You found a home you loved.
You submitted an offer.
The seller accepted it.
Then the next morning, you wake up thinking:
“I made a mistake. Can I cancel the deal?”
Maybe you offered more than you intended.
Maybe your mortgage lender suddenly raised concerns.
Maybe the home inspection uncovered a major problem.
Or maybe you simply found another house you like better.
Whatever the reason, one of the most common questions Ontario homebuyers ask is:
Can I back out after my offer has been accepted?
The answer depends heavily on what you signed and whether your offer contains conditions that still allow you to terminate the agreement.
For most Ontario resale homes, there is no general cooling-off period that lets a buyer simply change their mind after an offer becomes binding. New or pre-construction condominiums purchased from a developer are an important exception and generally come with a 10-day cooling-off period.
Let’s break it down in simple terms.
First: What Happens When the Seller Accepts Your Offer?
When you submit an Agreement of Purchase and Sale and the seller accepts it within the required time, you may now have a binding contract.
This is very different from:
“I told my realtor I’m interested in the house.”
or:
“I verbally offered $900,000.”
Once a legally binding Agreement of Purchase and Sale has been formed, neither side should assume they can simply cancel because they changed their mind.
That’s why buyers should understand every major term before signing the offer, not after it has been accepted.
The Biggest Question: Is Your Offer Conditional or Firm?
This is one of the most important differences for Ontario homebuyers.
Conditional Offer
A conditional offer contains one or more conditions that must be satisfied or waived according to the wording and deadlines in the agreement.
Common examples include:
- Financing condition
- Home inspection condition
- Status certificate review for a condo
- Lawyer review in certain transactions
- Sale of the buyer’s existing property
The exact wording matters.
A condition does not necessarily mean:
“I have five days to change my mind for any reason.”
It means the agreement contains a specific condition, and your rights depend on how that particular clause is written.
Firm Offer
A firm offer generally means there are no outstanding buyer conditions giving you the same kind of contractual exit.
Once the seller accepts a firm offer, simply saying:
“Sorry, I don’t want the house anymore.”
can have serious consequences.
This is why RECO warns buyers to think carefully before removing financing or inspection conditions simply to make an offer more competitive.
Example 1: You Have a Financing Condition
Suppose you buy a Markham home for:
$1,100,000
Your accepted offer contains a financing condition according to which you have several days to arrange satisfactory financing.
Your lender then reviews the deal and says:
“We can’t approve this mortgage under the required terms.”
Depending on the exact wording of your financing condition and the circumstances, you may have rights under that condition rather than being forced to proceed regardless.
But here’s the important part:
Mortgage pre-approval doesn’t automatically mean your financing is guaranteed.
RECO specifically cautions buyers that mortgage pre-qualification does not safely eliminate the need for a financing condition.
The lender may still consider the property itself, appraisal, updated financial information and other factors before final approval.
That’s why buyers should be extremely careful about submitting a firm offer simply because:
“My bank already pre-approved me.”
Example 2: The Home Inspection Finds a Major Problem
Imagine you’re buying a detached home in Richmond Hill.
Your offer contains an appropriate home-inspection condition.
During the inspection, you discover:
- Serious foundation problems
- Major water damage
- Roof issues
- Electrical concerns
- Significant repairs you weren’t expecting
What happens next depends on the wording of the condition and the agreement.
But this is exactly why inspection conditions can provide important protection.
RECO warns that removing a home-inspection condition can expose buyers to expensive defects, repairs or upgrades they didn’t know about when making the offer.
Once you make a firm offer without an inspection condition, discovering an issue later does not automatically mean:
“I don’t like this anymore, so the deal is cancelled.”
What If You Simply Change Your Mind?
This is where the situation becomes much more serious.
Imagine:
Friday night: You buy a Vaughan townhouse for $950,000.
Saturday morning: You start worrying that you paid too much.
Sunday: You find another property listed for $899,000 that you like more.
Monday morning, you call your realtor:
“Tell the seller I don’t want it anymore.”
If you have a binding firm agreement, buyer’s remorse by itself generally isn’t a contractual exit.
