What You Need to Know About the Kick-Out Clause

It’s a common occurrence to find more and more buyers dependent on their ability to sell their previous home in order to move into a more expensive one.

And even if people wouldn’t like to sign a contract that is dependent on this ability, it has become part and parcel of contracts in the real estate world, and which is called a “contingent contract”.

What this contract also promises is that if the sale of their prior home is not possible, then the contract is deemed null and void and the seller will have to return the deposit for the home made earlier.

However, since all sellers wouldn’t want to keep their house off the market, thanks to such a contract, one can employ a kick-out clause.

In the situation where another buyer is found, as the seller is allowed to market their house, they can give the buyer 72 hours to remove the contingency. In other words, they have that much time to keep the contract alive and buy the home in the process.

Or else they would have to allow the seller to settle for the next offer that comes his way…

Now it’s fair to ask whether this clause is acceptable to both parties or not. And the answer is ‘Yes’. The reason for this is since both the seller have wiggling room so as to either find another buyer who has ready cash or is willing to pay more.

The buyer, alternatively, can take his time to arrange for the money at his convenience but also have a house of his liking as an option for purchase.

In other words, it is a win-win situation for both parties and which is why it is used in a number of real estate contracts.