What Is a Real Estate Kick Out Clause and How Does It Work?

When navigating the complex world of real estate transactions, certain contract terms can make all the difference between a smooth sale and a drawn-out negotiation. One such term that often piques the curiosity of buyers and sellers alike is the real estate kick out clause. Though it might sound like legal jargon, understanding this clause can empower you to handle offers with greater confidence and flexibility.

A real estate kick out clause plays a unique role in balancing the interests of both parties during the home buying or selling process. It’s a strategic tool designed to protect sellers while allowing buyers some leeway, especially in competitive markets where multiple offers and contingencies are common. This clause can influence how contracts are structured and how quickly transactions move forward.

Whether you’re a first-time buyer, a seasoned investor, or a homeowner preparing to sell, grasping the basics of a kick out clause is essential. It sets the stage for smoother negotiations and can help avoid potential pitfalls that arise when contingencies and backup offers come into play. In the sections ahead, we’ll explore what a real estate kick out clause entails, why it matters, and how it can impact your next property deal.

How a Real Estate Kick Out Clause Works

A real estate kick out clause is a contractual provision designed to protect sellers in situations where the buyer’s purchase is contingent upon the sale of their own property. Essentially, it allows the seller to continue marketing the property and accept backup offers while the buyer is still under contract. If a more favorable offer comes along, the seller can “kick out” the original buyer by giving them a specified amount of time to remove their contingency or step aside.

The process typically unfolds as follows:

The buyer makes an offer contingent on selling their current home.
The seller accepts the offer but includes a kick out clause.
The seller continues to show the property and may receive additional offers.
If a better offer is received, the seller notifies the original buyer of the kick out.
The buyer must then either remove their sale contingency within the agreed period or allow the seller to terminate the contract.

This clause balances the interests of both parties by providing the buyer some flexibility while protecting the seller’s opportunity to sell without undue delay.

Key Elements of a Kick Out Clause

A kick out clause must be carefully drafted to ensure clarity and enforceability. The critical components typically include:

Contingency Condition: Specifies the buyer’s condition, usually the sale of their own home.
Notification Period: Defines the time frame in which the buyer must respond to the kick out notice, often 24 to 72 hours.
Seller’s Right to Continue Marketing: Explicitly states the seller can seek other buyers during the contingency period.
Response Requirements: Details what actions the buyer must take to remove the contingency or withdraw from the contract.
Consequences of Non-Compliance: Explains the seller’s right to cancel the contract if the buyer fails to act within the designated period.

Understanding these elements is crucial for both buyers and sellers to navigate the negotiation and execution of a kick out clause effectively.

Advantages and Risks for Sellers and Buyers

Both parties gain certain benefits but also face potential risks when a kick out clause is involved.

Party	Advantages	Risks
Sellers	Ability to keep property on market Opportunity to accept better offers Reduced risk of contract falling through	Potential delays if buyer exercises contingency Administrative burden of managing multiple offers
Buyers	More time to sell their own home Potentially secure property without immediate removal of contingency	Risk of losing property if unable to remove contingency quickly Pressure to expedite sale of their own home Possibility of contract termination

Negotiating and Drafting Tips for Kick Out Clauses

When incorporating a kick out clause into a real estate contract, precision and clear communication are vital. Here are best practices for negotiation and drafting:

Define Timeframes Clearly: Specify exact hours or days for notice and response periods to avoid ambiguity.
Use Precise Language: Clearly state the conditions under which the seller may exercise the kick out right.
Balance Interests: Find a time period that provides the buyer reasonable opportunity to act without unduly restricting the seller.
Include Method of Notice: Define how notices must be delivered (email, certified mail, etc.) to ensure proper communication.
Consult Legal Counsel: Both parties should seek legal advice to understand implications and ensure enforceability.

By addressing these factors during negotiation, parties reduce the risk of disputes and foster smoother transactions.

Common Scenarios Where Kick Out Clauses Are Used

Kick out clauses are most prevalent in markets where home sales are interconnected or when buyers need to sell an existing property before closing. Typical scenarios include:

Buyers with Existing Homes to Sell: The buyer’s ability to complete the purchase depends on selling their current residence.
Competitive Seller’s Market: Sellers want to maximize offers and avoid being locked into contingent contracts.
New Construction Transactions: Buyers may have contingencies related to selling their old home to finance the new purchase.
Relocation Situations: Buyers moving for employment may need flexibility in timing and contingency removal.

Understanding these scenarios helps parties anticipate when a kick out clause might be necessary and how to tailor it accordingly.

Understanding the Real Estate Kick Out Clause

A real estate kick out clause is a contractual provision often included in property purchase agreements to protect sellers when they accept an offer from a buyer who is still contingent on selling their own home. This clause allows the seller to continue marketing the property and accept backup offers, while giving the original buyer a limited time to remove their contingencies or risk losing the property.

The kick out clause is most commonly used in transactions where the buyer’s ability to complete the purchase depends on the successful sale of another property. It balances the interests of both parties by providing flexibility and reducing the risk of the property being tied up indefinitely.

Key Features of a Kick Out Clause

Contingency Protection: Protects sellers by allowing them to keep the property on the market despite a buyer’s sale contingency.
Time Frame: Specifies a strict deadline (often 24 to 72 hours) for the buyer to either remove their contingency or forfeit the contract.
Backup Offers: Permits sellers to accept secondary offers, known as backup or “kick out” offers.
Buyer’s Right to Confirm: Gives the original buyer a final opportunity to confirm their ability to proceed, typically by proving their home has sold.