The fact that you:
- Found another property
- Think you overpaid
- Changed your mind
- Became nervous about the market
- Decided you’d rather keep renting
doesn’t automatically cancel the contract.
“Don’t I Get 10 Days to Change My Mind?”
This is a very common misunderstanding.
For an ordinary resale home in Ontario, buyers should not assume they have a general 10-day cooling-off period.
Ontario specifically states that resale condo purchases do not have a legislated set cooling-off period allowing the purchaser to cancel without penalty.
However, there is an important exception.
Buying a New Pre-Construction Condo Is Different
If you’re purchasing a new or pre-construction condominium directly from a developer, Ontario provides specific protections.
Generally, buyers receive a:
10-calendar-day cooling-off period
during which the purchase agreement can be cancelled.
The period begins once the purchaser has received the required documents, including the executed purchase agreement, disclosure statement and Ontario’s condominium buyers’ guide.
This is one reason buyers shouldn’t confuse:
Resale condo
with
New/pre-construction condo
The rules are different.
If you’re buying pre-construction, having your lawyer review the agreement during this period is particularly important.
What Happens to Your Deposit If You Back Out?
This is where the financial consequences can become significant.
Suppose you agreed to buy a Toronto property for:
$1,200,000
and paid:
$60,000 deposit.
You then fail to complete a firm transaction.
Don’t assume:
“Worst case, I just lose my $60,000.”
Ontario case law shows the consequences can go beyond the deposit.
The Ontario Court of Appeal has confirmed that where a purchaser breaches an Agreement of Purchase and Sale and the seller suffers a loss, the seller may be entitled to damages, with the deposit credited toward those damages.
You Could Potentially Lose More Than Your Deposit
Here’s a simplified example.
You agree to buy a home for:
$1,200,000
You fail to close.
The seller puts the property back on the market.
Because market conditions changed, the property eventually sells for:
$1,100,000
That’s a:
$100,000 difference.
Depending on the circumstances, the seller may pursue damages arising from the failed transaction.
And the potential claim may not necessarily stop at the difference in selling price.
Ontario cases involving failed closings have also considered consequential losses such as additional carrying costs.
So the mindset:
“I’ll just walk away from my deposit.”
can be dangerously misleading.
A Real Ontario Example
An Ontario Court of Appeal case illustrates how serious this can become.
In Azzarello v. Shawqi, the purchaser failed to close on a Mississauga home after being unable to obtain mortgage financing.
The sellers eventually resold the property for less money and pursued the buyer for their losses.
The Court of Appeal upheld damages related to the lower resale price and consequential losses, while determining that the purchaser’s $75,000 deposit had to be credited toward those damages.
The lesson for GTA buyers is simple:
Financing problems don’t automatically make a firm purchase disappear.
If financing is uncertain, that risk needs to be considered before submitting the offer.
What If the Bank Refuses Your Mortgage?
This deserves special attention.
Some buyers think:
“If the bank doesn’t give me the mortgage, obviously I don’t have to buy the house.”
That is not something you should assume.
If your agreement is firm and does not contain an applicable financing condition, failing to obtain the expected mortgage does not necessarily release you from your contractual obligation.
Again, this is why RECO warns buyers not to assume mortgage pre-qualification makes a financing condition unnecessary.
Before making a firm offer, consider discussing with your mortgage professional:
How much am I actually approved for?
Has my income and debt been fully reviewed?
Could an appraisal create a problem?
What happens if the lender values the property below my purchase price?
These questions become particularly important in competitive GTA transactions.
What If the Appraisal Comes in Too Low?
Imagine you offer:
$1,000,000
for a property in Markham.
But the lender’s appraisal supports only:
$950,000.
You may suddenly need more cash than you expected.
If you don’t have an applicable financing condition, you shouldn’t assume the appraisal gap automatically allows you to cancel.
This is why the offer price shouldn’t be based solely on:
“How much do I need to offer to win?”
It should also consider:
“Can I actually complete this purchase if the lender doesn’t finance as much as I expect?”
What About the Seller? Can They Just Change Their Mind?
The same basic principle works in the other direction.
Once a binding Agreement of Purchase and Sale exists, the seller generally cannot simply say:
“Someone else offered me $50,000 more, so I’m cancelling your deal.”
