Contracts
A Rhode Island seller accepts an offer but wants to continue showing the property. They insist on a 'kick-out clause.' What does this allow?
AThe seller to raise the price after acceptance
BThe seller to 'kick out' the buyer and accept a better offer, giving the original buyer a specified time to remove their contingencies or lose the deal✓ Correct
CThe buyer to cancel the contract for any reason
DThe listing agent to terminate the listing agreement
Explanation
A kick-out clause (or right of first refusal clause) allows the seller to continue marketing and accept a better offer, but gives the original buyer notice and a short period (typically 72 hours) to remove their contingencies or have their contract terminated.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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