Money Management

Legally, there is a way a seller can accept another offer, even after you have a contract. Here’s what you need to know. 

Imagine you’re a home buyer. You’ve looked for months and have finally found the home of your dreams. Everything is in place. You have loan approval from your mortgage lender, have told friends and family about your big move, and have even begun to decorate the home in your mind. And then your real estate agent calls to tell you that the seller has accepted another offer, and you won’t be getting the house unless you do one thing.

Kick-out clause

The kick-out clause, sometimes called a “bump clause” or “escape clause,” is a stipulation home sellers sometimes include in a real estate purchase agreement. It’s there to ensure the home seller doesn’t get stuck waiting while a contingency is met.

Let’s say you’ve made the offer on a house, but as part of your purchase offer, you let the seller know that you have to sell your current home before you can close on theirs. At the time you make the offer, the housing market is a little wonky. There are rumors that interest rates may rise, and sellers are becoming nervous about selling their property before the market slows down.

By inserting a kick-out clause in the agreement, the home seller is letting you know that they accept your offer — unless something better comes along. After all, if the market does slow, it’s possible that your current home will not sell as quickly as you hope. The home seller is not willing to take the chance of being stuck.

Original buyer’s option

In this scenario, you have one option: Remove your contingency. When a seller employs the kick-out clause, they give you a specified timeframe to remove the contingency (or contingencies) originally agreed upon. In this case, you must agree to purchase the home before selling your property. If you can’t do that, the seller is free to move on to the new buyer.

When kick-out clauses are the most popular

Given today’s low housing inventory and the number of potential home buyers compared to the number of homes on the market, kick-out clauses are popular. In fact, kick-out clauses are common during a seller’s market.

It doesn’t matter what the contingency is. For example, a buyer may request a home inspection, a home appraisal that meets or exceeds the amount they’ve offered, or any other contingency. If the home seller includes a kick-out clause, there’s a chance the buyer will be faced with losing the house unless the buyer agrees to drop their contingency.

When kick-out clauses are less common

Kick-out clauses matter far less when it’s a buyer’s market. In other words, when there are more homes on the market than there are buyers, the few buyers there are get to call the shots. If they want to include every contingency under the sun in their purchase offer, home sellers do not have much room to negotiate. After all, with so many houses on the market, the buyers can move on if the seller does not agree to their terms.

Kick-out clauses are designed to protect sellers, and if you’re selling your home, you may be grateful to have the option available. However, if you’re a home buyer, you must weigh the danger of buying a home with no contingencies against the risk of losing a house you want.

Signing a mortgage without a home inspection means not knowing in advance any repairs or improvements you’ll need to make. Agreeing to buy a house without an appraisal means saying you’ll pay the offer price, even if the home appraises for less. In other words, home buying becomes riskier.

Only you can determine whether carrying through with the purchase is important enough to take on the additional risks.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Sometimes a well-intentioned gift isn’t quite right. Learn your options for a gift card that’s not a fit for your needs. 

The winter holidays are now in the rearview mirror, and if the people in your life agreed with me that gift cards are great presents, you might now have a few hanging out in your wallet. In an ideal world, you’ll be able to spend those at your favorite retailers.

But what if a well-meaning friend or family member got you a gift card for a business that has no locations close to you? Or they just plain missed the mark and you don’t frequent that retailer at all? Here’s how you can extract cash (or goodwill) from that gift card.

Use it online

If the gift card is for a retailer you like but that has no locations that are convenient for you, you might be able to use it online instead. One pitfall with this is that you might have to pay for shipping on whatever you buy. This isn’t ideal, but if it ends up costing you a few dollars more than the gift card amount, that’s likely not such a big hit to your personal finances.

Consider regifting or swapping it

Some people consider regifting to be the height of tacky, but don’t be so quick to judge. There are miles of difference between finding a new home for a sweater that was picked out specifically for you (but isn’t your taste — oh well, they tried), and re-gifting a Starbucks gift card to your coffee-loving friend. Or you may have a friend or coworker who received a gift card they can’t use, too, and may be willing to swap cards at the same face value. Ask around in your local network.

If you have a loved one with a birthday or other special occasion coming up, they might be delighted to receive your unusable gift card. Pick out a nice greeting card (or even better — make one) to put it in, and you can make someone happy for a minimal (or no) hit to your checking account.