An accepted real estate agreement creates contractual obligations for both sides.
The consequences and available remedies can differ depending on which party breaches and the particular agreement, so serious disputes should be reviewed by a real estate lawyer.
What Should You Do If You Already Want Out of an Accepted Offer?
If you’re reading this because you’ve already signed an offer and now want to cancel, don’t rely on Google, social media or advice from friends.
And don’t simply tell the seller:
“I’m not closing.”
Instead:
1. Read the Agreement of Purchase and Sale
Check whether there are any outstanding conditions and their deadlines.
2. Contact your realtor immediately
Your agent should understand exactly what was submitted and accepted.
3. Speak with your mortgage professional
If financing is the problem, find out exactly what has happened and whether alternatives exist.
4. Speak with a real estate lawyer
If you’re considering refusing to close a binding transaction, legal advice is particularly important because the financial consequences can be substantial.
Your realtor can explain the transaction and the offer, but legal advice about terminating a binding agreement should come from a qualified lawyer.
How Can GTA Buyers Reduce the Risk Before Making an Offer?
The best time to solve this problem is:
before the offer is submitted.
Before buying a home in Toronto, Markham, Richmond Hill, Vaughan or elsewhere in the GTA, ask yourself:
Can I comfortably afford this price?
Is my financing actually strong enough?
Do I need a financing condition?
Do I need an inspection?
If it’s a condo, have I considered the status certificate?
Do I understand exactly what happens to my deposit?
Am I comfortable if the market changes immediately after I buy?
And most importantly:
Am I genuinely prepared to complete this transaction if my offer is accepted tonight?
If the answer is no, that’s something to resolve before signing.
Conditional vs. Firm Offer: Quick Comparison
| Conditional Offer | Firm Offer | |
|---|---|---|
| Seller accepted offer | Yes | Yes |
| Binding agreement | Generally yes, subject to conditions | Generally yes |
| Financing protection | Only if appropriately included | Generally no financing condition |
| Inspection protection | Only if appropriately included | Generally no inspection condition |
| Can buyer simply change their mind? | No | No |
| Can conditions potentially provide an exit? | Depends on wording/circumstances | Generally not applicable |
| Risk if buyer refuses to close | Depends on agreement | Potentially significant |
The most important takeaway is:
“Conditional” does not mean “I can change my mind whenever I want.”
Everything depends on the actual agreement.
Toronto & GTA Buyers: Don’t Let a Bidding War Make the Decision for You
This issue becomes particularly important during multiple-offer situations.
Imagine a Richmond Hill home receives six offers.
You originally planned:
Maximum budget: $1,150,000
Then emotions take over.
You increase to:
$1,200,000
Then remove financing.
Then remove inspection.
And finally win at:
$1,240,000.
You may feel great for five minutes.
Then comes the question:
Can you actually close?
RECO specifically cautions that buyers in competing-offer situations may be tempted to offer more than planned or remove protective conditions, and encourages buyers to carefully consider the financial and inspection risks.
Winning the house isn’t the goal.
Successfully buying the right house at a price and risk level you can handle is the goal.
Final Thoughts
So, can you back out of an accepted offer on a house in Ontario?
Sometimes—but not simply because you changed your mind.
If your Agreement of Purchase and Sale contains applicable conditions, those conditions may provide rights depending on their wording and the circumstances.
But if you’ve submitted a firm offer and entered into a binding agreement, refusing to close can have serious consequences.
You could potentially:
lose your deposit, face a claim for damages, and be responsible for losses associated with the failed transaction. Ontario Court of Appeal decisions demonstrate that a purchaser’s exposure can extend beyond simply walking away from the deposit.
And remember:
Most Ontario resale home purchases don’t come with a general cooling-off period.
New or pre-construction condos purchased from a developer are an important exception, with Ontario providing a 10-day cooling-off period under applicable condominium legislation.
At JDL Realty, we believe a good offer isn’t simply the offer most likely to win.
It’s an offer that balances:
price + financing + protection + market conditions + your actual ability to close.
Because the best time to ask:
“Can I get out of this offer?”
is before you sign it.
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