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
Carolyn Ross
Carolyn Ross spent her career in the advertising world as a commercial photographer. She is no stranger to meeting challenging deadlines and working with many people in a fast paced environment.
She has shot for various magazines such as Architectural Digest, Boston Globe Magazine, Wellesley Weston, South Shore life as well Boston Magazine to name a few. Her love of homes and visual spaces has evolved through the years and has lead her to expand her career. She currently serves on the board of a national organization: The American Society of Media Photographers for the New England chapter. She has been involved in the school art programs as well as teaching photography classes.
Carolyn's expert knowledge of staging and art direction is what differentiates her from other agents. She has also taken her keen business background and artistic talents to successfully renovate numerous investment properties in the Metrowest area over the last several years.
This is what inspires her and with determination and passion, she will bring these unique skills to your next real estate transaction.
