A seller in Frederick County receives an offer from Buyer A for $310,000 with no contingencies. While Buyer A's offer is pending, the seller receives a second offer from Buyer B for $325,000, contingent on the sale of Buyer B's current home. The seller wants to accept Buyer B's offer but protect herself if Buyer B's home does not sell. Her listing agent suggests including a 'kick-out clause' in the contract with Buyer B. Under Maryland real estate practice, what does a kick-out clause allow the seller to do?
Correct Answer
D) Continue marketing the property and, upon receipt of another acceptable offer, give Buyer B notice to waive the home sale contingency or be released from the contract
A kick-out clause (also called a 'right of first refusal' or 'bump clause') in Maryland real estate contracts allows the seller to continue marketing the property after accepting an offer with a home sale contingency. If the seller receives another acceptable offer, the seller must notify Buyer B, who then has a specified period (commonly 24–72 hours) to either waive the home sale contingency and proceed with the purchase or be released from the contract. This protects the seller from being locked into a contingent contract indefinitely while still giving the original buyer the opportunity to perform.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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