Chapter 1
Virginia Real Estate Law & Agency
Course: Virginia Real Estate Exam Prep
Subject: Virginia State Salesperson Exam Prep
Chapter: Contracts Virginia Forms
The "Home Sale" Contingency & Kick-Out Clauses:This is a tough sell in a balanced or seller's market because it makes the sale uncertain. A savvy listing agent will insist on a "kick-out" or "bump" clause.
- How it Works: The contract is contingent on Buyer A selling their current home. If Seller receives a better, non-contingent offer (Buyer B), Seller must notify Buyer A. Buyer A then has a short period (e.g., 24-72 hours) to remove their home sale contingency and proceed, or the contract is terminated and Seller can accept Buyer B's offer.
Case Study: The Missed Deadline
- The Core Issue: The buyer's agent failed in transaction management. As soon as it became clear the lender might not meet the deadline, the agent should have prepared an Amendment to the Contract extending the financing contingency date and had the buyer present it to the seller for signature before the original deadline expired.
- The Harsh Result: Once the deadline passes, the contingency is waived. The contract becomes firm. If the buyer then fails to secure financing, they are in default, and the seller is entitled to the earnest money as liquidated damages. This highlights why agents must maintain a strict calendar of all contract dates.