Kick Out Clause Explained
A kick out clause can be an important clause to add to your sale agreement if your buyer is also selling their home at the same time. This clause protects you from delays in the sale of your home, in the case of complications that arise during the sale of theirs.
This term refers to a provision in real estate contract that determines a “home sale contingency period” during which the buyer has a certain amount of time (generally 30 to 90 days), to complete the sale of their home, or decide to move forward with the purchase and sign the sales contract (therefore committing to a payment or penalty if they then decide not to buy). During the contingency period, if the buyer does not have a contract on their home, you can continue to show the home to others, and if you are able to find a better offer you can notify the first buyer, in which case – if the buyer cannot purchase the home – the agreement can be legally voided with no exposure to the seller.
Back to: Closing on your home sale
What is the home selling process?
There are few times in life more stressful than the home selling process with many unknowns, potential pitfalls, and opportunities to consider.
Let our friendly ‘how tos’ guide you through the process to ensure your home sells as fast as possible at a price you can live with (and hopefully buy another home to live in!)
How Long Does It Take to Sell a Home?
Your timeline may vary, but the following is a good guideline
- Building a Team: 5-7 days
- Listing: 3-5 days
- Obtain an Offer: 6-10 weeks
- Clear to Close: 2-8 weeks
- Turn Over Possession: 0+ days
So, on average a home seller will spend 8-12 days preparing, 45-70 days waiting on and sifting through offers, and 14-60 days from clear to close. For some folks, the process can be extremely quick taking as little as 30 days total, while for others, the time to a first offer can be several months.
The home selling journey is an emotional one, but does it have to be a long one? Some home sellers will be surprised by how quickly the process can go by, and for others, it will be just the opposite. The length of time varies from situation to situation, but here is some additional explanation of the estimates in the home-selling timeline that will help you prepare emotionally, and plan financially.
Listing: 3-5 days
The length of this depends mostly on how quickly your agent gathers all the information on the home, and how quickly you can stage and photograph the property.
Obtain an Offer: 60-70 days
Of these steps, this is the one that will vary the most wildly, as well as being is one of the hardest steps because it depends on many external factors. Here, the home seller is at the whims of the home buying market. In a seller’s market, this could take a week while in a buyer’s market, it could take months and months. Make sure you are keeping in touch with your agent to offer your home at a price that is competitive, without giving anything away.
Clear to Close: 14-60 days
Once you have snagged a potential buyer who you feel is a good fit for your home, many sellers try to rush to close. But in this step, you are going to have to work against your instincts. A successful close means taking every part of your due diligence with negotiating and finalizing a contract very seriously.
Turn Over Possession: 0+ days!
The homebuyer will want to take possession of their new home as soon as possible, so it’s smart to have a move-out plan already in place. If circumstances require it, part of the closing contract can involve renting the home back for a few weeks from the new buyer. But optimally, you’ll be ready to move from the moment of the close.
The Important Steps in Your Home Selling Journey
While some of the details of the home selling process can vary from state to state (and even county to county), there are some important steps in home selling that will be found pretty much anywhere. If you are thinking of selling your home soon, then review these steps first before beginning your journey.
Learning the Market & Determining Your Home’s Value
Some people recommend contacting a real estate agent first, but knowing a bit about the market on your own can go a long way before you attend that first meeting. Do some homework and find out how the homebuying market is performing in general, and how things are shaping up locally.
Are market conditions leaning to sellers? To buyers? Are they neutral? These questions should come into play when pricing your home. In addition, every home seller should look at Comparables – these are homes listed or recently sold with similar features to your home – which may include the total number of bedrooms, square footage, and approximate age. This will give you a baseline against which you can establish a sale price.
Assembling Your Team
Many people will be involved in the sale of your home: the appraiser, the inspector, the selling agent, the buyer’s agent – and in some cases, at least one real estate lawyer. For the seller, assembling this team begins with finding a good agent.
From the time you begin working with them, your agent will be the point person for drawing all the other professionals involved to your team together. A good agent will know the top real estate professionals in the area, but that doesn’t mean you shouldn’t also do your own homework. Look up the best appraisers in your area and see if the two lists match.
As for the agent themselves, you should meet with at least 3 agents before deciding on who you want to work with. When looking for an agent, hire one that is not only knowledgeable, but also one that listens to you, and really sees what you see in your home.
Thinking of going the “For-Sale-By-Owner” route? Even if you don’t hire an agent, you will still need a team to help you along the way. Selling a home even with an agent can be a full-time job, so selling the property yourself can be doubly so. But if you love doing things yourself, you’re detail-oriented, and you aren’t afraid of legal documents, then by all means – list the home yourself.
