What is a Hubbard Clause?

A Hubbard Clause creates a conditional purchase and sales agreement on the sale of a listed property.  The buyer using the Hubbard Clause then has the right of first refusal on that property.  If the seller receives another offer (from a third party), the buyer must either move forward with the purchase of the property or release the Hubbard Clause, effectively withdrawing their offer.  The seller can then sell their property to another buyer.

Per SmartMLS Rules and Regulations Section 16.1 :

Hubbard- A contingency clause indicating that the current property purchase is contingent upon the sale of an existing property.

The most common use case scenario of a Hubbard Clause is when a buyer cannot simultaneously afford two properties and still needs a place to live (they have not secured short-term housing).  If the buyer sells their current home before they find a new one, they have no place to live.  But if they try to purchase a new (second) home before they sell their current one, they may not qualify for a mortgage.

Note: if the sale of a property is contingent upon the seller finding another property to purchase, that is not a Hubbard Clause scenario and should not be designated as such in SmartMLS.

Related articles :

Marking a listing Hubbard Clause

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