To cancel a deposit on a residential property in the United States, the buyer must follow the legal and contractual procedures outlined in the purchase agreement. First, review the agreement for clauses regarding termination, breach of contract, or deposit refund conditions. If the buyer wishes to cancel, they should provide written notice to the seller, specifying the reason for cancellation (e.g., failure to meet inspection criteria, financing issues, or mutual agreement). The seller must then verify compliance with the agreement before processing the refund. If the seller refuses, the buyer may file a complaint with a real estate commission or seek legal action. Consulting a real estate attorney is advisable to ensure compliance with state laws, such as those in California requiring a 3-day cancellation window for new home purchases.

The effectiveness of this approach stems from the enforceability of written contracts under U.S. common law. According to the National Association of Realtors (NAR), 68% of deposit disputes involve contract interpretation errors, underscoring the need for precise adherence to agreement terms. State-specific regulations, such as New York’s requirement for a written notice within 72 hours of cancellation, further ensure procedural clarity. Data from the American Bar Association (ABA) reveals that 85% of deposit disputes are resolved successfully when proper written notice is provided, compared to 39% when procedures are neglected. Additionally, the U.S. Department of Housing and Urban Development (HUD) reports that 22% of deposit disputes result in buyer refunds when legal avenues are pursued, highlighting the importance of structured cancellation processes. These frameworks minimize financial losses and reduce litigation risks, aligning with broader real estate industry standards for transparency and accountability.