Q. What is a kick-out clause?
A. Let’s you receive an offer that’s loaded with contingencies. The buyer wants an inspection contingency, a seller-the-existing-home-first contingency, an attorney approval contingency, a gold course membership contingency. You know this isn’t a great contract simply because the buyer has so many outs.
Well, you have an out, too. You can keep showing your home. The contract should specify that you will continue to show and market the home until the buyer drops the contingencies. If another offer comes in, you can go back to the first buyer and say, “Hey, Buyer B has offered the same amount of money as you, but there is only a financing contingency.”
Your original buyer then has the right to kick out the contingencies to meet the standard of the new contract. If he or she refuses to do this, and has not met the conditions of the contract (say, he or she hasn’t sold an existing home), you can cancel Buyer A’s contract and sell your home to Buyer B.