the right of first refusal in the event of a proposed sale of the property.
To enable the grantee to exercise such right, the owner shall make the property available to the grantee to purchase on stipulated terms and conditions.
The grantee shall exercise the right on or within 3 days of being presented with an offer, and failing acceptance of the sale offer, the property may be sold to another purchaser, but not at a price or on terms more favourable than first offered, unless again first offered to the grantee on such more favourable terms.