Can a buyer back out of an accepted offer in Canada?

Yes, but only without penalty if the offer has unfulfilled conditions (such as financing or a home inspection) and you don't waive them before the condition deadline. If all conditions have been waived or the offer was submitted firm (no conditions), backing out lets the seller claim your deposit and potentially sue you by the seller for damages including carrying costs, relisting costs, and the difference in sale price if they sell for less.

What happens to the deposit if I back out?

If the deal ends because a valid condition wasn't met by the deadline, your deposit is returned, normally once both parties sign a release. If you back out after conditions have been waived or on a firm offer, the seller can claim the deposit. However, the deposit is held in trust and cannot be released without both parties' agreement or a court order — meaning disputes can lock up the deposit for months.

Can a seller back out of an accepted offer?

A seller can legally back out before accepting the offer. Once the seller has signed the Agreement of Purchase and Sale, they are bound. If the seller refuses to close, the buyer can sue for damages or, where the property is shown to be unique (for example, no comparable home is available), for specific performance (a court order forcing the sale). Since the Supreme Court's 1996 Semelhago decision, courts don't assume every home is unique.

Is there a cooling-off period for home purchases in Canada?

There is no general cooling-off period for resale homes in most provinces, with two exceptions. A buyer of a new condo from the developer in Ontario can cancel by written notice that the developer (or its lawyer) receives within 10 days of the latest of getting the disclosure statement, the condominium guide and a copy of the signed agreement, and gets back all the money paid toward the price, with interest. In B.C., a buyer of a home can cancel an accepted offer within 3 business days by giving written notice and paying the seller 0.25% of the price, which comes out of the deposit; the right can't be waived, and homes on leased land, auction and court-ordered sales, and new developments with their own rescission right are exempt. (B.C.'s rule has applied since January 3, 2023.) New home purchases in some provinces also have rescission rights under consumer protection legislation.

Can my real estate agent make me complete a purchase?

No. Your agent cannot force you to complete a purchase. However, if you signed a binding APS and breach it, you face legal and financial consequences from the seller — not from your agent. Your agent may be entitled to their commission regardless if the deal falls through due to your breach, depending on the representation agreement terms.

Can You Back Out of a Home Offer in Canada? Legal Consequences and Options (2026)

Here is when a buyer or seller can walk away from a home purchase, what it costs, and how buyers protect themselves.

When can a buyer legally back out?

Scenario	Can You Back Out?	Deposit Returned?	Risk
Condition not fulfilled (financing, inspection)	Yes	Yes, under a mutual release	Low: this is what conditions are for
During irrevocability period (before seller accepts)	Usually not: an offer stated to be irrevocable (often signed under seal) stays open until its deadline	N/A	Offer stays open during this window
After conditions waived	Only by breaching the contract	Seller can claim it	Seller can sue for damages
Firm offer accepted	Only by breaching the contract	Seller can claim it	Seller can sue for damages
BC rescission period (3 business days)	Yes (0.25% fee)	Yes, minus the fee	Low
Ontario new condo (10-day rescission)	Yes	Yes	Low

The cost of backing out after going firm

When a buyer backs out of a firm or waived-condition deal, the potential financial exposure includes:

Cost	Description	Typical Amount
Deposit	Seller claims the deposit	Often 1%–5% of the price, more in competitive markets
Carrying costs	Seller’s mortgage payments, property tax, utilities while relisting	$3,000–$10,000+ per month
Relisting costs	Agent commissions, staging, photographer	$10,000–$50,000
Price difference	If seller eventually sells for less	Can be $50,000–$200,000+
Legal fees	Both parties’ legal costs if it goes to court	$10,000–$50,000+ each

Illustrative example

You agreed to buy a home for $800,000 with a $40,000 deposit. After waiving conditions, you back out. The seller relists and sells for $720,000 six months later. Potential claim:

Item	Amount
Price difference	$80,000
Carrying costs (6 months)	$24,000
Relisting and commission costs	$35,000
Legal fees	$15,000
Total potential damages	$154,000
Less: deposit forfeited	−$40,000
Additional amount seller could claim	$114,000

When can a seller legally back out?

