by TJ AndersonThis prediction from Dwell magazine, from late last year, just made its way into my Facebook feed: “Step Aside, Subway Tile — Penny Tile Is the New Classic.” Penny tile,
Real Estate Terms Nashville Homebuyers May Not Know Starting With The Kick Out Clause
by TJ Anderson
It’s still largely a seller’s market here in Nashville real estate, and it has been for some time. Which can sometimes make buying a home in Nashville a little more complicated, and a little more intricate, particularly if you also own a home you need to sell.
Case in point: Recent clients were looking to buy a home in East Nashville, while selling a home in Inglewood. Although they’d already been through the homebuying process, being a seller, too, brought some learning experiences. Including the lesser-known “kick out clause.”
What a kick out clause is, and why it exists
The majority of the time, homeowners who are looking to buy a new home in Nashville have to include contingencies in their offer — they’ll need to sell their current home to buy a new one. It’s common, and in a less seller-leaning market, won't usually inject a hiccup into the offer process.
Right now in Nashville, though, sellers and builders can sometimes have their pick of buyers, and be particularly picky about a deal that snugly suits their timeline and financial expectations. Contingencies present a potential hiccup, so sellers may be less excited to see them.
In comes the “kick out clause.”
Essentially, how it works: A seller will accept your offer, including the contingency on the sale of your current home, so long as you agree to allow them to continue to market the home while your contract is in place.
If those sellers get another offer that’s more appealing while we’re all waiting to close, they can give you notice — 48 to 72 hours or so, depending on the details of your accepted offer. The ball’s then in the buyer’s court: You can opt to drop your contingency, and keep the new home under contract, or you can balk, and the seller will move on and accept a new offer.
The good and less good in a kick out clause
This option has its pluses and minuses for buyers.
The main reason a kick out clause can be a good option: In a market like this, sellers just may be less inclined to accept an offer with a home-sale contingency. This is a way to get your offer to go through, without the seller feeling like they could be stuck with a long wait and a closing that never happens.
If you have a great Nashville Realtor (I know one!), your current home will be priced fairly and marketed well, and chances are you’ll march through to closing without a hitch. So the seller feels comfortable, you can move forward, and everyone’s happy.
The down side: There’s always a chance your current home will be a little more challenging to sell. Maybe it has some problems that haven’t been addressed, maybe the location lends to slower sales. Whatever the reason may be, a longer stretch of time means the sellers have more of an opportunity to market the place you have under contract, and to get offers they might like.
Heartbreak is always a possibility here. The East Nashville clients I worked with came to me after a previous contract with a kick out clause fell through, and the experience had them pretty dejected. It’s tough, when you have your heart set on a new home, and the deal gets pulled out from under you. The flip side: The seller would’ve never accepted their offer in the first place without that kick out clause. It was just the slow-going with their existing home that murked things up.
When it works
Once we got them back to househunting, my clients found a new construction East Nashville home that they loved, and we put in an offer, and got met with another kick out clause.
I hit the ground running with marketing their existing home, set up an Open House, and got their place under contract that night. The home sale and home purchase both went forward without a stumble, and we all got to raise a glass to a happily-ever-after.
Twists like a kick out clause can be a little intimidating, but my job as a Nashville Realtor is to make the whole homebuying and home-selling process as clear as possible, and to make whatever curveballs come up work. I take pride in working hard to navigate every twist and every turn to get a sale or a purchase to move through. And I’m always happy to walk buyers and sellers through every part of the real estate landscape, from the easiest steps to the less-traveled paths.
Are you thinking about buying a home in Nashville, or selling a home in Nashville, or buying and selling a home in Nashville? Please let me know if I can help. Call or email TJ Anderson Homes here, and tell me about your plans.
TJ Anderson is a Nashville Realtor with Benchmark Realty who's helped countless clients both buy a home and sell a home in Nashville, Tennessee. He blogs about Nashville regularly, from Nashville-area....
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