Resell it for cash

If all else fails and your gift card can’t be used online and no one you know would be interested in receiving it as a gift (or a swap), you still have another option. A few years ago, I got a gift card for a movie theater chain that had no locations anywhere near where I live. I did some web searching and came up with the site CardCash.

CardCash allows you to sell unwanted gift cards and receive up to 92% of the value for them. You’ll be paid by ACH deposit, PayPal, or even a check in the mail — or you can swap an unwanted gift card for one you do want (CardCash says this option gives you the most bang for your buck). It’s incredibly easy to fill in the details for a gift card and get an estimate of how much you can make from it. When I used this service, I was paid 80% of the value for my movie theater card — not bad! So even if you have no options to use or give away a gift card to someone you know, you can still get value from it.

One caveat: Expiration dates and fees

There is one thing you’ve got to watch out for with gift cards. Ideally, you’ve got many months until the card expires or starts charging fees against the unused balance — check the fine print on the back of the card (or call the 800 number listed there) to be sure. While you’re at it, double-check the balance — it wouldn’t be good to regift a card whose balance has already started to be eaten up by maintenance fees.

Gift cards really can be a thoughtful present, but it does you no good to sit on one you can’t actually use. Make one of the above moves to ensure the gift card goes to an appreciative new home — and you end up money ahead.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends PayPal and Starbucks. The Motley Fool recommends the following options: short March 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.

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Most people know Costco offers bulk discounts on groceries. But read on to find out about some amazing perks only true fans take advantage of. 

Costco is well-known for offering great prices on groceries and household items. The ability to buy in bulk means you can end up spending less on a wide variety of products from toilet paper to ground beef — which is great for your checking account balance.

But there’s actually a lot more to Costco than just industrial-sized jars of pickles or cases of ketchup. In fact, there are four perks that superfans know about, but others may not. They can provide much more savings than you might expect and more opportunities to improve your personal finances with your Costco membership.

1. Affordable custom printing

Costco has a partnership with Shutterfly, which is a photo printing service that allows you to print everything from your standard 4×6 photo print to a fancy photobook or a mug with your kid’s face on it (fitting, since they are probably the reason you drink so much coffee in the first place).

Costco promises 51% off all regularly priced orders at Shutterfly, as well as free shipping on any order over $49. With the standard price of a photobook starting at $29.98, you could save $15.29 or more just on that order alone thanks to your Costco membership. You can add your membership to your Shutterfly account and the discount will apply automatically whenever you place an order.

2. Discounts on vehicle purchases

Costco has arranged special discounted member pricing with more than 3,000 dealerships across the United States. The savings you’ll get when you buy your car through Costco can vary depending on which vehicle you’re interested in. As of January 2024, for example, you can get a $1,000 member-only incentive if you buy a brand-new Cadillac.

You can also get discounts on used vehicles if they meet eligibility requirements, and even save 15% off vehicle parts and accessories with a maximum of $500 per visit in discounts.

3. Affordable travel

Costco offers vacation packages, hotels, cruises, and rental cars. It also routinely runs special deals through its travel service. Whether you want a theme park vacation or a stay at a relaxing all-inclusive, you can most likely book through Costco’s travel service.

While it may seem odd to book a trip through your warehouse club, most who have done it have nothing but positive feedback. Reddit users indicate they saved a lot of money by booking through Costco, and received responsive service when they needed it (including a quick refund and solid protections from Costco when they had to cancel during COVID-19).

4. Low-priced floral delivery

If you want to make someone’s day special without charging a fortune on your credit cards, Costco floral delivery is another feature that you should take advantage of.

Costco offers a great selection of floral arrangements, including bouquets for birthdays as well as wedding flowers. Its prices are very competitive, too. You can pay $49.99 for 50-stem white roses, compared to $81.99 from GlobalRose.

Now you know that there is more to Costco than meets the eye. And these are just some of the unexpected Costco benefits you may encounter when you begin shopping there. Be sure to learn about all that Costco has to offer, so you can truly make the most of your warehouse club membership.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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It’s important to have the right insurance coverage in place to protect against devastating financial losses. Learn how to vet your coverage for 2024 and beyond. 

Buying insurance is absolutely essential for everyone who drives a car, lives in a house or apartment, or has family depending on them. But while it may be tempting to just put policies in place and forget about them, the process of getting covered is not a one-and-done task.

In fact, it’s important to do an annual insurance checkup. And since the new year is here, now is the time to take care of this important job. Wondering how to do that? Just take these steps.

