A kick-out clause is a contract provision that lets a seller accept an offer with contingencies—most often a buyer’s home-sale contingency—while still marketing the property. If a better or non-contingent offer arrives, the seller can notify the original buyer, triggering a short window (typically 24–72 hours) for them to remove their contingency or step aside.
Sellers gain flexibility and reduce risk of being tied to slow-moving deals. Buyers know they must act quickly or risk losing their reservation. Investors and agents can manage multiple offers, streamline closings, and balance market competition with contract certainty.
Unlike a pure home-sale or financing contingency, a kick-out clause gives sellers the right to continue marketing. If a stronger offer appears, sellers aren’t locked in; they can “kick out” the original buyer. Other contingencies only pause the process until conditions are met, without allowing new offers.
With a kick-out clause, sellers avoid taking their listing off-market. They remain open to higher bids, maintain negotiating leverage, and reduce the risk of dead deals when a buyer’s contingency drags on.
Buyers secure a desired property even if their current home isn’t sold—yet must be prepared to remove contingencies or lose the deal if a better offer emerges.
Investors and agents use kick-out clauses to optimize deal flow, minimize holding costs and ensure that backup offers remain poised to replace stalled transactions quickly.
The seller accepts an offer containing a contingency (often a Home-Sale Contingency) but continues to show the property. A new, stronger offer is presented.
The seller delivers a written notice to the first buyer citing the new offer’s terms, specifying which contingencies must be removed, and stating the time frame for a response (e.g., 48 hours).
Time limits vary by state but typically range from 24 to 72 hours. Notices must comply with contract language and local real estate regulations to be enforceable.
A home-sale contingency pauses the deal until the buyer sells their home—no new offers allowed. A kick-out clause lets the seller keep showing and accepting superior offers.
Financing contingencies protect buyers who need loan approval. A kick-out clause focuses on allowing new offers rather than protecting approvals—though it can be paired with financing protections.
Use a kick-out clause when sellers want backup options. Buyers add financing or home-sale contingencies to protect themselves but should expect possible kick-outs in hot markets.
Some states cap notice periods or require specific language. Always verify local real estate laws before drafting or signing.
Review contract language carefully, seek legal advice on timelines, and prepare backup financing or accelerated home-sale plans to avoid being kicked out.
Buyers may lose the property if they can’t remove contingencies in time—and risk losing their deposit if contract terms aren’t met.
If the backup offer collapses, the seller may need to restart negotiations with the original buyer or re-list entirely, delaying the process.
Include escrow instructions for deposit handling and negotiate extension options in case backup offers fail or buyers request more time.
Sellers should set realistic response windows and vet backup offers. Buyers must prepare funds or have contingency removal plans ready to stay in the deal.
Sellers gain the most flexibility; buyers benefit from securing properties but face higher risk of being displaced.
Yes, buyers can counter with a request for a longer response window or adjusted terms, but it’s up to the seller to accept.
If contingencies are removed and the sale proceeds, the deposit applies to closing. If the buyer walks away per contract terms, they may forfeit it.
Typically 24–72 hours, but some states impose maximum or minimum notice periods. Check local real estate laws.
State regulations can dictate notice methods, timeframes and required language. Non-compliant clauses may be unenforceable.
Kick-out clauses balance seller flexibility with buyer commitment, streamline backup offers and enhance deal momentum in competitive markets.
Discuss your risk tolerance, timeline needs and local rules. Ensure contract language clearly spells out response windows and contingency removals.
Ask your agent or attorney for template kick-out clause language, or review form contracts from your state’s real estate commission to see model provisions.