Scenario	Can Seller Back Out?	Consequence
Before accepting the offer	Yes	No consequence — seller has not signed
Counter-offer (rejects original)	Yes — counter-offer replaces original	Original offer is dead
After accepting (APS signed)	Breach of contract	Buyer can sue for specific performance or damages
Buyer fails to fulfill conditions	Deal dies automatically	No consequence
Mutual release signed	Yes	Both parties agree to walk away

Seller consequences for backing out

A buyer can seek specific performance, a court order forcing the seller to complete the sale, but since the Supreme Court of Canada’s 1996 decision in Semelhago v. Paramadevan, the buyer has to show the property is unique enough that money wouldn’t make up for losing it. Otherwise the remedy is damages (money).

Alternatively, the buyer can pursue damages:

Cost of alternative housing (if they bought elsewhere for more)
Legal fees and moving costs
Lost mortgage rate (if rate hold expired)
Emotional distress damages (rare but possible in egregious cases)

BC’s rescission period

British Columbia introduced a buyer rescission period for residential real estate on January 3, 2023. It works like this:

You give written notice within 3 business days after the offer is accepted (Saturdays and holidays don't count).
You pay the seller 0.25% of the purchase price, taken from the deposit, and the rest of the deposit comes back to you.
The notice names the property, the buyer cancelling (with a signature), each seller and the date, and is served by registered mail, fax or email with a read receipt to the seller's contact in the contract.
The right can't be waived.
It doesn't apply to homes on leased land or leasehold interests, auction sales, or sales under a court order or court supervision.
It doesn't apply to a new-development purchase covered by section 21 of the Real Estate Development Marketing Act, which has its own rescission right.
It ends once title has been transferred to the buyer.

The B.C. cooling-off period page has the notice details and the full list of homes it covers.

For a $900,000 home, the rescission fee is $2,250.

Ontario’s new-condo rescission period

Section 73 of Ontario’s Condominium Act, 1998 gives buyers of new condos a right to cancel. It doesn’t cover resale condos or freehold homes.

You're buying a new unit from the developer (the declarant), not a resale.
You or your lawyer give written notice that the developer or its lawyer receives within 10 days.
The 10 days run from the latest of the day you get the disclosure statement, the day you get the condominium guide, and the day you get a copy of the agreement signed by both sides.
You cancel before accepting a deed to the unit in registerable form.
The developer refunds all money credited to the price, without penalty, with interest at the prescribed rate.

How to protect yourself as a buyer

Use conditions wisely

The main protection is well-drafted conditions in the APS:

Financing condition: best waived only after a firm mortgage commitment (not just a pre-approval)
Home inspection condition — allows you to walk away if significant defects are found
Status certificate condition (condos) — your lawyer reviews the condo corporation’s financial health
Appraisal condition — ensures the lender will finance based on the appraised value
Sale of buyer’s property — conditional on selling your current home (weakens the offer)

Get a pre-offer inspection

In competitive markets where firm offers are expected, some buyers arrange a pre-offer inspection with the seller’s agent, which replaces the inspection condition.

Understand your financing

A pre-approval is not a mortgage commitment. Before waiving your financing condition:

Confirm the lender has fully underwritten your file
Provide all requested documents (income verification, down payment confirmation)
Ensure the property appraisal is complete or waived by the insurer

Mutual release: the cleanest exit

If both parties agree to cancel the deal, they sign a mutual release that:

Terminates the APS
Specifies what happens to the deposit (usually returned to buyer, but negotiable)
Releases both parties from further claims

Sellers may agree to a mutual release if:

They received a better offer
The market has gone up since the original deal
They want to avoid the hassle of suing a defaulting buyer

If you need to back out

Your real estate lawyer first, since the contract’s wording decides your options
Communication through the lawyer, rather than directly with the seller or their agent
Any unfulfilled conditions: if one is still open, not waiving it ends the deal
A mutual release: the seller may prefer a clean break over litigation
A negotiated settlement (for example, part of the deposit) if no clean exit exists

Sources

The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and September 29, 2026. How we check facts.

BC Laws: Property Law Act
BC Laws: Home Buyer Rescission Period Regulation
Government of British Columbia: News release
Ontario e-Laws: Condominium Act, 1998