The Real Estate Encyclopedia
How Does A Contingency With A Kick-out Clause Work?
Category - Home Selling Questions - General Home Selling FAQ's

When a buyer has another home to sell before he/she can apply or qualify for the loan necessary to purchase another home, the buyer may make an offer contingent on the closing of his present home.  Sellers do not readily accept such an offer because it affects their ability to sell the property while not having any assurance that the buyer’s home will sell.  Therefore, they may counter with a contingency with a kick-out clause.


A contingency with a kick-out allows the buyer to make the offer contingent upon the sale of his or her home but stipulates that the seller reserves the right to continue to market and accept offers and if a better offer is received, the original buyer has the option of withdrawing his/her offer or immediately purchasing the property without having sold the present home.


Although it is rare that the original buyer move forward and buy the new home without having sold the previous home, thus carrying two mortgages,  it can happen.  The seller must be aware of the fact that even if the new offer includes a higher purchase price, the original offer stands with all its terms and conditions intact and, if the original buyer is willing to run the risk, the seller is committed to sell the home to that buyer under the conditions of their contract.

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Home Buying Questions - General Home Buying FAQ's
Home Selling Questions - General Home Selling FAQ's
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