Texas · TREC 10-6Texas sale of other property addendum (TREC 10-6): how the kick-out works
The TREC Addendum for Sale of Other Property by Buyer (10-6) makes the purchase contingent on the buyer receiving the proceeds from selling another property by a set date; if that does not happen or is not waived by then, the contract terminates automatically and the earnest money is refunded. If the seller accepts another written offer, the seller can require the buyer to waive the contingency within the days written – the buyer waives by written notice and additional earnest money, or the contract terminates.
How the addendum works
A – the contingency
The contract depends on the buyer receiving the proceeds of the sale of the buyer's property by the date written – which should be no later than the closing date. Not satisfied or waived by then: the contract terminates automatically, earnest money refunded.
B – the kick-out
If the seller accepts another written offer, the seller notifies the buyer and requires a waiver; the buyer must waive by the day written after the seller's notice, or the contract terminates automatically, earnest money refunded.
C – how to waive
Only by written notice to the seller and depositing the additional earnest money written in the addendum with the escrow agent.
D – after waiving
If the buyer waived and then fails to close only because the other sale's proceeds did not arrive, the buyer is in default.
E – strict deadlines
Time is of the essence; strict compliance with the times is required.
What the TC tracks
- The contingency date – and that it is not later than the closing date.
- The date of any seller's kick-out notice and the waiver deadline it starts.
- Receipt of the additional earnest money if the buyer waives.
- The status of the buyer's other sale – its own closing date and title company.
Questions about the sale of other property addendum
What is a kick-out clause in Texas?
Paragraph B of TREC 10-6: if the seller accepts another written offer, the buyer must waive the sale contingency within the days written after the seller's notice or the contract terminates.
How does the buyer waive the contingency?
By written notice to the seller and depositing the additional earnest money stated in the addendum with the escrow agent.
What happens if the buyer's home does not sell in time?
If the contingency is not satisfied or waived by the date written, the contract terminates automatically and the earnest money is refunded.
What if the buyer waives and then cannot close?
If the only reason is that the other sale's proceeds did not arrive, the buyer is in default and the seller may use the contract's remedies.
What date should the contingency have?
The form notes it should be no later than the closing date in paragraph 9 of the contract.
Texas forms
Track both deals – the buyer's sale and purchase – in ClosingCode, and add the contingency and waiver dates to the timeline with reminders.
Start free trialSource: Texas Real Estate Commission, TREC No. 10-6 Addendum for Sale of Other Property by Buyer (12-05-11).
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.