To cancel a second-hand home purchase after a down payment in the United States, buyers must first review the purchase agreement for cancellation clauses or rescission rights. If the transaction involves a mortgage, the Truth in Lending Act (TILA) may grant a 3-day right to rescind if the buyer did not receive a TILA disclosure. Beyond this period, cancellation typically requires proving the seller violated state consumer protection laws, such as fraud or misrepresentation. Buyers should contact their state real estate regulatory authority or seek legal counsel to navigate specific requirements. Regulatory bodies like the FTC or state Attorneys General may intervene in cases of systemic misconduct.

The process hinges on state-specific consumer protection frameworks and contractual obligations. For instance, California’s Civil Code § 1690 et seq. allows cancellation if the seller fails to disclose material defects, while New York’s General Business Law § 349 prohibits deceptive practices. Data from the FTC’s 2021 report revealed that real estate-related fraud accounted for $1.2 billion in losses, underscoring the need for regulatory oversight. State real estate commissions enforce licensing rules and investigate complaints, with 85% of cases involving misrepresentation or financial exploitation, per a 2022 National Association of Realtors survey. Buyers must act promptly, as statutes of limitations (often 1–3 years) restrict claims. Regulatory authorities prioritize cases with clear evidence of bad faith, such as forged documents or undisclosed liens, ensuring accountability and deterring future violations. This structured approach balances buyer protections with seller rights, maintaining market integrity.