A Kick-Out Clause is a provision in a real estate purchase contract that allows a seller to continue marketing a property even after accepting a contingent offer. It is most commonly used when the buyer’s purchase depends on selling their current home. If the seller later receives a better offer from another buyer, the kick-out clause gives the original buyer a specified period, often 24 to 72 hours, to remove the contingency and proceed with the purchase or allow the seller to terminate the contract and accept the new offer.
Kick-out clauses help balance the interests of both parties. Buyers gain an opportunity to secure a property while they complete the sale of their existing home, while sellers avoid having their property tied up indefinitely by a contingent contract. The exact terms of a kick-out clause, including the notice period and the buyer’s required response, are negotiated as part of the purchase agreement and may vary depending on state law, local practice, and the language of the contract.
