You can back out of buying a house at any point before you sign at closing. Whether it costs you depends on timing. Cancel under a contingency in your contract, before its deadline and in writing, and you normally get your earnest money back. Cancel without one and the seller can usually keep the deposit.
Stage by stage
| Where you are | Can you cancel? | Your deposit |
|---|---|---|
| Offer made, not yet accepted | Yes, by withdrawing it in writing. | Not at risk; usually not yet paid. |
| Attorney review or option period | Yes, generally for any reason. | Returned. An option fee isn’t. |
| Inspection period | Yes, over the home’s condition; in many contracts for any dissatisfaction. | Returned. |
| Other contingencies still open | Yes, if the reason matches one: loan denied, low appraisal, title problem. | Returned if it matches. At risk if it doesn’t. |
| All contingencies removed or expired | You can, but it’s a breach of contract. | Usually kept by the seller. |
| After closing | No. | Applied to your purchase. |
The contingencies that protect you
- Inspection: problems with the home.
- Financing: your loan is denied after a good-faith application.
- Appraisal: the home appraises below the price and the seller won’t adjust.
- Home sale: your current home doesn’t sell in time.
- Title and HOA documents: problems that can’t be resolved.
Each has a deadline. See contingencies, explained, and think hard before waiving any of them.
State differences
- Attorney review: in states such as New Jersey and Illinois, attorneys can cancel the contract within a few business days of signing.
- Option period: in Texas, buyers pay a small fee for a set number of days to cancel for any reason.
- Due diligence fee: in North Carolina, buyers pay the seller a non-refundable fee for a period in which they can cancel for any reason.
- Active removal: in California, contingencies generally stay in place until you remove them in writing. In many other states they expire on their own when the deadline passes.
How to cancel properly
- Find the contingency and its deadline in your contract.
- Send written notice the way the contract requires, usually on a state form through your agent or attorney, before the deadline.
- Include what’s needed: the lender’s denial letter, the appraisal, the inspection objection.
- Sign the release so the escrow holder can return your deposit. If the seller won’t sign, contracts usually call for mediation.
What it costs even when you’re protected
You won’t get back what you’ve already spent: the inspection, the appraisal and any rate lock or application fees, often $1,000 or more in total.
Without a contingency
- The seller usually keeps the earnest money, commonly 1% to 3% of the price; see what is earnest money?
- Some contracts let the seller sue for additional losses or to force the sale. It’s uncommon, since relisting is faster.
- Sellers will sometimes agree to a release for part of the deposit, especially if they have a backup offer.
Before you walk away
Ask whether the problem can be fixed another way: a repair credit, a lower price, or more time. See negotiating repairs and the appraisal gap. The seller’s side of this is in can a seller back out?
General information, not legal advice. Your contract and your state’s law decide.
Common questions
Can I back out of a house offer after it’s accepted?
Yes. If you cancel under a contingency and before its deadline, you normally get your earnest money back. Otherwise you’ll likely lose it.
How late can I back out of buying a house?
Any time before you sign at closing, but after your contingency deadlines pass it will usually cost you your deposit.
Can the seller sue me for backing out?
It’s possible, but uncommon. Most contracts make the earnest money the seller’s main remedy, and sellers usually prefer to relist quickly.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.