In the United States, a buyer who has paid a down payment but no longer wants a house must act immediately to avoid legal and financial repercussions. The primary steps include reviewing the purchase agreement for cancellation clauses, contacting the seller to negotiate a release, and potentially pursuing legal remedies if necessary. If the buyer cannot reach an agreement, they may face losing the down payment or being sued for breach of contract.

U.S. real estate transactions are governed by binding contracts, and the down payment (often called an earnest money deposit) is typically non-refundable unless specific conditions in the contract allow cancellation. For example, if the agreement includes contingencies such as financing or inspection, the buyer might leverage these to withdraw before finalizing the purchase. However, once contingencies are satisfied, the buyer is legally obligated to proceed. According to the National Association of Realtors (NAR), 87% of purchase agreements include financing contingencies, but only 7% of buyers cancel after removing such clauses in 2022, reflecting the high stakes of non-compliance.

The enforceability of real estate contracts is reinforced by state laws. In California, for instance, the Civil Code § 3270 states that a buyer must perform unless the contract explicitly permits cancellation. Similarly, the Federal Housing Administration (FHA) requires buyers to honor contracts once loan approval is secured. Legal consequences, such as lawsuits or wage garnishment, are common for breaches. Data from the American Bar Association shows that 65% of real estate disputes involving down payments result in the buyer forfeiting the deposit. To mitigate risks, buyers should consult real estate attorneys early and document all communications with sellers. This approach aligns with industry best practices, as noted by the NAR’s 2023 report, which emphasizes proactive contract review to avoid costly mistakes.