Definition
This contract clause allows the seller to keep marketing when you have contingencies. If they receive a better offer, they notify you—match the new terms or the contract ends.
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Kick-out clause (or kick-out provision) occurs when buyer's offer has contingencies (financing, inspection, appraisal). Clause allows seller to keep marketing; if better offer appears, seller can 'kick out' first buyer by notifying them they must waive contingencies or buyer is released. Example: buyer offers $400k contingent on appraisal. Seller receives cash offer for $410k. Seller can notify first buyer: 'Accept appraisal contingency removal or I'm selling to cash buyer.' Kick-out clauses are negotiated: seller wants ability to bail if better offer appears; buyer wants commitment. Kick-out protects seller: they can improve deal if possible. Kick-out risks for buyer: not truly committed (can be kicked out), incentive to waive contingencies quickly (remove kick-out opportunity). Understanding kick-out: if you make contingent offer, seller might have kick-out right. Faster contingency removal protects you from kick-out. Kick-out is less common in weak markets (sellers accept offers as-is); more common in strong markets (multiple offers likely).
Pro Tip
Understand kick-out clauses. Plan to waive contingencies quickly in competitive markets.
Example
Buyer offers $400k contingent on appraisal. Seller receives $410k cash offer. Under kick-out clause, seller notifies buyer: waive appraisal contingency or deal is off.