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As a real estate agent or home buyer, you might have come across the term « active under contract, no kick-out » while searching for homes. What does it mean, and why is it important? In this article, we`ll explain the meaning of « active under contract, no kick-out » and its significance in real estate transactions.

When a property is listed for sale, interested buyers make offers to purchase it. If the seller accepts an offer, they sign a contract with the buyer, and the property goes under contract. The status of the property changes from « active » to « under contract. » During this time, the buyer conducts inspections, obtains financing, and completes other due diligence activities before closing the sale.

However, there are situations where the seller might want to keep the property active on the market, even after accepting an offer. This is where « active under contract, no kick-out » comes into play. This status means that the property is still under contract, but the seller is willing to continue showing it to potential buyers. The seller can only accept backup offers during this time, and the original buyer still has the right to purchase the property. However, if the original buyer fails to perform, the seller can terminate the contract and accept a backup offer without penalties.

The « no kick-out » clause in the contract means that the seller cannot terminate the contract unless the buyer fails to perform. This provision protects the buyer from being kicked out of the contract if the seller receives a better offer. In essence, « no kick-out » puts the buyer in a stronger position and gives them peace of mind that they will not lose the property to a higher bidder.

The « active under contract, no kick-out » status can be beneficial for both buyers and sellers in certain situations. Suppose the seller has concerns that the original buyer might not be able to close the sale due to financing issues or other reasons. In that case, they might want to continue showing the property to backup buyers to ensure that they have a backup offer in case the original buyer fails to perform. Similarly, buyers who are looking for a specific property in a competitive market might still have a chance to purchase it if the seller has the « active under contract, no kick-out » status.

In conclusion, the « active under contract, no kick-out » status in real estate transactions means that the property is under contract, but the seller is willing to continue showing it to potential buyers. This status provides a safety net for both the buyer and seller and can be beneficial in certain situations. As a real estate agent or home buyer, it`s essential to understand this status and its implications when searching for homes.