So what is a Hubbard clause? Basically, from the buyer's point of view, it's a kind of right of first refusal. It means that the seller has agreed to the terms of the buyer's offer, but that the buyer doesn't have to buy unless either s/he sells his/her current home, or until another bona fide acceptable offer comes along. At that point, the buyer can agree to lift the condition about sale of a prior property and perform, or cancel the contract. The seller cannot take another offer, even if it's better, until the time period for the buyer's choice has passed.
Why do people use Hubbard clauses? To be clear, I am not a big fan of them. I think they are better for buyers than for sellers. However, sometimes sellers like them because there is a feeling that the buyer is psychologically committed to the property, and will work diligently to perform, or even take the risk that s/he can sell the current property before the closing date, letting the Hubbard expire and taking the chance.
Buyers use them because it gives them a clear last chance to purchase, and limits the price to what has been agreed to in the sales contract. In some cases, they may actually be able to perform without selling the first house, but the Hubbard clause gives them comfort that they won't have to have two mortgages.
One downside for the seller is that some buyers will not look properties with Hubbard clauses, if they know about them, because they may well be wasting their time. The agent representing them may feel even more strongly about that possibility. Of course, the seller's inability to take a later, higher offer is an even bigger negative, which could be countered by arguing that the first offer is almost always the best offer, and s/he has that in hand, with the Hubbard clause contract.
Reasonable people can disagree about Hubbards, but everyone should know what they are. This to me is unlike the Stayman convention, which I can say exists, but cannot explain!
