How to Win Multi-Offer Situations (Seller's Edition): The Kick-Out Clause

So you're selling your house and, as your listing agent, I come to you with multiple offers after the first open house weekend. We select the best for our needs and notify the buyer, but how can we still protect ourselves if the buyer's financing suddenly falls through or a better option comes along?

Enter the Kick-Out Clause

The Kick-Out Clause is a contingency that allows a seller to continue to market their home even after they’ve accepted an offer. Essentially, a Kick-Out Clause allows the seller to kick out the initial buyer’s offer if a more preferable offer comes along.

When should you use this?

Usually, a Kick-Out Clause is used as a counter-offer by the seller when considering accepting an offer where the buyer has requested contingencies, such as the buyer needing to sell their current home to complete the purchase. If the buyer is taking too long, the seller can field and accept a new offer and "kick out" the previous buyer from the contract.

Can this also work for buyers?

It's riskier to accept for buyers because they may have already paid for the home inspection and incurred attorney fees to draft the Purchase & Sale Agreement when they're suddenly out of contract, but it can be looked at as another tool to use to win a multi-offer situation. Offering a Kick-Out Clause to a seller as part of your offer may entice them to accept your offer over others because you are showing how confident you are about fulfilling the sale in a timely manner.