Understanding the Hubbard Clause: What Connecticut Homebuyers Need to Know

Navigating the real estate market can be complex, and understanding the different clauses and terms is essential for making informed decisions. One term you might encounter, especially in Connecticut, is the Hubbard Clause. Here’s a breakdown of what a Hubbard Clause is and what it means if you’re considering an offer on a property subject to this clause.

What is a Hubbard Clause?

A Hubbard Clause, also known as a right-of-first-refusal clause or kick-out clause, is a contingency in a real estate contract that allows a buyer to place an offer on a new property before selling their current home. This clause is particularly common in Connecticut real estate transactions. Essentially, it provides a buyer with a set period to sell their home in order to finalize the purchase of the new property. If the buyer cannot sell their current home within this period, the Hubbard Clause permits the seller to continue marketing the property and accept backup offers.

Key Components of a Hubbard Clause:
  1. Time Frame: The clause specifies a period during which the buyer must sell their current home (e.g., 30, 60, or 90 days).
  1. Notification Period: If another buyer comes forward with a competing offer, the original buyer is usually given a 24-72 hour window to decide whether they can remove their contingency and proceed with the purchase.
What Does it Mean for Buyers?
Buying With a Hubbard Clause:
  • Security: It provides a level of security for buyers who need the equity from their current home to purchase a new one.
  • Flexibility: It gives buyers more time to sell their existing property without losing out on their desired new home.

However, it’s important for buyers to act quickly if another offer comes in. If they can’t remove the contingency within the allotted time, they might lose the opportunity to buy the new property.

Offering on a Property Subject to a Hubbard Clause:

When you’re making an offer on a property that already has a Hubbard Clause in Connecticut, there are a few things to keep in mind:

  1. Competitive Advantage: Your offer might have a competitive edge if you can proceed without contingencies, as sellers may prefer the certainty of a non-contingent offer.
  1. Notification Period: If your offer is accepted, the original buyer will be notified and given a specified period (often 24-72 hours) to decide whether to remove their contingency and proceed with the sale.
Steps to Consider:
  1. Understand the Terms: Make sure you fully understand the terms and time frames stipulated in the clause.
  1. Consult with Your Agent: Your real estate agent can provide valuable insights and help you structure your offer to be as appealing as possible.
Conclusion

The Hubbard Clause can be a useful tool for both buyers and sellers in Connecticut, providing flexibility and extra time to secure their desired home. However, it’s essential to understand the specific terms and conditions to maneuver effectively in a competitive market.

If you have any questions or need further clarification about Hubbard Clauses or any other real estate terms, feel free to reach out for guidance. Understanding these nuances can ensure you make informed decisions every step of the way.

Happy house hunting!