Ask the Realtor: What is an escape clause?

By Michael McKenna

An escape clause (also called a kick-out clause or a knockout clause) allows the seller to void the contract based on the provision specified in the contract. For example, a seller includes an escape clause in a contract that hinges on the buyers selling their own home before moving forward with the purchase of the new home. If the seller receives another offer that does not require the sale of a current home, the first buyer has a specific amount of time (usually 72 hours) to remove the home-sale contingency or to void the contract.

In the current market, more and more buyers depend on selling their first home to qualify for a loan to buy a new home. For this reason, a kick-out clause is quite common. This protects the sellers by allowing them to keep their home on the market.

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