1. Check coverages to make sure the right protections are in place

One of the first and most important things to do in an annual insurance checkup is to make sure that the right insurance coverage is in place. That’s because people’s coverage needs can change over time.

For example, building materials have become very expensive in recent years due to supply-chain issues caused by the pandemic. While construction prices have been falling during certain periods in 2023, many experts believe the price of building will remain pretty high throughout the 2024 year as a result of increased demand.

With higher costs for building, property owners may need to increase their home insurance coverage limits to avoid getting hit with extra losses they’d have to pay out of their bank account.

It could also be important to increase life insurance coverage after certain lifestyle changes, such as having a baby. Or drivers whose car values have fallen may need to buy gap insurance that pays the difference between what a car is worth and the amount owed on a car loan at the time of a crash.

There are dozens of possible reasons why insurance coverage needs would change, including lifestyle changes such as adding a pool at home or buying a new car, so it’s worth taking a close look at each insurance policy, making sure the coverage limits are high enough to repair or rebuild the asset, and making sure there are no risks that should be transferred to the insurer that there is currently no coverage in place for.

2. Get quotes from several insurers to make sure that the policy is still competitively priced

The next key step in an annual insurance checkup is to get quotes from different insurers. That’s because:

The insurer offering the best price may change from year to year.Insurers tend to charge more to people who they don’t think will shop aroundNew insurance options could become available that are better and cheaper

To get quotes, consumers should have their current policies in front of them. Visit the websites of home insurance providers, as well as those providing life insurance, auto insurance, and other kinds of insurance that are in place. Get an online quote, specifying the same types of coverage as current insurance provides, and check out prices from at least three or four different companies.

By completing these two important steps at the start of a new year, policyholders can make sure that they have the right insurance in place going into 2024 — so their assets are not at risk all year long.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Want to save money on car insurance? Learn how sharing your driving data with your car company could lead to cheap insurance. 

With the rise of digital technologies like mobile apps and smartphones, many companies are offering innovative new financial products for digital banking, online payments, and managing money. Complex financial products can be offered anywhere, via mobile device.

The insurance industry is also being transformed by digital technology that harnesses the power of data. One of these new types of insurance is called “embedded insurance.” With embedded insurance, companies — and not just insurance companies — are beginning to offer specialized insurance coverage in a variety of ways.

Let’s look at what embedded insurance means, and how it could help you save money on car insurance.

Embedded insurance: What it means and how it works

Accenture defines embedded insurance as “any insurance that can be purchased within the commercial transaction of another product or service.” Examples of embedded insurance might include buying car insurance for a rental car, getting an extended warranty on a new washing machine, or buying travel insurance as part of the process of booking a flight.

Digital technology is making it easier to sell embedded insurance to a wider range of customers, for various situations. Spot Insurance (getspot.com) is an insurtech startup that offers specialized embedded insurance for purchases like travel, concert tickets, and ski passes. With Spot’s injury insurance, skiers and snowboarders can purchase emergency insurance coverage along with their ski passes.

With embedded insurance, companies can offer you the right coverage at the right time — right at the exact moment when you might be worried about “what if I fall on the mountain while snowboarding” or “what if my family has a last-minute illness before our big international vacation?” Embedded insurance can offer people a higher level of convenience and peace of mind. And it’s also opening up new ways to save money on car insurance.

Another form of embedded insurance is also underway in the auto insurance world. But instead of buying insurance from a separate company, you can now buy auto insurance directly from your car company.

Embedded insurance: A new style of car insurance

Several major automakers have recently started to offer their own auto insurance policies. This is another form of embedded insurance, where you can buy car insurance straight from the same company that manufactured your vehicle.

Here are a few major car companies that are now offering embedded auto insurance.

Ford: Ford Insure

Ford Insure is a special type of car insurance for Ford vehicles of model year 2020 or newer. It uses connected car data to help you save money on car insurance by rewarding safe driving. After four to six months with Ford Insure, you might be able to save up to 40% on car insurance.

Ford Insure also offers a pay-per-mile car insurance plan, and there are discounts available if you bundle your car insurance with homeowners insurance. Ford also offers pet insurance through its underwriting partner, Nationwide.

GM: OnStar Insurance

General Motors (GM) is also offering embedded insurance, called OnStar Insurance. This insurance uses in-vehicle telematics technology to track driving data and reward safer driving. Like Ford Insure, it’s limited to newer model vehicles.

If you have a Buick, Cadillac, Chevrolet, or GMC vehicle from model year 2016 or newer, OnStar Insurance will work with your car’s connected vehicle technology. No app or telematics plug-in device is required!