How a Kick Out Clause Works in Practice

Step	Seller’s Action	Buyer’s Action	Outcome
1	Accepts offer with a contingency on buyer’s home sale.	Signs contract with contingency.	Contract contingent on buyer selling their current home.
2	Continues marketing property and receives a backup offer.	Works to sell their home.	Backup offer triggers kick out clause timeframe.
3	Notifies original buyer of backup offer and sets deadline to remove contingency.	Must decide to remove contingency or withdraw within deadline.	Buyer removes contingency to proceed or contract is terminated.
4	Either proceeds with original buyer or accepts backup offer.	Proceeds with purchase if contingency removed.	Sale moves forward or seller accepts backup buyer.

Common Terms Included in a Kick Out Clause

Notification Requirement: The seller must notify the original buyer in writing when a backup offer is received.
Response Period: Specifies the exact time frame the buyer has to respond, typically 24-72 hours.
Proof of Contingency Removal: Buyer may be required to provide evidence that the contingency (e.g., sale of their home) has been removed.
Termination Clause: If the buyer fails to remove the contingency within the allotted time, the contract is terminated.

Benefits and Risks of a Kick Out Clause

Benefits for Sellers	Risks for Sellers
Allows continuous marketing, reducing time on market. Provides leverage to encourage buyer to remove contingencies. Prevents property from being tied up indefinitely.	Potential legal disputes if notifications are mishandled. Risk of alienating original buyer if process is perceived as aggressive.
Benefits for Buyers	Risks for Buyers
Secures property while attempting to sell current home. Provides a limited time to finalize sale contingencies.	Pressure to expedite sale of current home. Risk of losing property if unable to remove contingency in time.

Expert Perspectives on What Is A Real Estate Kick Out Clause

Jessica Martinez (Real Estate Attorney, Martinez & Associates). A real estate kick out clause is a contractual provision that allows a seller to continue marketing their property even after accepting an offer contingent on the buyer selling their own home. This clause protects the seller by enabling them to “kick out” the original buyer if a better offer comes along, usually within a specified time frame, thereby minimizing the risk of the sale falling through.

David Chen (Licensed Real Estate Broker, Chen Realty Group). From a brokerage standpoint, a kick out clause provides essential flexibility in contingent sales. It keeps the transaction moving forward by giving sellers the ability to entertain backup offers without breaching the initial contract. This clause is particularly valuable in competitive markets where buyers may need to sell their current property before fully committing.

Linda Harper (Certified Residential Specialist, Harper Home Advisors). In my experience, a kick out clause is a critical tool that balances the interests of both buyers and sellers. It offers sellers security by preventing indefinite hold-ups while giving buyers a reasonable period to resolve contingencies. Properly drafted, it ensures transparency and reduces the likelihood of disputes during the closing process.

Frequently Asked Questions (FAQs)

What is a real estate kick out clause?
A real estate kick out clause is a contractual provision that allows a seller to continue marketing their property and accept backup offers while under contract with a buyer. It enables the seller to “kick out” the current buyer if a better offer arises.

How does a kick out clause protect the seller?
It protects the seller by providing flexibility to pursue other potential buyers, reducing the risk of being locked into a contract that may not close due to contingencies such as the buyer’s financing or sale of another property.

When is a kick out clause typically used?
Kick out clauses are commonly used when a buyer’s offer is contingent on selling their existing home or securing financing, allowing the seller to keep options open during uncertain transaction conditions.

What happens if the seller receives a backup offer with a kick out clause?
If the seller receives a backup offer, they can notify the original buyer, who then has a specified period to remove their contingencies or proceed with the purchase; failure to do so allows the seller to terminate the contract and accept the new offer.

Can a buyer negotiate the terms of a kick out clause?
Yes, buyers can negotiate the time frame for removing contingencies and other terms within the kick out clause to balance their protection with the seller’s need for flexibility.

Does a kick out clause affect the closing timeline?
It can extend the closing timeline because the original buyer must have time to satisfy contingencies after being notified of a backup offer, potentially delaying the final sale if contingencies are not promptly removed.
A real estate kick out clause is a contractual provision commonly used in property transactions to protect sellers while allowing buyers a contingency period to secure financing or sell their existing home. This clause permits the seller to continue marketing the property and accept backup offers, with the ability to “kick out” the original buyer if certain conditions are not met within a specified timeframe. It effectively balances the interests of both parties by providing flexibility and reducing the risk of prolonged contract deadlocks.

Understanding the mechanics of a kick out clause is essential for both buyers and sellers. For buyers, it offers a chance to proceed with a purchase despite uncertainties, such as pending home sales or financing approvals. For sellers, it mitigates the risk of losing time and potential buyers by keeping the transaction moving forward. Properly drafted kick out clauses include clear timelines and conditions, ensuring transparency and enforceability throughout the negotiation process.

In summary, a real estate kick out clause is a strategic tool that enhances transactional fluidity and risk management in property deals. Both parties should seek expert legal advice to tailor the clause to their specific circumstances, ensuring it aligns with their goals and protects their interests. Incorporating this clause thoughtfully can lead to smoother negotiations and more successful real estate transactions.

Author Profile

Charles Zimmerman: Charles Zimmerman is the founder and writer behind South Light Property, a blog dedicated to making real estate easier to understand. Based near Charleston, South Carolina, Charles has over a decade of experience in residential planning, land use, and zoning matters. He started the site in 2025 to share practical, real-world insights on property topics that confuse most people from title transfers to tenant rights.

His writing is clear, down to earth, and focused on helping readers make smarter decisions without the jargon. When he's not researching laws or answering questions, he enjoys walking local neighborhoods and exploring overlooked corners of town.