Special offer

Kickout Clause... a bird in the hand

By
Real Estate Broker/Owner with Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 GREC# 169695

You send an offer and it's met with resistance by the other agent because your buyer has to sell a house. The resistance is completely from the agent because she confesses that she hasn't even let her client know there is an offer yet.

If one of my sellers gets an offer and it's contingent upon a house selling I'd be doing homework.  I'd research the house for sale. I'd research the market in which the house was for sale.  I'd look at public records and recent sales in the neighborhood where that house was for sale. 

Now if that house isn't under contract then perhaps the right thing to do isn't to just accept a contract that three months out and hope for the best. But my advice to sellers would be to add a kickout clause and see if you can come to terms.

A kickout clause gives a buyer a negotiated period of time to perform or withdraw their offer so that a seller can keep their property on the market and still look at offers. If one comes along that a seller is willing to take they can accept as a backup and start the clock ticking on that clause. I personally recommend a seller not give more than 72 hours.

Because a bird in hand is better than two in the bush.

Posted by

706-485-9668  us on facebook

Tammy@Lake-Sinclair.com

(Click on Lane Realty Logo for web site)

Tammy Lankford, Broker/Owner

 

Broker License # 169695  Lane Realty License # H-11420

Real Estate Instructor License # 355089

Call me today for all your Lake Sinclair real estate needs.

 Search for homes on Lake Sinclair now

For readers who are not members of ActiveRain feel free to also add your comments or you can click on the EMAIL me link to the right of this blog and email me.  Thanks for reading.

All content belongs to me unless otherwise stated.  Do not use without permission.  Logos and photographs may also be copyright registered. Please do not use without my express written permission.

                                                                                                                  

          

Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

In a seller's market at least in my area, the seller may get a month stay for free to allow sellers to find a place. Last 10 years I have never processed a contingency offer ever.  The VA and FHA sale is also problematic as appraisals values do not come even close to sale price.  Conventional or cash with quick closing is what the sellers prefer these days. Some sellers cash out their equity and rent for awhile. 

Oct 12, 2015 12:57 PM
Tammy Lankford,

it's no sellers market here.

Oct 12, 2015 01:05 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Ditto that, Tammy. 

"First Right of Refusal", 48 hours max.   Although, the listing will now show in the MLS as "Contingent", and may deter other Selling Agents from showing the property.

Oct 12, 2015 01:00 PM
Tammy Lankford,

I try to consider it might be a holiday weekend where they can't get the go ahead from their lender.

Oct 12, 2015 01:06 PM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Tammy, this post demonstrates one of the gifts of AR:  comparing notes on business practices.  So far I have not had to deal with a kickout clause. I'm bookmarking this page for future reference.  "A Bird in the hand..." is always a good thing!

Oct 12, 2015 01:39 PM
Tammy Lankford,

even if it has a little puppie drool on it. LOL  And yes, I've always enjoyed learning about things in different states and it's helped me in situations and also in explaining how things differ to buyers in those states.

Oct 12, 2015 02:34 PM
Jerrill Ewing
N & J Lake Properties, LLC - Eatonton, GA
Builder

Kick outs are pretty common here.  And it's never a bad idea to have a contract in the wings.

Oct 12, 2015 03:17 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Tammy. A very good business practice and very good guidance for your clients.

Oct 12, 2015 06:32 PM
Tammy Lankford,

Thanks Joe.

Oct 13, 2015 09:03 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Tammy. The kickout clause can be a friend or foe depending on mnay factors. Choose wisely and it is a helpful tool. Enjoy your day!

Oct 12, 2015 09:05 PM
Tammy Lankford,

I don't advise sellers to take a contingency contract without one.

Oct 13, 2015 09:04 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good advice for sellers. Your seller clients are fortunate to have you as their agent.

Oct 12, 2015 09:30 PM
Tammy Lankford,

in a buyers market it's the right advice in my opinion.

Oct 13, 2015 09:04 AM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Tammy. I think you have described this really well.

Oct 12, 2015 09:54 PM
Tammy Lankford,

Thanks Sheila. 

Oct 13, 2015 09:05 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Years ago, our MLS rules were that if you took a contingency contract you had to put the listing in as pending, not you don't. There is a field for back ups wanted and it stays active. I never have gone beyond 48 hours on the kick out so I agree with the limited time.

Oct 12, 2015 10:52 PM
Tammy Lankford,

we have a category for Continent in our MLS, but it still shows in searches.

Oct 13, 2015 09:05 AM
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Tammy Lankford ,  I have not had to use a contingency clause, but came close before.

Oct 13, 2015 01:01 AM
Tammy Lankford,

the time may come Larry.

Oct 13, 2015 09:05 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

As I understand it we are bound to present all offers. That agent would be in violation of something. A contingent sale would not go down well in our sellers' market but it still does need to be presented. I like your idea of a kickout clause. It certainly is fair to all concerned.

Oct 13, 2015 05:19 AM
Tammy Lankford,

We still have 12 months worth of inventory and are in a buyers market here Jane.

Oct 13, 2015 09:06 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Tammy, I echo  Jane Peters comment ... both of us being from California and both of our markets being strong seller markets. However, when the market dictates otherwise it is always a good business practice to engage with offers and do what we can to make them work ... a kick out clause would do just that.

Oct 13, 2015 08:54 AM
Tammy Lankford,

Yeah, I wish that would happen here for my sellers sakes, but we have 12 months of inventory putting us clearly in a buyers market

Oct 13, 2015 09:07 AM
Maureen Fukumoto
Help-U-Sell Realty Pro - Mililani, HI
Maureen

Aloha Tammy,  I just read your comment to Kathleen.  I can't remember when I last saw 12 months of inventory.  That's hard.  I use kickouts often although I have never had to enforce it.  Different makets need different practices.

Oct 13, 2015 05:03 PM
Tammy Lankford,

12 months of inventory is a vast improvement over the 33 months worth we had this time last year. LOL  We were about 18 to 24 months behind the rest of the wold for the "crash" and also the recovery is being slow here as well.  Prices are very flat.

Oct 13, 2015 10:19 PM
Maureen Fukumoto
Help-U-Sell Realty Pro - Mililani, HI
Maureen

It looks like the comment I was referring to just disappeared.  Hmmmm, did I imagine it?

Oct 13, 2015 05:06 PM
Tammy Lankford,

I still see it, but I have had those responses disappear,

Oct 13, 2015 10:20 PM
Claude Labbe
RLAH / @properties - Washington, DC
Realty for Your Busy Life

Sure, the seller's agent prefers no kickout, full asking price, all cash and no contingencies.  While I'm at it, I'd like to be 22 years old again.

Neither is reasonable at the moment, so perhaps the seller's agent should consider a more realistic approach to working with a buyer who actually wants their home. Perhaps a discussion with their seller client.

Who knows...maybe everyone would get into a contract and a sale sooner rather than later.

Oct 16, 2015 02:51 PM
Tammy Lankford,

at the end of the day, the seller accepted our offer. :)

Oct 16, 2015 03:05 PM