What Does Contingent With No Kick-Out Mean? A Clause That Affects Your Offer


“Contingent with no kick-out” is one of those real estate clauses that can be attached to a buyer’s offer on a house. Like active or sale pending status, a house marked with this clause can give buyers a sense of whether or not the house has received an offer and how close sellers might be to closing the deal.

It’s uncommon (but not unheard of) for buyers to put an offer on a house that’s pending, so is it worth your time and energy to make an offer on a house whose status is contingent with no kick-out?

Let’s analyze this clause to figure out if—and how—this might affect you as a buyer.

What does contingent with no kick-out mean?

In a nutshell, contingent with no kick-out means an offer has been accepted on the house and the seller cannot accept another buyer’s offer unless certain requirements are not satisfied.

The term “contingent” means the sale depends on something else happening, explains Kyle White, an agent with RE/MAX Advantage Plus in Minneapolis. The second part of this, “no kick-out,” means that a seller cannot kick the buyer out of the contract and accept another offer unless there’s proof the contingencies will not be met.

What contingencies count?

Contingencies can be anything from the results of a home inspection to a short sale contingency, where the buyer and seller are waiting for the seller’s lender’s approval, which can take three to six months or more, says John Kantorski, a Realtor® with Cummings & Co. in Baltimore, MD.

Often, the contingency will be the sale of another home, says White. Buyers will make an offer on a home with the contingency that they have to sell their own house first. The seller accepts that offer, specifies a period of time during which the other house must be sold, and says that they won’t accept any other offers, even if they are better. Once the timeframe expires, the seller can put the house back on the market.

When would a contingent with no kick-out clause be used?

This clause is most commonly used in slower markets where sellers have less power, White says.

“They will be hesitant to accept an offer with no kick-out if the market is hot, because it’s a gamble for sellers, who are making a bet that their house will not get a better offer.”

Should you make an offer anyway?

White usually advises buyers to pass on making an offer on a home whose status is contingent with no kick-out.

“I don’t want to waste a buyer’s time or have them fall in love with a home, if there’s a good chance it won’t be available,” he says. You can still keep an eye on it, he says, but in his experience, a majority of homes labeled contingent with no kick-out don’t go back on the market.

Deirdre Woollard contributed to this story.

The post What Does Contingent With No Kick-Out Mean? A Clause That Affects Your Offer appeared first on Real Estate News & Insights | realtor.com®.

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