Thursday, May 24 , 2018, 10:34 am | Overcast 59º


Elaine Abercrombie: ‘Kick-Out Clause’ Protects Home Sellers

The language provides a compromise on 'contingency' contracts with buyers

Although less than ideal, home sellers are seeing more “contingency” contracts, with which buyers make an offer contingent upon being able to sell their own home first to complete the purchase.

Elaine Abercrombie
Elaine Abercrombie (Roe Anne White photo)

If the buyers aren’t successful, their offer to purchase becomes null and void, potentially leaving the sellers at square one.

A compromise has developed, called a “kick-out clause,” which is wording included in the contract that allows the sellers to continue marketing their home, even while under contract. If the sellers receive another offer, the buyers are granted a “kick-out” period — usually 72 hours — to respond by removing their sell-first contingency or by securing financing and completing the purchase.

Unfortunately, chances are that most buyers who must sell first won’t qualify for another loan on the new property. If the buyers fail on both counts — selling and financing — then the sellers have the right to accept another offer from qualified buyers.

While this might seem to put the buyers at a disadvantage, the sellers must have some sort of protection against an offer that could tie up their listing indefinitely and perhaps never be consummated.

Consider including language in the contract that also requires the buyers to begin aggressively marketing their own home within a specified period. If the buyers don’t leap to action, the contract can be voided.

Elaine Abercrombie, a broker with Village Properties Realtors, is president of the Santa Barbara Association of Realtors. She can be contacted at .(JavaScript must be enabled to view this email address).

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.

Become a Supporter

Enter your email
Select your membership level

Payment Information

You are purchasing:

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >