What is a Kick-Out Clause and How Does it Work in California?
Selling your home in California often means juggling offers, contracts, and contingencies. One of the trickiest? When a buyer wants your home—but only if they can sell theirs first. That’s where a kick-out clause can help you stay in control.
In this post, we’ll explain how kick-out clauses work, when to use them, and what to watch out for. We’ll also share how Osborne Homes helps sellers avoid these complications with fast, all-cash offers—no waiting, no contingencies.
What Is a Kick-Out Clause?
A kick-out clause is a seller’s safeguard in real estate contracts when accepting contingent offers. Sometimes referred to as an escape clause or right-of-first-refusal clause, it allows sellers to continue marketing their property and entertain other offers while working with a buyer who has contingencies.
If a better offer comes in, the original buyer typically has 48-72 hours to remove their contingency or lose the deal. This prevents sellers from being stuck in limbo while waiting for buyers to sell their current homes or secure financing.
How Does a Kick-Out Clause Work?
A kick-out clause creates a safety net for sellers while still working with contingent buyers. Here’s how it plays out in real life.
1. You accept a buyer’s contingent offer.
For example, the buyer might need to sell their current home before closing on yours. You agree to the offer but include a kick-out clause in the contract.
2. Your home stays listed as “contingent with kick-out.”
This tells other buyers your home is still available, and that the current deal has conditions attached.
3. Another buyer submits a stronger offer.
If a second buyer comes along—with no contingencies or better terms—you notify the original buyer.
4. The original buyer has a short deadline to act.
They typically have 48 to 72 hours to do one of the following:
- Remove their contingency and move forward with the purchase
- Provide proof that they’re close to resolving their contingency (e.g., a signed offer on their current home)
- Walk away from the deal
5. If they don’t act in time, you’re free to move on.
You can cancel the first agreement and accept the backup offer.
The 48-hour kick-out clause is especially common because it gives buyers just enough time to make a serious decision without leaving you hanging for days. It puts healthy pressure on buyers to act quickly while giving you the freedom to consider better options.
When to Use a Kick-Out Clause
Not every real estate transaction requires a kick-out clause, but certain situations make them particularly valuable.
In Strong Seller’s Markets
In neighborhoods where homes sell quickly with multiple offers, kick-out clauses are your safety net. They allow you to accept a contingent offer while keeping your options open for stronger, faster buyers who might come along. Think of it as keeping your home in play while still working with interested buyers—a smart strategy when demand is high.
When Accepting Offers With Significant Contingencies
When buyers need to sell their current home before buying yours, timelines become unpredictable. This clause prevents you from being stuck in waiting mode indefinitely. You can work with these buyers while maintaining the freedom to pursue other opportunities if a more prepared buyer comes knocking.
For Sellers on Tight Timelines
If you need to close by a specific date due to a job relocation, financial deadline, or other life transition, kick-out clauses help maintain your schedule. They ensure contingent buyers either move forward promptly or step aside, giving you control over your moving timeline rather than leaving it to chance.
When Working With Buyers Having Financing Uncertainties
Buyers with questionable funding create unnecessary risk. Kick-out clauses protect you when working with someone whose mortgage approval seems uncertain. This safety net prevents your property from being tied up while lenders process paperwork or buyers struggle to secure adequate financing.
Pros and Cons of Kick-Out Clauses
Like most things in real estate, a kick-out clause has its good and bad sides. Let’s look at each so you can decide if it’s right for your situation.
The Benefits to Sellers
- You maintain control of your home sale even after accepting a contingent offer
- It creates urgency for buyers to resolve their contingencies quickly
- Your home stays on the market, potentially attracting even better offers
- Knowing other buyers might swoop in often makes your current buyer more serious
- Clear timelines reduce uncertainty for everyone involved
- You can continue showing your home while working with a contingent buyer
Potential Drawbacks
- Some buyers may avoid properties with kick-out clauses entirely
- Buyers who need time to sell their current home might walk away
- It can create tension during negotiations, especially in balanced markets
- The clause requires careful legal wording to avoid disputes later
- More paperwork and communication is needed throughout the process
- Many buyers will skip your listing, not wanting to fall in love with a house they might lose
- This shrinking of your potential buyer pool can be significant in markets where buyers have choices
- If your original buyer backs out, you’re starting the selling process over again
In competitive markets where homes are selling in record time, these clauses usually pay off. But every situation is unique, just like every home.
