What is a kick-out clause and does it protect me as a seller?
Answered by Allen Markel, REALTOR®, Texas Premier Realty ·
Short answer
A kick-out clause lets you keep marketing your home and accept a better offer even after you've accepted one with a contingency (usually the buyer's sale of another home). It protects you by giving you an escape route if a stronger offer comes in. The buyer gets a short window to remove their contingency or you can terminate and move forward with the new offer.
What a kick-out clause does
A kick-out clause is a negotiated addition to a purchase contract. It applies when the buyer's offer includes a contingency, most commonly that they must sell their current home first. The clause gives you the right to keep your home on the market and accept backup offers.
When you receive a competing offer you prefer, you notify the first buyer that you have received another offer. The kick-out clause then gives that buyer a set time, negotiated between you and them, to remove their contingency. If they do not remove it within that window, you can terminate the contract with them and accept the new offer instead.
The clause is entirely negotiable. The time frame, the trigger (whether any competing offer counts or only one you want to accept), and the exact language all depend on what you and the buyer agree to in writing.
How it protects you as a seller
A kick-out clause reduces your risk when you accept an offer with a contingency. Without it, you are locked in. If the buyer's home does not sell, or if they cannot remove the contingency in time, the deal falls through and you have lost time on the market.
With a kick-out clause, you are not truly off the market. You can continue to show the home and negotiate with other buyers. If a stronger offer arrives, you have a path to act on it. This is especially valuable in a market where multiple buyers are interested or where the buyer's contingency is uncertain.
The clause does not guarantee you will receive a better offer, and it does not eliminate the risk that the first buyer will remove their contingency and proceed. But it shifts the balance in your favor by keeping your options open.
What to watch for
A kick-out clause is only as good as its terms. Make sure the time frame is realistic for the buyer to act. Too short and it may feel punitive; too long and it defeats the purpose. Discuss with your REALTOR what window makes sense for your market and the buyer's situation.
Also clarify what counts as a competing offer. Does any offer trigger the clause, or only one you signal you are willing to accept? The answer affects how often you will invoke it and how the buyer perceives fairness.
Finally, remember that a kick-out clause does not guarantee the buyer will remove their contingency. They may choose to let the contract terminate and walk away. Your leverage depends on how motivated they are and how strong the competing offer is.
Talk to us to find the right option for your circumstances.
Common follow-up questions
Is a kick-out clause required in Texas?
No. It is entirely optional and negotiated between you and the buyer. Not all contracts include one, and not all buyers will agree to one.
What happens if the buyer does not remove their contingency within the kick-out period?
You can terminate the contract and accept the competing offer instead. The original contract ends, and you are free to move forward with the new buyer.
Can I still show my home to other buyers if I have a kick-out clause?
Yes. The whole point of a kick-out clause is to keep you in the market. You can continue to show the home and negotiate with other buyers.
What if no competing offer comes in?
The kick-out clause sits dormant. You proceed with the original buyer as if the clause were not there, assuming they meet their contingency.
Sources
Talk it through with Allen
A short call can turn a general answer into one for your address, your timeline and your numbers.
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Answers describe transactions and public data. They are not legal, tax or financial advice.