Contingency clauses in a real estate contract typically come from the buyer. However, there are some contingencies sellers can use in a sale negotiation as well. While they’re less common, knowing the basics can help in selling your home. Here are the main contingencies every seller should know:
Kick-Out Clause
A kick-out clause is a useful balance to a buyer’s home sale contingency clause. If a buyer adds a contingency stating that they need to sell their current property before being able to buy the new one, it puts a more strict time limit on the deal. Unfortunately for sellers, this means that the buyer can back out of the purchase if they don’t sell their existing home in time. It also means that for all the time spent waiting for the buyer’s sale to go through you haven’t been able to market the home.
By using a kick-out clause a seller can continue to market the listing even while the deal is pending. If you get a better offer during the home sale contingency period, you can give the original buyer 72 hours to secure funds to complete the purchase. If they don’t, you can move ahead with the new offer. This levels the playing field for sellers and helps reduce the risk of losing time and money if a deal falls through.
Rent-Back Contingency
If you’re selling your home while trying to buy a new one, a rent-back contingency is a great option to have. This type of contingency helps you if you sell your home before finding a new one. While normally this would mean moving into a temporary living situation for the in-between time, a rent-back contingency will let you rent your sold property back from the new buyer. You can keep living in the home you sold for an agreed time period.
Home of Choice Contingency
A home of choice contingency is like a rent-back contingency because it helps sellers avoid awkward gaps in residence. If you find a buyer for your home before you find a new home for yourself, you can use a home of choice contingency to continue looking for a new home for a set amount of time. This basically delays the entire sale process by an agreed-upon number of days and lets the seller back out of the deal if they don’t find a new place in time. Like a rent-back contingency, this can save sellers money, time and hassle in trying to find temporary housing between homes.
Seller contingencies are uncommon in most real estate transactions but are still important to know. Sellers should consider these contingencies and whether they can use them to help their selling situation.
About the Author
John Hassler
Our goal is overcoming the housing challenge and getting to know one another, here is a bit about me. Providing you with professional guidance for buying and selling homes stems from an in-depth knowledge of the Twin Cities Best Homes and Neighborhoods. For us, the process is a simple one and starts with a conversation about your needs, desires and concerns. No contracts or promises up front. I ask only for the opportunity to understand your housing needs and have you become comfortable with my real estate knowledge and experience. I have lived throughout the metro area, have sold close to 1000 homes as well as built, remodeled and designed homes. My passion is assisting you in discovering that perfect home, location and setting that will bring you and your family pleasure and comfort for years to come. I would enjoy the opportunity to meet with you at your home, business or over a cup of coffee. I am readily available by email, text and enjoy a phone call as well. Please don’t hesitate to contact me, as I always enjoy a new opportunity to help someone!