Prepping Your Home for Sale
Increase your home’s curb appeal on the outside, and get it ready to be shown on the inside. Paint and trim, de-clutter and clean, host a garage sale and get ready for staging. Some people attempt the self-staging route, while others hire a professional. Most seller’s agents know a few staging professionals or know something about the process of staging themselves. Many find that paying for a good staging expert is well worth the cost.
Listing Your Home
Work with your agent to list your property. Creating a good listing means marketing your home properly, so talk to your agent about how to best bring out the personality of your home. Consider all the different styles of photography out there, and don’t be afraid to explore new technology that may further increase your home’s visibility.
The Open House
With more and more of the home buying process being done online these days, chances are that those who are coming to your house in person have already done some homework on your listing. For these people, the open house serves to confirm that your home looks as good in person as the professional photographs made it look online.
But the open house is about more than just confirmation. A well-staged and well-presented house can create word of mouth or a positive and noteworthy impression in an agent’s mind. Remember that when a buyer’s agent brings around a potential buyer, even if that buyer isn’t right for your home, they may know someone else who is.
Offers on Your Home
When offers begin coming in on your home, you will have several important decisions to make. Are the offers coming in lower than you expected? How do you deal with multiple offers? How much and when do you counter?
Hopefully, you have professionals in your corner to help you through this process, or you have some experience doing it yourself. As the seller, you’re going to have to find an offer that stands out, and be prepared to negotiate the right deal for your home, navigating any possible twists in the journey that the buyer’s appraiser or the home inspector might send your way.
The Closing (Sale)
From here, it will mostly be your agent dealing with the buyer’s agent on the final details of the contract. This could include a few more repairs to the home, or at the very least, the transfer of utilities. Then, you will need to ensure that all of the paperwork for the real estate attorney is signed, initialized, and notarized. Once the contract is clear to close, you’ll be planning your move!
The Best Advice for Home Sellers
Homeowners naturally love their homes and want to get the best price for them. But many homeowners make simple mistakes when it comes to selling their property. So what are the most important things to keep in mind as you begin you home-selling journey? We’ve broken it down into the top three pieces of advice.
Find a Good Agent
While some homeowners decide to go the “for-sale-by-owner” route, having a good agent can transform your home-selling experience. Interview at least three agents before you settle on one, and make sure you ask them a lot of questions.
Ask them about their track record selling homes, what makes them different from other agents, and how they would market your home. You’re going to want to find an agent that not only is knowledgeable but also listens to you – someone with whom you feel you have good communication. Most agents are specialists in either a neighborhood or a type of property, so find one that has a specialty that covers your home.
Selling a home is like a business, and every business needs good marketing. Clean and de-clutter your home, tidy up the lawn, and spring for a new coat of paint. Hire a professional photographer so your home sparkles online. A professional stager knows how to make your home look good in photos and in person. You’ll want to strike the right balance of making your home neutral enough to appeal to anyone, while highlighting the home’s personality so that it stands out. Finally, make sure the pets have somewhere else to stay before and after the open house.
Set a Reasonable Price
Real estate agents say that time and again, homeowners, whether they are first-time sellers or not, overprice their home. Set a reasonable price from the beginning, based on Comparables – homes in the same market with same features as yours. An overpriced home may languish for a long time on the market, and you’ll have to drop the sale price lower than you would have if you had set a more moderate price to begin with. Pay attention to those Comparables and be competitive, remembering that they say the most expensive home in the neighborhood sells last.
Home Selling Checklist
Homes.com has prepared this checklist to help you keep track of the major process-points in your home selling journey.
Do Your Homework
- Look at your finances and budget out home repairs and other home sale closing costs
- Seek advice from real estate professionals, including legal and tax specialists for your specific situation
- Address any already-known need for repairs on your house
- Do some research to better understand where the real estate market is, and what your sale price might look like
- Seek out a real estate agent, interviewing 3 of them before hiring one
Make Sure Your Home Is in Top Condition
- Windows, Doors
- Heating and Cooling
Price the House
- Have your home appraised
- Take another look at the market and set a comparable price
Marketing/Prepare for the Open House
- Clean and De-Clutter
- Make a plan for the Kids and Pets
- Hire a Professional Stager
- Hire a Professional Photographer
Negotiate the Offer
- Draw up purchase contract, have attorney review
- Determine contingencies
- Negotiate with buyer through your agent
- Additional home repairs, if necessary
- Make a move-out plan, communicate possession with buyer
- Sign purchase contract
- Close the contract through escrow
- Meet final inspections/contingencies
- Arrange transfer of utilities
- Deliver title and other documents to buyer/local government
- Received loan commitment letter from buyer
- Pay closing fees