When you’re in a hot real estate market, it’s not uncommon for sellers to use kickout clauses as a way to protect themselves should another buyer come in later with a higher offer.
A kickout clause is basically a clause in the contract that allows the seller to cancel the deal if they receive another offer that meets or exceeds a certain price.
The purpose of a kickout clause is to protect the seller in case another buyer comes in with a higher offer. It gives the seller the option to cancel the current contract and enter into a new one with the higher bidder.
Kickout clauses are often used in situations where there is a lot of competition for a property. They can also be used as a way to pressure buyers into making a decision quickly.
If you’re considering making an offer on a property that has a kickout clause, it’s important to be aware of the risks involved. There is always the possibility that the seller will receive another offer and cancel your contract.
If you’re working with a seller who has a kickout clause in their contract, be sure to submitted your highest and best offer upfront to avoid having your deal canceled.
You should also be prepared to move quickly if you do have an accepted offer, as the seller may only give you a short window of time to complete the sale before they move on to the next buyer.
Kickout clauses can be frustrating for buyers, but they’re a common part of the real estate market in hot markets. If you’re prepared for them, you’ll be in a better position to successfully purchase the property you want.