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Summary: Backing out of an accepted offer in Ontario depends on whether the deal is still conditional or already firm. While conditions are outstanding you can usually walk away and recover your deposit; once the deal is firm, backing out is a breach that can cost you the deposit and more.
Ontario has no general cooling-off period for resale homes, so "I changed my mind" is not a way out of a firm deal. The Real Estate Council of Ontario is the provincial regulator, and what actually matters here is the stage the deal is at and what the agreement of purchase and sale (APS) says.
What does an accepted offer commit you to?
An accepted offer is a binding contract. Whether you can still exit comes down to one thing: are there unmet conditions, or is the deal firm? Those two stages carry very different consequences.
Still conditional | Firm deal | |
Can you exit? | Yes, if a condition is not met or waived | Only by breaching the contract |
Your deposit | Generally returned | At risk of forfeiture |
Further liability | None, if done properly | Possible lawsuit for damages or specific performance |
How do you back out during the conditional period?
If the offer still has conditions, backing out is straightforward: when a condition is not satisfied, you notify the other side within the deadline and the deal ends, with the deposit typically returned. This is the clean exit, and it is covered in detail in our post on conditions in a conditional offer.
The key is to act within the condition's timeline and follow the notice requirements. Miss the window, waive the condition, or let the deal go firm, and this exit closes.
What happens if you back out of a firm deal?
Once every condition is waived, the deal is firm and you are committed to closing. Refusing to close is a breach of contract, and the consequences can go well beyond losing the deposit. A seller can generally:
Keep the deposit. The deposit is usually forfeited to the seller when a buyer walks away from a firm deal.
Re-sell and sue for the shortfall. If the seller resells for less, they can sue the original buyer for the difference plus carrying and re-listing costs.
Sue for specific performance. In some cases a court can order the buyer to complete the purchase, though this remedy is harder to obtain than it once was.
The amount at stake is often far more than the deposit, which is why walking away from a firm deal is a decision to make only with legal advice.
Can the seller back out of an accepted offer?
Sellers are bound the same way buyers are. Once a deal is firm, a seller cannot simply cancel because they received a higher offer or changed their mind. If a seller refuses to close, the buyer has remedies:
Sue for damages for the extra cost of buying a comparable home, plus related expenses.
Register a certificate of pending litigation (CPL) against the title, which effectively freezes a resale while the dispute is resolved.
Seek specific performance to force the sale, especially where the property is genuinely unique.
When can you legally get out of a deal?
Some exits are legitimate and do not amount to a breach:
An unmet condition during the conditional period (financing, inspection, or a status certificate review).
A mutual release that both sides sign, ending the deal by agreement and settling the deposit.
A right written into the agreement, such as a specific clause allowing termination in defined circumstances.
Misrepresentation or fraud by the other party, which can give grounds to rescind. This is fact-specific, so get legal advice before relying on it.
If none of these apply and the deal is firm, the safest step is to talk to your lawyer before doing anything, because the cost of walking away is rarely just the deposit.
Frequently asked questions
Is there a cooling-off period for resale homes in Ontario?
No. Resale homes have no statutory cooling-off period. Only certain purchases, like a new pre-construction condo, carry a statutory rescission period. For a resale home, your conditions are the protection.
Do you lose your deposit if you back out?
During the conditional period, generally no, if a condition genuinely was not met and you followed the notice rules. After the deal is firm, the deposit is usually forfeited, and you may owe more.
Can you back out after waiving conditions?
Not without breaching the contract. Waiving conditions makes the deal firm, so backing out after that exposes you to loss of the deposit and a possible claim for damages or specific performance.
What is specific performance?
It is a court order requiring a party to complete the transaction rather than just pay damages. Courts grant it in limited circumstances, often where the property is considered unique.
Can a seller accept a higher offer after accepting yours?
Not on a firm deal. Once your offer is accepted and firm, the seller is bound to you and cannot sell to someone else without breaching your agreement.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law, helping buyers and sellers with purchase closings, refinances, and sales. Our licensed Ontario lawyers can review your agreement before you sign or waive conditions and guide you through to closing on a fully digital platform. You can start your closing online or get in touch with any questions.
Legal references: certificate of pending litigation under the Courts of Justice Act, R.S.O. 1990, c. C.43, s. 103.
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
