When buyers have to sell their old houses before they can purchase new ones, it's fairly common for sellers to put a kick-out clause in the contract after accepting the buyers' offer on their homes. This clause lets sellers continue showing their homes to other people and accept any other offers they may receive. If the seller notifies you they want to invoke the kick-out clause in your contract, here are your options for proceeding.
Continue with the Sale
The kick-out contingency in your contract typically gives you a short window of time to respond to the seller's notice, commonly 72 hours. If you really want the home, you have the right of first refusal and must notify the seller within that time period that you want to continue with the sale. However, you will then be required to close on the house sale immediately afterwards.
While you may have wanted to use the proceeds from your home sale to fund your new purchase, there are a couple of ways you can still buy the new house without having sold your old one. One option is to get a bridge loan from the bank. This is an unsecured short-term loan that provides the funds needed to purchase a new home and must be repaid when you sell your old one. Be aware, though, the interest rates for these loans tend to be high and banks usually only approve them for customers who already do business with them.
The other option is to take out a loan against the equity in your old home and pair it with any savings you have to come up with the purchase price for the new house. However, you may have to take your home off the market to get approved as many banks may be leery about lending money on a transaction that will be paid back immediately since they will make very little money in the process.
Ask for More Time
Your second choice in this situation is to ask the seller for more time to offload your home. Whether or not the seller will agree to this depends on how close you are to selling your old home. For instance, the seller may be willing to grant your request if you're about the close on the sale of your old house, but decline if it doesn't appear you've made any progress on finding a buyer.
You may be able to sweeten the deal and get the seller to agree by offering more money or attractive concessions (e.g. letting the seller stay in the home rent-free for a period of time). Consider the seller's needs and goals to come up with a counteroffer that encourages them to stick with you.
For more information about this issue or help finding a new home if your sale falls through, contact a real estate agent. They can help with looking at various different homes for sale to find the right one.Share