5 Things Sellers Should Know Before Using a Kick-Out Clause
Before incorporating this clause into your real estate contract, consider these important factors.
1. Work With a Real Estate Pro You Trust
Having a good real estate agent or attorney in your corner is crucial when using kick-out clauses. These professionals can help you write the clause in plain English that actually protects you. They know the right words to use about timeframes and notifications that keep things clear and prevent those awkward “but I thought you meant…” conversations later on.
2. Know the Buyer’s Reality
Take time to get to know your buyer’s reality before agreeing to contingencies. Is their house in a hot neighborhood that’ll sell quickly, or are they being overly optimistic? Ask for their pre-approval letter or proof they’ve already listed their home. A little detective work now can save you from checking your phone for updates months down the road.
3. Expect to Negotiate
Including a kick-out clause can open the door to back-and-forth with your buyer. They may ask for a longer decision window—like 72 hours instead of 48—or request special conditions that soften the impact of the clause. Go into negotiations with a clear sense of your must-haves (like a firm closing date) and your nice-to-haves (like a few extra hours for the buyer to respond). That way, you can stay flexible without giving up control of your timeline.
4. Research Your Local Market
Kick-out clauses can be a smart move—but only if they make sense for your area. In hot seller’s markets where homes get multiple offers in days, they’re often expected and give you a competitive edge. But in slower markets, they might scare off buyers who feel like they’re competing with ghosts. Talk to your real estate agent about recent market trends, how often these clauses are used in your neighborhood, and whether one could help—or hurt—your chances of a smooth sale.
5. Have a Backup Plan
Hope for the best but plan for that “we need to move on” moment. Keep those backup buyers warm with occasional updates. Know exactly how to properly end the original agreement without legal headaches. Have your listing photos ready to go again if needed.
Want to Skip the Fine Print and Sell Without Stress?
While kick-out clauses can protect you during traditional home sales, they still leave you playing the waiting game with buyers who might not come through. At Osborne Homes, we do things differently. We buy houses with cash—no contingencies, no financing delays, and no fine print.
Our approach puts you back in control of your moving timeline. Instead of wondering if your buyer will ever sell their current home or get approved for that loan, you can close on your schedule and move forward with your life. We make fair cash offers that let you skip the typical real estate hassles. If you’re ready to sell without the stress, give us a call—we’re here to make selling your home straightforward again.
Kick-Out Clause FAQs
Small intro to frequently asked questions about kick-out clause in real estate
1. What is an example of a kick-out clause?
A common example is when a seller accepts a buyer’s offer that’s contingent on selling their current home. The seller includes a kick-out clause that allows them to keep marketing the property. If another buyer makes an offer, the first buyer has 48–72 hours to remove their contingency or the seller can move on.
2. What is the 48-hour kick-out clause in real estate?
The 48-hour kick-out clause gives the buyer 48 hours to remove their contingencies (like selling a current home) once the seller receives another offer. If the buyer doesn’t act in time, the seller can cancel the original contract and accept the new one.
3. What is the 72-hour kick-out clause?
Similar to the 48-hour version, the 72-hour kick-out clause gives buyers three days to meet conditions or remove contingencies after the seller receives a competing offer. It provides more flexibility but may slow down the transaction slightly.
4. Is a kick-out clause good for the buyer?
It depends. A kick-out clause gives buyers time to sell their home or sort out financing—but it also means their offer isn’t fully secure. If a stronger offer comes in, they could lose the deal unless they’re ready to proceed quickly.
5. What happens if a backup offer is made on a property when a kick-out clause is in effect?
If a backup offer is made, the seller notifies the original buyer. That buyer then has a set number of hours (usually 48–72) to remove their contingency. If they can’t, the seller can accept the backup offer and move forward with that buyer.
6. What can a seller do if a buyer backs out?
If a buyer backs out without a valid reason outlined in the contract, the seller may keep the buyer’s earnest money deposit. Afterward, the seller can relist the property or consider backup offers already received.
