What’s a Kickout Clause?

Before Mom Calls For Dinner

From time to time, I’ll see a house that’s still active on the market (I showed one on Wednesday in fact) but is under contract with a kick out clause. Right now, there are 6 such instances out of 1764 active listings in the Charlottesville MSA and MLS.

What’s a Kick out Clause?

A kick out clause is a chance for the seller and buyer to have their respective cakes and eat them, too.

Or, when a buyer wants to buy a home but hasn’t yet sold their current home, and the seller wants to accept the offer but not fully remove the home from the market.

If a house is under contract with a kick out clause, that means it’s under contract but the buyer most likely has a home sale contingency. If another buyer were to come along with an offer the seller wanted to accept, the seller would accept the second offer, subject to the first offer’s termination and give the buyer notice and give them 48 hours or so to remove their home sale contingency. If the buyer chooses to not remove the contingency (most likely because they cannot) the seller could kick out the first offer and accept the second one.

Seller’s happy, second buyer is happy, first buyer notsomuch.

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1 Comment

  1. Simon Campbell March 15, 2014 at 23:05

    In my opinion, this is a great purchase agreement clause for buyers that are working on selling their home. The accepted purchase agreement gives the seller security that they have a sale (albeit in the future) but they can still look for a backup buyer. The buyer’s offer is much more desirable with this clause as well.


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