The Winchester – Frederick County, VA pending home sales for at the beginning of April 2016 rests at 265. Of those pending sale, only 6 properties have a built in kick-out that may allow the properties to return to the “for sale” market. In one case, the kick-out is the need for a third-party approval, or a short sale where the seller’s bank must also approve the sale. Four kick-outs relate to the buyer’s need to sell her home, and one kick-out is contingent on an appraisal of the purchased property. The appraisal must meet the offer price. If it doesn’t, the lender will only lend based on the lower value of the offer price or the appraisal.
Kick-outs are allowed in contracts to protect both buyer and seller. If a buyer cannot acquire financing, he can’t buy. If a home doesn’t appraise for the offered amount, new negotiations may be necessary, or both parties can walk away without penalty. If a buyer needs to sell his home prior to completing his purchase of another home, he may get timed out and lose his purchase.
All contingencies have a period in which they must be completed. If that date comes and goes without a successful completion of the contingency, both parties may chose to stay in the deal with an extension, or either party can leave the deal without consequences.
Another contingency in a purchase is the home inspection. If a property has more issues than a buyer is willing to accept, or a seller is willing to repair, a contract may be voided with no penalties. In most cases, kick-out conditions may be negotiated between the buyer and seller. If both parties wish to stay in the deal and find a mutually satisfying solution, the negotiations will accommodate the changes.
The number of pending sales at the beginning of April more than doubled the number completed sales in March 2016. The trend is a positive one that may give some insight into where the Winchester – Frederick County, VA real estate market is heading. When you’re ready to buy or sell in the Winchester – Frederick County, VA real estate market, give your Cornerstone Business Group, Inc., real estate agent a call. We are your local real estate sales pros.
Kick-out Clauses in Real Estate Deals