Contract cancellation

Can you back out of buying a house before closing in Washington?

Buyers change their minds for real reasons: an inspection surprise, a job change, a loan that falls apart. Whether you can walk away without losing your earnest money depends almost entirely on which contingency is still open and whether you give notice on time. This hub walks through the rules and the decision before you act.

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Home buyers at a kitchen table reviewing their purchase agreement in the evening

Quick answer

Yes, a buyer can back out before closing, but the cost depends on the contract. If you terminate under an open contingency — inspection, financing, appraisal, sale of your home, title or the seller disclosure (Form 17) rescission window — and give written notice before the deadline, the earnest money is normally returned. If you cancel after contingencies are waived or deadlines have passed, the seller may be entitled to keep the earnest money. On the standard NWMLS forms, when the buyer elects liquidated damages, Washington law (RCW 64.04.005) caps the earnest money a seller can keep as liquidated damages at 5% of the purchase price. Talk to your broker and, for disputes, a real estate attorney before missing any deadline.

Washington cap on earnest money kept as liquidated damages (RCW 64.04.005)

In writing

Termination notices must follow the contract's notice rules

Deadlines

Each contingency has its own date — once passed, protection ends

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Questions this hub answers

can i back out of buying a house
can a buyer back out before closing
walking away from real estate purchase contract before closing
earnest money refund
what happens if buyer backs out before closing
backing out of a house offer

What to do if you want out

01
1. Identify which contingencies are still open
List every contingency in the contract and its deadline. Only an open contingency gives you a clean exit.
02
2. Confirm the reason fits the contingency
An inspection contingency covers condition concerns; a financing contingency covers loan denial on the stated terms. Termination has to match the contract language.
03
3. Deliver written notice on the correct form before the deadline
Use the NWMLS notice or termination form your broker provides and deliver it as the contract requires. Late notice can cost the deposit.
04
4. Request the earnest money release
The escrow or brokerage holding the funds usually needs both parties to sign a release. Disputes are resolved under the contract's procedures.
05
5. Get legal advice if the seller objects
If the seller claims default, speak with a Washington real estate attorney before signing anything further.

Backing out: when earnest money is usually safe

Situation	Typical outcome	Key condition	Risk
Inspection contingency still open	Earnest money returned	Notice before inspection deadline	Missing the deadline
Loan denied, financing contingency open	Earnest money returned	Followed the loan application rules	Waived financing contingency
Form 17 rescission window	Earnest money returned	Within the statutory window after receipt	Window already closed
All contingencies waived or expired	Seller may keep earnest money	Liquidated damages elected	Up to 5% of price; possible other claims if not elected

Earnest money receipt envelope next to a contract addendum with highlighted deadlines

Checklist

Before you sign the purchase agreement

Every contingency and deadline listed on one page.
Earnest money amount you could afford to lose, decided in advance.
Liquidated damages election reviewed with your broker.
Loan application and lock dates matched to the financing contingency.
Inspection scheduled early inside the inspection window.
Attorney contact ready in case of a dispute.

Frequently asked questions

Can I back out of buying a house after the inspection?

If the inspection contingency is still open and you give notice before its deadline, generally yes. After you remove or waive it, backing out for condition reasons is usually not protected.

Do I get my earnest money back if I back out?

When you terminate under an open contingency and follow the notice rules, the deposit is normally returned. Otherwise the seller may keep it as liquidated damages, capped in Washington at 5% of the price when that remedy is elected.

Can I walk away 12 days before closing?

It depends on which contingencies remain. Close to closing, most contingencies have usually been satisfied or waived, so the earnest money is often at risk. Check your contract before acting.

Can the seller sue me for backing out?

If liquidated damages were elected, the seller is generally limited to the earnest money. If not, other remedies may apply. Ask a real estate attorney about your specific contract.