OnStar Insurance is not just for new GM vehicles. Even if you have an older model vehicle, or drive a non-GM car, you can still get OnStar Insurance — but it will be a traditional car insurance plan, not the telematics version that rewards safer driving behavior.

Tesla Insurance

Tesla drivers can choose Tesla Insurance to insure their Tesla vehicles, which uses real-time driving data to determine your Safety Score. Each month, your Tesla Insurance premium is calculated based on your previous month’s driving data and Safety Score.

Unlike other telematics car insurance programs that might take several months to help you get a discount, Tesla Insurance works based on real-time data and delivers results fast. As of Jan. 6, 2024, Tesla Insurance is only available in the following 11 states:

ArizonaColoradoIllinoisMarylandMinnesotaNevadaOhioOregonTexasUtahVirginia

Bottom line: Embedded insurance is coming to the auto insurance industry. More auto insurance companies are looking for innovative ways to use driving data to help you save money. If you’re looking to save money on car insurance, your next big discount might come from inside the car!

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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Costco can terminate memberships of problem shoppers. Find out about some of the most common reasons this happens so you know what to avoid. 

If you like Costco, the last thing you’d want is to lose your membership. While this is uncommon, there are ways that shoppers get their memberships revoked.

Like many membership clubs, Costco reserves the right to terminate memberships at any time, including without cause. Now, it’s not something you need to worry about too much. Costco is known for having excellent customer service, and it’s not going to blacklist a member for no reason.

But to make sure you don’t run into any issues, it helps to know why Costco would terminate a membership. Based on online reports from Costco employees, here are the most common reasons.

1. Ignoring the receipt checker

Not everybody likes it, but the receipt check is part of shopping at Costco. There are a few reasons Costco checks your receipt when you leave, including to verify that you weren’t undercharged or overcharged.

Some members who bypassed the receipt checkers have had their memberships revoked. Even if you’re in a hurry, the receipt check doesn’t take long, and it’s one of the terms of membership.

2. Being rude or abusive to employees

As one would expect and hope, any type of hostility toward employees could lead to a loss of membership. That includes insulting, cursing out, and physically attacking employees. And according to reports by employees, those types of incidents have sadly all happened at Costco warehouses before.

3. Theft or fraud

Here’s another one that doesn’t need much explanation. If a Costco member is caught shoplifting or committing any type of fraud there, they’ll likely have their membership canceled. Most retailers have loss prevention and fraud detection systems in place to catch criminals. Costco also has an advantage in tracking down thieves, since it can look up their membership information.

4. Abusing the return policy

Costco is known for having an extremely flexible and generous return policy. It offers a risk-free 100% satisfaction guarantee. That means you can return most items at any time, no matter how long has passed since you made the purchase, and get a refund to your credit card or bank account. There are some exceptions, most notably electronics, which have a 90-day return period.

It’s fine to make the occasional return, including on items you’ve had for a long time. But shoppers who take it to an extreme may lose their memberships. Here are a few examples of what a Costco manager could frown on:

Shoppers who make a habit of buying, using, and returning the same products. One employee mentioned a member who was banned after returning eight TVs in a row, each of them right before the end of the 90-day return window.Shoppers who buy seasonal or holiday products and return them when they’re no longer needed. Some treat Costco as the place to get free rentals of holiday decorations or summer patio furniture.Shoppers who return partially used items. Some customers have returned a small remainder of food and beverage products.

Costco almost always gives a warning to those it suspects of abusing its return policy. If the member continues making those types of returns, they may not be a member much longer.

5. The revolving door membership

Wondering what a revolving door membership is? Well, Costco’s satisfaction guarantee also applies to memberships. If you’re not satisfied, it will cancel and refund your membership at any time.

A select few have seen this as a personal finance hack to get an infinite Costco membership for the price of a single year. Here’s what they do:

Sign up for Costco and pay the $60 membership fee.Cancel within 12 months and get a fee refund.Use the money from the refund to buy a new membership.

It’s OK to cancel a Costco membership and decide to come back later. But if a shopper seems to keep getting dissatisfied after 10 or 11 months of using their Costco membership, a manager could add a note to not let them sign up anymore.

It’s easy to keep your Costco membership

All the reasons that Costco would terminate a membership are blatant examples of bad (and sometimes illegal) behavior. If you’re a normal Costco shopper, you’ll be able to go there as long as you pay your membership fee every year.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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